GameStop (NYSE:GME) falls short of Q4 sales goals, shares plummet by 16.1%

GameStop (NYSE:GME) falls short of Q4 sales goals, shares plummet by 16.1%

Video game retailer GameStop (NYSE:) missed analysts’ expectations in the fourth quarter of 2023, with revenue down 19.4% year-over-year to $1.79 billion. dollars. It reported non-GAAP earnings of $0.22 per share, an improvement from its earnings of $0.16 per share in the same quarter last year.

Is now the time to buy GameStop? Find out by reading the original article on StockStory.

GameStop (GME) Q4 2023 Highlights:

  • Income: $1.79 billion vs. $2.05 billion estimated by analysts (12.5% ​​failure)
  • EPS (non-GAAP): $0.22 versus analyst expectations of $0.30 (25.4% miss)
  • Gross margin (GAAP): 23.4%, compared to 22.4% in the same quarter last year
  • Free movement of capital was -$18.7 million, down from $326.6 million in the same quarter last year
  • GME did not provide any forward-looking guidance
  • Market capitalization: $4.62 billion

Attracting gaming fans with demo units configured with the latest releases, GameStop (NYSE: GME) sells new and used video games, consoles and accessories, as well as pop culture products.

Electronics and Gaming Retailer After a long day, some of us just want to watch TV, play video games, listen to music, or scroll on our phones; electronics and gaming retailers sell the technology that makes this possible, and much more. Shoppers can find everything from surround sound speakers to game controllers to home appliances in their stores. Competitive pricing and helpful store associates who can discuss topics like the latest gaming and installation technology keep customers coming back. This is a category that has evolved rapidly online over the past few decades. These electronics and gaming retailers have therefore had to be agile and aggressive in their investments in e-commerce and omnichannel.

Sales GrowthGameStop is a mid-sized retailer, which sometimes presents disadvantages compared to larger competitors with better economies of scale. On the other hand, it has an advantage over smaller competitors with fewer resources and can still achieve high growth rates because it is growing on a smaller base than its larger counterparts.

As you can see below, the company’s revenue has declined over the past four years, falling 5% annually as the number of stores and sales of existing and established stores have declined.

This quarter, GameStop missed Wall Street estimates and reported a rather uninspiring 19.4% year-over-year revenue decline, generating $1.79 billion in revenue. Looking ahead, Wall Street expects revenue to decline 1.4% over the next 12 months.

Comparable Store Sales Comparable store sales growth is a key performance indicator used to measure organic growth and demand from retailers.

GameStop’s demand has declined over the past eight quarters, and on average its same-store sales declined 3.2% year over year. The company has been reducing its store count because fewer locations sometimes leads to higher same-store sales, but that hasn’t been the case here.

Key Takeaways from GameStop’s Q4 Results We struggled to find many positives in these results. GameStop’s revenues unfortunately failed to meet analysts’ expectations, due to significant underperformance from its software segment ($465 million in revenue versus an estimate of $670 million). Because the company’s software products have higher profit margins than its hardware products, it has missed Wall Street estimates on almost every profitability metric. The company also provided no guidance and said it would not hold a conference call today to discuss the results, which raises eyebrows. Overall, it was a bad quarter for GameStop. The company is down 17% and currently trading at $12.89 per share.

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