Shares of GameStop, the Grapevine-based retailer of video games and other electronics products, fell after fourth-quarter earnings missed analysts’ estimates on slumping software sales. The company’s forecast also came up short.
The stock (ticker: GME) slipped $1.98 a share, or more than 6 percent, to $28.29 in after-hours trading, following release of the earnings results. The stock had climbed 8 percent to $30.27 this year through the close Thursday in New York.
Sales of video-game software declined 6 percent in the fiscal year that ended in January, GameStop said in a statement Thursday. Overall fourth-quarter sales rose 1.4 percent to $3.53 billion, missing estimates of $3.57 billion. Profit excluding some items rose to $2.40 a share.
Earnings in the first quarter of this year will be 58 cents to 63 cents a share, missing analysts’ projections of 70 cents. The company also forecast that same-store sales will decline in a range of 7 to 9 percent, and total sales will be down from 4 to 7 percent.
GameStop is feeling the effects of a shift in gaming toward the Internet, with suppliers such as Activision Blizzard doing more business online. Yet the company has been tackling digital head on by selling downloads from its website and in stores and diversifying into other retail chains such as Spring Mobile AT&T stores and Simply Mac.
Last year, the company more than doubled the number of these so-called Technology Brands stores to more than 1,000, and sales grew to $534 million. It hopes to reach $1 billion in sales in 2016. In addition, the company introduced a new line of collectibles which contributed more than $300 million in sales.
Staff writer Steve Kaskovich contributed to this report.