In spite of sales improvement GameStop shares drop
GameStop, Video game retailer saw shares fall more than 9% in early trading Thursday after reporting a third quarter loss and a forecast that fell short of Wall Street expectations.
For the fourth quarter, which includes the all-important holiday sales season and the arrival of two new video game console systems, GameStop announced store sales to have increased 2%-9% and earnings of $1.97 to $2.14.
Analysts were hoping for $2.15 or more. In a report forecasting GameStop's earnings, Wedbush Securities analyst Michael Pachter said, "In our view, the consensus ... remains too low given the two next-gen console launches."
In spite of exercising caution, the company anticipateS to end the year on a high note, driven by sales of new consoles and games this holiday season. It raised its full-year earnings per share forecast to a new range of $3.08 to $3.25, from $3.00 to $3.20 previously.
The company also raised its outlook for full-year comparable sales growth to 1.5 percent to 4.5 percent, from a previous forecast of down 3.5 percent to up 1.5 percent.
GameStop shares, which have gone up 6 percent in the last three months, relinquished most of those gains on Thursday and were down at $49.50 in the afternoon.
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