New console buzz not enough for GameStop’s Q3 results
Last week’s PS4 launch and the highly anticipated Xbox One launch bolstered GameStop’s third-quarter results, but not as much as some investors expected, according to other reports.
The company posted total global sales for the quarter of $2.11 billion, an 18.8% increase from $1.77 billion in the prior-year quarter. Consolidated comparable store sales surged 20.5%, significantly above the forecasted range — but, according to a Reuters report, not enough to keep shares from slipping 6%.
During the quarter, sales of new software increased by 43.1%, driven by the strong performance of recently released new titles, such as Rockstar Games’ Grand Theft Auto V. New hardware sales grew 15.3%, led by strong sell-through of Nintendo 2DS and 3DS. Each of these categories outperformed the overall market, leading to 675 basis points of market share gain during the quarter. Pre-owned sales decreased 2%. The company's new businesses, mobile and digital, had sales and receipts growth of 14.4% to $49.9 million and 8.6% to $137.9 million, respectively.
GameStop’s net earnings for the quarter were $68.6 million, a 45.3% increase compared to adjusted net income of $47.2 million in the prior year quarter.
“Our strong third quarter sales results give us great momentum as we enter the new console cycle,” said CEO Paul Raines. “Consumer appetite for the new consoles is very strong judging by last week’s successful PS4 launch and the excitement for tonight’s Xbox One launch event. Globally, we are executing our unique playbook to maximize our position of strength.”