GameStop's holiday sales disappoint, shares drop
People play video games inside a GameStop retail store in New York March 18, 2010.
Credit: Reuters/Shannon Stapleton
By Liana B. Baker
(Reuters) - GameStop Corp's same-store sales during the holiday season rose a less-than-expected 3.4 percent, sending its shares lower on Thursday.
"This was slightly disappointing," said Wedbush Securities analyst Michael Pachter, who had been expecting at least a 5 percent increase in same-store sales for the biggest U.S. video game retailer.
Shares of GameStop fell 4.2 percent to $20.97 in morning trading on the New York Stock Exchange.
Sales for the holiday period -- the key season for retailers -- totaled about $3.02 billion, a 5.4 percent increase from a year earlier.
For the nine-week holiday period ending January 1, new video game software sales increased 3.3 percent -- thanks to hot titles like Call of Duty: Black Ops from Activision Blizzard. Sales of hardware like game consoles improved by 7.4 percent, driven by sales of the Microsoft Kinect motion gaming device.
The company reiterated its profit forecast for the fourth quarter. GameStop expects to post earnings of $1.53 to $1.59 a share, in line with analysts' average view of $1.56 a share, according to Thomson Reuters I/B/E/S.
Post-holiday sales are also "significantly outperforming expectations," the company said.
Thursday's higher sales numbers echoed comments made by GameStop executives in October about holiday sales topping 2009's.
Microsoft said on Wednesday it had sold more than 8 million of the Kinect, which outpaced Sony Corp's motion-sensor controller, the Move.
(Reporting by Liana B. Baker, editing by Dave Zimmerman)
Credit: Reuters (www.reuters.com)
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