By Yasin Ebrahim
Investing.com - Video game retailer GameStop reported narrower-than-expected losses in the third quarter, but revenue fell short of estimates amid delayed game releases and lower store sales.
GameStop (NYSE:GME) fell 10% in after-market trading.
The company reported a third quarter non-GAAP loss of $0.29, compared with consensus estimates for a loss of $0.84 a share. Revenue fell 31%, to $1 billion from a year earlier, below estimates of $1.09 billion.
Comparable store sales declined 24.6%, which was deeper than the consensus estimate for a 20.5% drop.
The weakness on the top line was blamed on an "unplanned shift of software titles later into the fourth fiscal quarter, and in some cases, into fiscal 2021, and an "11% reduction in the store base, as part of the company’s de-densification strategy."
E-commerce sales, however, helped to partly plug the gap, rising 257%.
"Our third quarter results were in-line with our muted expectations and reflected operating during the last few months of a seven-year console cycle and a global pandemic, which pressured sales and earnings," the company said.
Looking ahead, however, the company touted optimism over sales in the fourth quarter following the launch of new gaming consoles.
"We anticipate, for the first time in many quarters, that the fourth quarter will include positive year-on-year sales growth and profitability, reflecting the introduction of new gaming consoles, our elevated omni-channel capabilities and continued benefits from our cost and efficiency initiatives, even with the potential further negative impacts on our operations due to the global COVID-19 pandemic."