GameStop (GME) reported earnings on Thur 24 August 2017 (a/h)

** charts after earnings **

 

GameStop misses by $0.01, beats on revs; reaffirms FY18 EPS guidance; expects FY18 comparable store sales to be at the high end of our previously stated guidance range of -5.0% to 0.0%

• Reports Q2 (Jul) earnings of $0.15 per share, excluding non-recurring items, $0.01 worse than the Capital IQ Consensus of $0.16; revenues rose 3.6% year/year to $1.69 bln vs the $1.64 bln Capital IQ Consensus.
  • Total global sales increased 3.4% to $1.69 billion, resulting in consolidated comparable store sales growth of 1.9% (-1.4% in the U.S. and +9.8% internationally).
  • New hardware sales increased 14.8%, led by continued demand for Nintendo Switch. New software sales and pre-owned sales declined 3.4% and 7.5%, respectively, impacted by lagging Xbox One sales.
  • Worldwide omnichannel sales increased by 86.2% as the company promoted and secured leading market share of Nintendo Switch. During the launch and rollout, the company leveraged all of its sales platforms, including website, web-in-store, pickup-at-store, ship-from-store, and mobile.
  • Digital sales grew 28.1% to $46.5 million, while non-GAAP digital receipts increased 17.4% to $241.4 million. The growth was driven primarily by downloadable content and mobile.
  • Collectibles sales increased 36.1% to $122.5 million, driven by an assortment of licensed merchandise including Pokmon and Marvel products. The company added five Collectibles stores during the quarter, bringing the total global portfolio to 99 stores. The Collectibles business is on track to meet its 2017 revenue target of $650 million to $700 million.
  • Technology Brands sales increased 7.0% to $188.3 million, driven by the year-over-year growth in our AT&T authorized retail stores. Operating earnings increased 7.9% to $15.0 million.
• Co reaffirms guidance for FY18, sees EPS of $3.10-3.40 vs. $3.33 Capital IQ Consensus Estimate.
  • Expects full-year comparable store sales to be at the high end of our previously stated guidance range of -5.0% to 0.0%.
• Paul Raines, chief executive officer, stated, "Our second quarter sales results were driven by continued strong demand for Nintendo Switch and Collectibles. Looking at the second half of 2017, the Nintendo Switch, the launch of Microsoft's Xbox One X, and a solid slate of AAA titles should drive growth in the video game category. In addition, we expect that our Technology Brands AT&T Wireless business will benefit from a boost in consumer demand driven by the launch of innovative new mobile handsets, including Apple's next-generation iPhone."