GameStop Corp (NYSE: GME) is one of the stocks in the investor spotlight at the moment. This comes after the company announced a cut in its full-year forecast. The company announced that, it expects a full-year EPS of between $0.10 and $0.20. This is significantly lower than the earlier forecast of between $1.15 and $1.30.
On top of that, the company announced that, its store sales had dropped by 23.2% in its hardware and software sales. This is significantly lower than the 13.8% drop in sales that analysts were expecting. Essentially, the company had an EPS loss of $0.49 compared to analyst projection of an EPS profit of $0.11. It also recorded a drop in net sales to $1.44 billion. This represented a 26% drop compared to an analyst expectation of $1.62 billion.
According to the company CEO, George Sherman, the drop was not an issue that was unique to the company. It was an issue to do with the gaming industry. He stated that, the issue was a console one, and that consoles are one of the most important trigger points in the industry. He added that, the market was anticipating the release of generation 9 consoles in H2 of 2020. This, he said, was putting pressure on the current generation of gaming consoles. That’s because, with each successive generation of consoles, comes better technologies that make consumer lives much better.
The CEO also stated that, the company expected the current trend to run for the next few quarters until the new generation of consoles hits the market. He stated that, they had entered a commoditization phase of the console cycle.
From the charts, GameStop Corp traded between a high of $6.54 and a low of $6.12 in Tuesday’s session, before closing the day at $$6.51. Volumes in the day stood at 9.72 million.
About GameStop Corp
GameStop Corp is a video game and consumer electronics company that has operations in the U.S and globally. It has its headquarters in Grapevine, Texas.