GameStop Corp. (NYSE:GME) has increased its full-year earnings forecast, sending shares up as much as 12 percent initially on Thursday. The electronics retail chain said strong preorders for new gaming consoles are likely to push earnings higher than it previously expected.
GameStop soars on console sales
Both Microsoft Corporation (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE) (TYO:6758) are releasing new gaming consoles just in time for the holiday season. GameStop Corp. (NYSE:GME) said demand for both Microsoft’s Xbox One and Sony’s PlayStation 4 is robust, and the company is more confident about holiday sales because of the demand.
GameStop President Tony Bartel told Reuters, “Q2 was the ninth straight quarter of negative comps in the category and we’re putting a flag in the ground and saying that this is the end of the negatives comps era for quite some time as we see growth from this point forward.”
GameStop raises full-year EPS, reduces low-end decline for same-store sales
The retailer is now projecting full-year earnings to be between $3 and $3.20 per share, compared to the company’s previous expectations of between $2.90 and $3.15 per share. GameStop Corp. (NYSE:GME) also said it’s looking for full-year same-store sales to be between a 3.5 percent decline and a 1.5 percent increase. That’s compared to previous expectations of between a 5 percent decline and a 1.5 percent growth.
During the current quarter, the retail chain will see launches of some major game titles just ahead of the release of the two consoles in November. “Battlefield 4” from Electronic Arts Inc. (NASDAQ:EA) and “Grand Theft Auto V” from Take-Two Interactive Software, Inc. (NASDAQ:TTWO) are both being released in the current quarter. The company also just saw the launch of the new “Infinity” game from The Walt Disney Company, Inc. (NYSE:DIS).
GameStop reports latest results
GameStop Corp. (NYSE:GME) also reported that its net income dropped to 9 cents per share or $10.5 million during the second quarter. That’s compared to 16 cents per share or $21 million in the same quarter a year ago. However, the company still did better than expected. Analysts were looking for just 4 cents per share.
Total revenue also declined during the quarter, falling 11 percent to $1.38 billion in the quarter which ended in July. Analysts had been expecting the company to report $1.36 billion in revenue.