GameStop Sales Loss
Shares plummet amidst the reports of GameStop sales loss in recent weeks. The company reported shares fell more than 13 percent Friday, March 24. This comes after the company reported sales declines in most of its segments during the fourth quarter. That Thursday, GameStop reported hardware sales had declined 29.1 percent while new software sales fell by 19.3 percent. In addition, the company also claims the fiscal fourth-quarter global sales had decreased 13.6 percent to $3.05 billion.
This year, GameStop expects they will be closing between 2 to 3 percent of its global store footprint due to slower foot-traffic. This is no doubt thanks to the increase in digital downloads, e-commerce sites and aggressive competitors like Target and Wal-Mart who now provide preorder bonuses exclusive to their retail stores. The many ways to now buy games has significantly impacted their video game category for the worse.
The shares plummet clearly comes as a tough loss for the company. Therefore moving forward, GameStop plans to no longer provide quarterly earnings nor same-store-sales guidance. As stated by Financial Officer Rob Lloyd, the company hopes that providing only annual guidance will reduce investor distraction as GameStop continues to diversify the company to maximize its long-term shareholder value.
After Friday’s reports, GameStop shares are down more than 30 percent over the previous 12 months and 18 percent year-to-date. While shares have indeed decreased, it has not reached its 2003 all time intraday low of $3.75 per share.
More on GameStop’s shares reports can be found here. Sports Gamers Online will also be following the news as more becomes available.