On Wednesday, shares of video game retailer GameStop Corp. (NYSE:GME) are plunging, down over 11% in morning trading after the company reported weak preliminary third quarter fiscal results. GameStop slashed its full-year outlook, as well as warned that Q3 results will likely miss expectations.
The company now expects Q3 revenue to come at approximately $2 billion, resulting in a comparable store sales drop of -7% to -6%. Diluted earnings per share estimated to fall in the range of 45 cents to 49 cents for the quarter.
“Our expectation was that the new titles released in October would provide a catalyst for new software sales, but despite gaining market share, the titles underperformed our forecasted sales," CEO Paul Raines said in a statement.“While the Technology Brands and Collectibles segments continue to grow rapidly, they will not offset the decline in gaming this quarter.”
Looking ahead, GameStop forecasts full year diluted earnings per share to be in the range of $3.65 to $3.80, well below previous estimates of $3.90 to $4.05 per share. Comparable store sales are expected to drop between -9.5% to -6.5% versus the previous forecast of a drop between -4.5% to -1.5%.
GameStop is set to report its third quarter results after market close on November 22. Zacks currently estimates earnings of 55 cents per share on revenue of $2.087 billion.
GME is a #3 (Hold) on the Zacks Rank, and has lost almost 16% year-to-date.
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