GameStop Shares Slide on Dismal Holiday Season, Weak Outlook

(Bloomberg) -- GameStop Corp., the struggling video-game retailer, tumbled in late trading after reporting a same-store sales decline of 25% for the holiday shopping period and lowering its guidance for the year.

Sales for the fiscal year that ends this month could fall as much as 21%, worse than the high-teens decline that GameStop projected in December. Management also warned that the company would lose money in the fiscal year. It previously projected earnings of 10 cents to 20 cents a share.

The stock dropped as much as 11% to $4.81 in extended trading. It was down 52% in 2019, the sixth straight year of major declines.

Chief Executive Officer George Sherman, a retail-industry veteran who took the helm last year, said the changes in the forecast were based on holiday sales that came in worse than anticipated. The Grapevine, Texas-based company saw declines in both hardware and software sales as customers deferred purchases until a new generation of game consoles come out later this year.

“The accelerated decline in new hardware and software sales coming out of Black Friday and throughout the month of December was well below our expectations,” he said.

One bright spot was Nintendo Co.’s Switch platform, which continued to show growth.

GameStop plans to report its final fourth-quarter results in late March.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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