GameStop reports $488.6 million loss despite strong software sales

GameStop reports $488.6 million loss despite strong software sales

GameStop has released its financial results for the third quarter ended ended November 3, 2018, reporting an adjusted full-year earnings forecast to compensate for “current sales and margins trends,” adding that the new figures will include the planned sale of Spring Mobile.

The company reported a net loss of $488.6 million for the quarter, or $4.78 per diluted share, compared to net income of $59.4 million, or $0.59 per diluted share in the prior-year quarter.

Total global sales increased 4.8 percent to $2.1 billion (increased 6.3 percent in constant currency), with new hardware sales increasing 12.8 percent, driven largely by Xbox One X and Sony PS4 sales. This seems to be in line with what the retail giant reported last quarter, attributed to strong sales of the Nintendo Switch.

New software sales increased 10.9 percent, thanks in part to strong sales of Red Dead Redemption II and Marvel’s Spider-Man. The company reported accessories sales increased 32.6 percent on the strength of headset and controller sales, while pre-owned sales declined 13.4 percent.

Chief operating officer and chief financial officer of GameStop Rob Lloyd explains that the company lowered its projected forecast because it now anticipates a weaker fourth quarter, despite sharing better-than-expected third-quarter results.

“While our Black Friday and Cyber Monday sales were strong, we anticipate that our fourth quarter sales will skew more towards hardware than initially planned which, along with underperformance of certain titles, weakness in pre-owned and recent sales promotions, will result in fourth quarter earnings that are below our previous expectations,” Lloyd said in a statement.