Get All Access for $5/mo

GameStop Shares Plummet on Weak Outlook GameStop lowered its fourth-quarter and full-year earnings guidance after suffering declines in video-game sales during the holiday period.

By Geoff Weiss

Opinions expressed by Entrepreneur contributors are their own.

GameStop shares were down as much as 20 percent Tuesday morning as the company issued a weaker-than-expected forecast for the fourth quarter and full year due to declines in video game sales.

The world's largest video game retailer lowered its fourth-quarter earnings expectations of $1.85 to $1.95 a share from a previously set range of $1.97 to $2.14 a share. Analysts polled by Thomson Reuters were anticipating earnings of $2.14 a share.

The company also revised its full-year earnings to a range of $2.96 to $3.06 per share. Interestingly, the company had raised its full-year guidance in November to $3.08 to $3.25.

GameStop's holiday sales period was marred by a 22.5 percent decline in software sales as consumers shied away from games for former generation consoles, such as the Xbox 360 and PS3.

Related: Crocodile Tears? Crocs Blames Earnings Drop on the Weather

While software sales were down, the release of several blockbuster consoles over the holidays -- including the Xbox One and PlayStation 4 -- resulted in a 99.8 percent increase in hardware sales during the period.

"The higher percentage of sales in the hardware category resulted in better than expected comps, but lower gross margin dollars during the holiday selling period," said GameStop's chief financial officer, Rob Lloyd. "In addition, new software sales came in below our expectations."

GameStop's total global sales for the nine-week period ended Jan. 4 were $3.15 billion -- a 9.3 percent increase over last year. Total comparable sales also increased 10.2 percent.

The gaming giant also announced that during the holiday period, it repurchased 800,500 shares of stock at an average price of $49.39 for a total of $39.5 million.

Related: Game On: China Lifts 14-Year Ban on Video Game Consoles

Geoff Weiss

Former Staff Writer

Geoff Weiss is a former staff writer at Entrepreneur.com.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Side Hustle

This Former Starbucks Employee Started a Side Hustle That's Making More Than $70,000 a Month — and He's Not Done Yet

When Tom Saar moved to New York City, he spotted a lucrative business opportunity.

Business News

Is One Company to Blame for Soaring Rental Prices in the U.S.?

The FBI recently raided a major corporate landlord while investigating a rent price-fixing scheme. Here's what we know.

Business News

Amazon Has a Blank Book Problem: Buyers Report Receiving Fakes of Bestselling UFO Book

The book looked fine on the outside, but the inside was out-of-this-world.

Business News

Paramount Leadership Alludes to Layoffs If Merger Does Not Go Through

Paramount is awaiting approval on its merger with Skydance Media from majority shareholder Shari Redstone.

Business News

Microsoft Reportedly Lays Off Over 1,500 Employees in Cloud Sector as Partnership with OpenAI Strengthens

Alphabet also reportedly laid off employees from several teams in Google's cloud unit last week.

Marketing

6 SEO Tips to Help You Rank in the New Era of Quality Content

What is the best SEO strategy after Google's March 2024 core update? Here's what you need to know.