Shares in Grapevine-based GameStop, which is grappling with consumers switching from in-store shopping to digital purchases, fell more than 6 percent Tuesday after the world's largest videogame retailer announced disappointing revenues for the nine-week holiday shopping season.
As a result, GameStop expects to report fourth-quarter earnings at the low end of its current guidance range, said the company's CEO, Paul Raines."GameStop experienced mixed results during the holiday selling period," Raines said in a statement. "Our successful Wii U launch, strong digital growth and continued momentum in the mobile space were countered by a decline in store traffic."But he expressed confidence that its strong market share will position the chain as it pursues new product launches this year.Sales at stores open at least a year, a key retail indicator, dropped 4.4 percent during the holiday season, which ended Dec. 29, the statement said. They fell 3.5 percent domestically and 6.4 percent internationally.New hardware sales declined 2.7 percent while video games plummeted 5.1 percent because, it said, "front-line" title releases failed to offset a decline in overall store traffic. In November, GameStop announced it was closing 200 stores, citing a "tough video game market."The statement noted that digital sales increased by 40 percent and that global e-commerce sales were up 20 percent compared to the 2011 holiday period.Significantly, management dampened its forecast for fourth quarter comparable-store sales to a decline ranging from 4 percent to 7 percent, compared with a more optimistic prediction that ranged from a gain of 1 percent to a decline of 7 percent.Barry Shlachter, 817-390-7718Twitter: @bshlachterHave more to add? News tip? Tell us
