You can be on Entrepreneur’s cover!

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

entrepreneur daily

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

Green Entrepreneur

The SEC's New Climate Transparency Rules Mean Sustainability Isn't Just a Buzzword Anymore — Here's How to Embrace It.

Discover how to openly discuss your organization's activities related to sustainability. When expertly done, accurate and transparent public relations efforts will enhance brand reputation and increase engagement.

Health & Wellness

You Won't Be a Successful Entrepreneur Until You Adopt These 3 Habits

Being an entrepreneur is a marathon, not a sprint!

Business News

Goldman Sachs CIO Says Coders Should Take Philosophy Classes — Here's Why

Run-of-the-mill engineering coursework may not be enough as AI expands in complexity. But engineers grounded in philosophy should have the reasoning abilities and first-principle thinking to keep pace.

Business News

James Clear Explains Why the 'Two Minute Rule' Is the Key to Long-Term Habit Building

The hardest step is usually the first one, he says. So make it short.

Business News

Express Files for Chapter 11 Bankruptcy Protection, Plans to Close Over 100 Stores

The company will begin shuttering stores on Tuesday, April 23.

Travel

Save on Business Travel with This Elite Subscription Discounted to $80 for Life

OneAir uses AI to scan the web in real time and deliver users the best fares before competitors.