GameStop (NYSE:GME) revealed a narrowed second-quarter profit on weak hardware and software sales, though it still reiterated its fiscal view and expressed optimism over digital sales.
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The worlds largest multichannel video game retailer posted net income of $30.9 million, or 22 cents a share, compared with $40.3 million, or 26 cents a share, in the same quarter last year.
The results were just ahead of average analyst estimates polled by Thomson Reuters of 21 cents.
Revenue for the three months ended July 30 was $1.74 billion, down 3.1% from $1.8 billion a year ago, missing the Streets view of $1.81 billion. Fueling the decline was a 9.1% in sales at stores open more than a year.
While pre-owned sales increased 12% and digital sales grew sharply above the companys own expectations by 69%, results were impacted by softer demand for new hardware and software.
GameStops resilient retail model enabled us to achieve our earnings plan despite a challenging period for the industry, the companys chief executive, Paul Raines, said in a statement. Through the back half of the year, we expect industry software sales to accelerate based on an exciting title line-up.
For the current quarter, GameStop predicts earnings in the range of 38 cents to 41 cents a share. Wall Street is expecting earnings of 38 cents. For the full-year, the company reiterated its view between $2.82 and $2.92 a share, which is in line with analyst views of $2.87.