Shares of Grapevine-based GameStop slumped on Wednesday after the video game retailer reported preliminary third-quarter sales and profit that missed analysts’ estimates, citing underperforming titles.
Revenue will be about $2 billion in the three months ended in October, the company said in a statement. That compares with the $2.09 billion average of analysts’ estimates compiled by Bloomberg. Profit will be 45 cents to 49 cents, below the 56-cent average projection.
“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,” Chief Executive Officer Paul Raines said in the statement. The company plans to report full earnings on Nov. 22.
On Wall Street, GameStop shares (ticker: GME) fell $2.63 a share, or 11 percent, to $20.74 in late morning trading.
GameStop has been aggressively diversifying outside its core video game business as players shift to downloading games. Other parts of the business are growing, including units that sell collectible items and electronics including phones and laptops. But they won’t offset the decline in gaming this quarter, Raines said.
GameStop also revised its full-year-outlook, saying earnings per share will range from $3.65 to $3.80. Analysts had predicted $3.98.