GameStop Corp., the largest U.S. video-game specialty retailer, rose the most since January after issuing first-quarter results that beat analysts’ estimates and raising its full-year outlook.
GameStop, based in Grapevine, Texas, advanced 6.1 percent to $43.41 at the close in New York. The stock has gained 28 percent this year.
The company is benefiting from a combination of strong software titles, led by new games such as Mortal Kombat X, Battlefield Hardline and Dying Light, along with steady year-over-year sales of game consoles and other hardware, executives said on a conference call Thursday. The company is also repurchasing stock, which bolsters earnings per share.
“Several key segments continue to be strong,” Michael Olson, a Piper Jaffray Cos. analyst who recommends buying the stock, said Friday in a note to investors. GameStop’s share of the new software market, at 45 percent, was the highest in the company’s history in the first quarter, he said.
First-quarter net income rose 8.5 percent to $73.8 million, or 68 cents a share, the retailer said Thursday in a statement, beating the 58-cent average of analysts’ estimates. Sales grew 3.2 percent to $2.06 billion in the quarter ended May 2, sparked by a 9.6 percent gain in new software sales and exceeding estimates of $2.02 billion.
For the year, the company raised its profit guidance to as much as $3.83 a share, from a peak forecast of $3.80, citing a reduction in shares outstanding. GameStop continues to predict sales, excluding new stores, will increase 1 percent to 6 percent.