GameStop Cuts Sales Estimates, Shares Slump

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Shares of video game retailer GameStop (GME) got pinched this morning after the company cuts its sales forecasts for the full year after the company reported fairly weak quarterly financial results.

At $22.35 a share, the stock price fell 26 cents or 1.1%.

Video game sales have slumped industry-wide as shoppers cut back on personal purchases. GameStop hopes that game titles released this month will help power holiday sales. But for the fiscal year that ends January 2012, the company now expects sales at stores open at least a year to come in somewhere between flat and down 1%. Overall revenue is expected to grow 2% to 3%.

The company in August had cut its view for same-store sales growth to a range of 1% to 3% on total revenue growth of 4.5% to 6.5%.

For the period ended Oct. 29, net income fell 1.5% and sales fell short of projections. But thanks to share buybacks, earnings per share climbed to 39 cents a share from 36 cents per share, for the same period the previous year. Revenue rose by 2.5% to $1.95 billion.

The board authorized a new $500 million buyback program earlier in the week.

For the current quarter, GameStop expects to earn $1.66 a share to $1.76 a share, bracketing the $1.74 currently expected by analysts polled by Thomson Reuters. Same-store sales are expected to be flat to up 2%.



Original Article Source by Barrons.com