GameStop (GME) said Thursday its first-quarter profit slid 25% on continued declines in revenue and same-store sales, although cost cutting helped boost margins and push earnings above the company’s estimate.
The world’s largest videogame retailer also raised the low end of its full-year guidance by 15 cents, calling for earnings of $2.90 to $3.15 a share. Same-store sales are expected fall between growth of 1.5% and a decline of 5%.
For the current quarter, GameStop anticipates per-share earnings of seven cents versus Wall Street estimates of eight cents. Same-store sales will likely continue a sharp decline, with expectations for a 12.5% to 16% drop.
The Grapevine, Texas-based company has faced challenges related to the rapid growth of cheaper mobile and social games, while executives have said upcoming new game consoles, Microsoft’s (MSFT) Xbox One and Sony’s (SNE) Playstation 4, will boost gaming sales.
GameStop has also moved to add digital offerings, providing customers with digital download codes and selling tablets that use Google’s (GOOG) Android operating system.
In the latest period, GameStop’s profit was $54.6 million, or 46 cents a share, below $72.5 million, or 54 cents a share, in the year-ago period. The company in March provided an earnings outlook of 38 cents to 43 cents a share.
Sales fell 6.8% to $1.87 billion. Comparable store sales were down 6.7%.
Gross margin widened to 31% from 30%, and input costs fell 8.2%.
Shares of GameStop were trading 31 cents higher at $36.56 in early morning trading.