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01/17/17 12:00:02 PM

Movers: GameStop Corp.

GameStop Corp.(GME) : Jan. 13 -- GameStop Corp. (NYSE:GME), a family of specialty retail brands that makes the most popular technologies affordable and simple, today reported sales results for the nine-week holiday period ended December 31, 2016. Total global sales for the holiday period were $2.50 billion, a 16.4% decline compared to the 2015 holiday sales period. Total comparable store sales decreased 18.7%. Comp trends improved from November to December (-26.6% in Nov. and -13.0% in Dec.) and are expected to continue to improve in January. November's comp was significantly impacted by weak Call of Duty: Infinite Warfare and Titanfall 2 sales and aggressive console promotions on Thanksgiving Day and Black Friday.* Paul Raines, chief executive officer, stated, "During the holiday period, sales in the video game segment were impacted by industry weakness, promotional pricing pressure and lower in-store traffic, amidst a difficult holiday season for many retailers. We are disappointed with our overall results, but looking broadly, we did see continued growth in our non-physical gaming businesses and we expect this category to approach 40% of our earnings in fiscal 2016. As we look forward to 2017, we remain focused on our transformation plan, which includes growing our non-gaming businesses, right-sizing our global store portfolio by continuously evaluating non-productive stores for closure, and maintaining strong financial discipline, including reducing SG&A by $100 million by 2019." Gaming Business Update * New hardware sales decreased 30.3% as strong sales of recently released new hardware, such as the Nintendo NES Classic, were offset by a greater-than-expected decline in PlayStation 4 and Xbox One hardware sales. * Sales of new video game software decreased 22.8% due to difficult comparisons to titles launched a year ago, lower average selling prices and decreased store traffic. * Pre-owned sales outpaced new software sales, but declined 7.9% compared to holiday 2015. * GameStop's PowerUp Rewards loyalty program grew 10% over the last twelve months surpassing 51 million members worldwide. * Based on the data released by NPD, the company calculated that it lost market share in November and to a lesser degree in December. GameStop maintained its overweight share on new titles launched, but less overall sales of new games led to a mix shift to catalog and a slight decline in total market share. Non-Physical Gaming Business Update * Non-GAAP digital receipts decreased 9.2% to $295.5 million, or $42.5 million of sales on a GAAP basis, primarily as a result of the decline in new console software sales. * Driven by an assortment of Pokemon products, Collectibles sales increased 27.1% to $176.9 million, with year-to-date sales reaching our guidance of $450 to $500 million. * Technology Brands revenues, which are not included in comparable store sales, expanded by 44.0% to $192.4 million, driven by store growth and strong sales of the iPhone 6s, iPhone 7 and Samsung Galaxy S7. Capital Allocation Update During the holiday period, GameStop repurchased 755,400 shares of common stock at an average price of $22.63, or $17.1 million worth of stock. Year-to-date, the company has repurchased 2.1 million shares at an average price of $25.19, or $53.1 million worth of stock. As of the end of the holiday period, there was approximately $192.2 million remaining of the current share repurchase authorization. The company intends to repurchase $75 million of stock in fiscal 2016. Guidance Update GameStop is reiterating its previously announced fourth quarter and full-year 2016 earnings per share guidance of $2.23 to $2.38 and $3.65 to $3.80, respectively, excluding any year-end impairments and store closing charges, based on a favorable fourth quarter tax rate of between 32.5% and 34.5% compared to the initially forecasted rate of 36.0%. Comparable store sales for the fourth quarter are now expected to be in a range of -18.0% to -16.0% and -12.0 to -10.0% for the fiscal year. Source: GameStop Copyright 2014


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