GameStop Corp. (NYSE: NYSE:GME)
GameStop the world’s largest video game and gaming console retailer reported their third-quarter earnings on Tuesday November 21,2017 after the market closed for trading.
The stock, which has been suffering since its previous earnings report announced numbers that pleased investors, Traders, and may have garnished new interest in the retailer after reporting strong numbers.
Aside from the strong numbers, one might not know that GameStop has a hefty dividend. Coming in at $1.52 per share, this equates to over 9% annually. Cher’s reacted briskly in the aftermarket once the earnings were announced. The shares closed up 7.59% at $18 after closing at $16.73 in the regular trading session.
One interesting note as well, and this will be very important in tomorrow’s trading, is that there is roughly 28% short interest in the outstanding shares. These are shares that have been sold before actually buying them.
It’s a common practice in the market when an investor or trader thinks the stock will go lower before it goes higher. So they sell it now and hope to buy it back later cheaper.
The Numbers
The company reported earnings $0.59 per share on net sales of 1.99 billion dollars. New software, increased 5.4%. Same-store sales also increased a decent amount at 1.9%. This was the third quarter and a row showing sales growth.
Company Comments
Dan DeMatteo, interim chief executive officer had this to say in the conference call:
“Our third quarter sales results were driven by strong software demand and continued momentum for Nintendo Switch and collectibles. As we enter the fourth quarter, we are encouraged by the initial customer response to Microsoft’s Xbox One X, and believe that the holiday season results will be driven by new console hardware and collectibles. Our Technology Brands AT&T (NYSE:T) Wireless business underperformed our expectations for the third quarter and we anticipate that the fourth quarter results will be highly dependent on the availability of Apple’s next-generation iPhone X.”-
GME Technicals
The above price chart shows the intraday action on the left and the aftermarket session on the right. Clearly shares love the earnings report and reacted swiftly when they were announced as shown on the right
The above price chart shows how shares will likely open much higher for trading on Wednesday morning. Looking at the green oval area on the right it will be clearing many days of overhead resistance and could propel the shares much higher.
Company Profile
GameStop Corp. operates as an omnichannel video game retailer. It sells new and pre-owned video game hardware; video game software; pre-owned and value video game products; video game accessories, such as controllers, gaming headsets, virtual reality products, memory cards, and other add-ons; and digital products, including downloadable content, network points cards, prepaid digital and subscription cards, and digitally downloadable software.
The company also sells mobile and consumer electronics, including wireless products and services, and accessories, as well as new and pre-owned smart phones; personal computer (PC) entertainment software in various genres, including sports, action, strategy, adventure/role playing, and simulation; and strategy guides, magazines, and interactive game figures.
In addition, it offers collectibles that include licensed merchandise related to the video game, television, and movie industries, as well as pop culture themes; and operates electronic commerce Websites under the GameStop, EB Games, Micromania, and ThinkGeek brand names.
Further, the company operates kongregate.com, a browser-based game site; Game Informer magazine, a print and digital video game publication; iOS and Android mobile applications; Simply Mac, a certified Apple (NASDAQ:AAPL) consumer electronic products reseller, as well as offers certified training, warranty, and repair services; and Spring Mobile, an authorized AT&T reseller operating AT&T branded wireless retail stores, as well as pre-paid wireless stores under the Cricket Wireless name that offers prepaid services, wireless devices, and accessories.
As of January 28, 2017, it operated approximately 7,535 stores in the United States, Australia, Canada, and Europe. GameStop Corp. primarily offers its products through stores under the GameStop, EB Games, and Micromania names. The company was formerly known as GSC Holdings Corp. GameStop Corp. was founded in 1994 and is based in Grapevine, Texas.