GameStop (GME) disclosed weaker-than-expected fourth-quarter earnings on Thursday even as the video game retailer capitalized on the launch of new gaming consoles by growing same-store sales almost 8%.
Shares of the world’s largest retailer of video game products slumped 5% in premarket trading on the earnings and revenue misses as well as mixed guidance from management.
GameStop said it earned $220.5 million, or $1.89 per share, compared with a profit of $261.1 million, or $2.15 a share, a year earlier.
Excluding one-time items, it earned $1.91 a share, compared with the Street’s view of $1.93.
Revenue increased 3.4% to $3.68 billion, trailing consensus calls from analysts for $3.78 billion. Same-store sales jumped 7.8% thanks in part to the launches of Microsoft’s (MSFT) Xbox One and Sony’s (SNE) PlayStation 4.
“The launch of new consoles in 2013 marked the return of innovation to the video game category and GameStop's market share increased to an all-time high,” GameStop CEO Paul Raines said in a statement.
Raines also said GameStop’s digital and mobile businesses, which did not exist three years ago, generated over $1 billion of sales.
Looking ahead, GameStop projected first-quarter EPS of 55 cents to 60 cents on a 5% to 8% increase in same-store sales. Wall Street had been looking for more modest EPS of 53 cents.
For the full year, management sees EPS of $3.40 to $3.70, which is below the Street’s view of $3.76. Revenue is seen ranging between $9.76 billion and $10.31 billion, compared with consensus calls from analysts for $9.86 billion.
Shares of Grapevine, Texas-based GameStop shed 5.37% to $36.81 ahead of Thursday’s opening bell. The losses put GameStop on track to extend its ugly 2014 tumble of 21%.