** charts before earnings **
** charts after earnings **
GameStop misses by $0.10, misses on revs; guides FY20 EPS below consensus, lowers comps guidance; outlines core tenets of new strategic plan
Reports Q2 (Jul) loss of $0.32 per share, excluding non-recurring items, $0.10 worse than the S&P Capital IQ Consensus of ($0.22); revenues fell 14.3% year/year to $1.29 bln vs the $1.34 bln S&P Capital IQ Consensus with consolidated comparable store sales decrease of 11.6%.
Co issues downside guidance for FY20 EPS of $1.15-1.30, excluding non-recurring items, vs. $1.57 S&P Capital IQ Consensus; Comps decline in the low teens (prior guidance was for decline of 5-10%).
As previously announced, GameStop is currently implementing a cost-savings and operating profit improvement initiative - now expects to achieve annualized operating profit improvement in excess of $200 million, an increase from its initial estimate of ~$100 million.
Also introduced the core tenets of its GameStop Reboot strategic plan for the future. The four pillars to the strategic plan include: Optimize the core business by improving efficiency and effectiveness across the organization, including cost restructuring, inventory management optimization, adding and growing high margin product categories, and rationalizing the global store base. Create the social and cultural hub of gaming across the GameStop platform by testing and improving existing core assets including the store experience, knowledgeable associates and the PowerUp Rewards loyalty program. Build digital capabilities, including the recent relaunch of GameStop.com. Transform vendor and partner relationships to unlock additional high-margin revenue streams and optimize the lifetime value of every customer.
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