This morning GameStop announced that its holiday season
was a success, with sales up 5.4 percent to $3 billion and comparable store sales up 3.4 percent. But that wasn't as much as analysts and industry-watchers were hoping to see, and the market is punishing the retailer's stock.
In response to the news, GameStop shares fell over 4.6 percent, trading at $20.67 as of press time. "We'll have to sort out the market reaction. I'm not sure what that means ... but in general we're hearing favorable things," GameStop CEO Paul Raines
told Reuters.
Wedbush analyst Michael Pachter called the results, in line with some estimates and below others "slightly disappointing." Lazard Capital Markets' Colin Sebastian said he thought the lowered stock "reflects profit-taking following the 13 percent rise in the stock last month," and that the company's results were "solid."
However, like many analysts including Stern Agee, Sebastian was a bit concerned with the company's product mix -- GameStop's used business appears to be experiencing slower growth than they'd like to see. That segment saw 1.7 percent growth over the holidays, according to the company.
Raines said he expected a big boost from the launch of Nintendo's 3DS in the spring, and that Kinect sales should continue performing solidly. He also expects to see sales benefit from more marketing support from Sony for Move, alongside the launch of
Tiger Woods PGA Tour 12.
GameStop expects to report earnings of about $1.53 to $1.59 a share in its upcoming fourth fiscal quarter, and didn't make any forecast adjustments.
