GameStop holiday sales sink
Decline in store traffic results in sales for nine-week period dropping 4.6 percent to $2.88 billion; preowned category dives 15.6 percent; digital receipts jump 40 percent.
GameStop did not have a happy holiday. The specialty retailer today announced sales results for the nine-week holiday period ended December 29, revealing global sales were down 4.6 percent year-over-year to $2.88 billion. Last year, GameStop took in $3.02 billion during the period.
Total comparable store sales dropped 4.4 percent, with United States shops falling 3.5 percent and international outfits taking a heavier 6.4 percent hit year-on-year. Based on these holiday sales results, GameStop downgraded its comparable store sales range for the fourth quarter to -7.0 percent to -4.0 percent and the full year to -9.0 percent to -7.5 percent.
“GameStop experienced mixed results during the holiday selling period. Our successful Wii U launch, strong digital growth and continued momentum in the mobile space were countered by a decline in store traffic,” GameStop CEO Paul Raines said in a statement. “As a result, GameStop expects its fourth quarter 2012 earnings per share results to be at the low end of its current guidance range. Our strong market share positions us well for the future, and we look forward to new product launches in 2013.”
New hardware sales for the holiday period dropped 2.7 percent, which included 320,000 Wii U units sold worldwide. New game software also took a hit, falling 5.1 percent due to major games not be able to offset a decline in overall store traffic.
GameStop's preowned category--one of its pillar businesses--dove the furthest during the period, tanking 15.6 percent. The company attributed this downturn to limited inventory due to fewer new titles released in 2012 as well as less promotional activity compared to last year.
It wasn't all bad news for GameStop during the holiday period. Digital receipts jumped more than 40 percent and mobile business sales hit $76.5 million and have exceeded $160 million year-to-date. Further, GameStop's global e-commerce sales rose 20.5 percent.
Investors reacted to the news negatively, as GameStop shares traded down sharply today. As of press time, the company's stock was going for $23.14, down nearly 7 percent.