GameStop Corp (NYSE:GME)
GameStop Earnings & Technicals
On Thursday after the market closed, GameStop announced its first quarter earnings that had mixed results with same-store sales whiffing on expectations which sent shares crumbling in the post market session. The company announced adjusted first quarter earnings of 66 cents per share on $1.97 billion in revenues while analysts were looking for 62 cents per share on $1.97 billion in revenues. After beating on earnings the company announced same-store sales that fell 6.2% and is expected to continue to fall into the next quarter. Currently analysts have an average price target of $36.23 but we’ll have to see how bad the downgrades are over the next few days.
Shares hit post market lows of $26.85 after closing the day at $29.98, a 10.4% decline in price. Depending where shares open the day at we could see $27.50 act as a key pivot level along with $26 while resistance will be met at $28 and $29. Shares are well below their 200-day moving average that is currently sitting at $34.81 and haven’t traded above it since November of last year. Looking back on the daily chart you will notice that shares have been under a little bit of selling pressure that past few weeks and are trading slightly down on the year. I would expect there to be some solid selling based off this earnings report and how weak the name has been before. If shares break below $25 tomorrow we could be in for a decent push down to the next level at $22.50. Keep an eye on this stock for Friday as there will be plenty of volatility to take advantage of.
CEO Comments
Paul Raines, chief executive officer, stated, “We exceeded our first quarter same store sales and EPS guidance in a challenging retail environment due to the outperformance of our non-physical gaming businesses (Technology Brands, Collectibles, Digital). Their contributions demonstrate the value of our diversification strategy as 42% of operating earnings came from non-physical gaming. We expect these trends to continue in the second quarter as digital receipts continue to grow, Technology Brands store base continues to mature and Collectibles sales continue to expand.”
GME Profile
GameStop Crop. operates as a multichannel video game, consumer electronics and wireless services retailer, which offers customers the most popular games, hardware and game accessories for next generation video game systems and the PC. The company sells new and pre-owned video game hardware, physical and digital video game software, accessories, as well as PC entertainment software, new and pre-owned mobile and consumer electronics products and other merchandise. It operates electronic commerce web sites under the names www.gamestop.com, www.ebgames.com.au, www.ebgames.co.nz, www.gamestop.ca, www.gamestop.it, www.gamestop.es, www.gamestop.ie, www.gamestop.de, www.gamestop.co.uk and www.micromania.fr. The company also sells various types of digital products, including downloadable content, network points cards, prepaid digital and online timecards and digitally downloadable software. Its mobile business consists primarily of pre-owned mobile devices, tablets and related accessories. The company was founded in June 2000 and is headquartered in Grapevine, TX.