GameStop Surges 14% on Sales of New Games During HolidaysDanielle Burger
GameStop Corp., the largest video-game retailer, jumped in late trading after reaffirming its earnings forecast as sales of new titles in the holiday period helped counter waning demand for consoles.
The shares surged as much as 14 percent to $37.30 in trading after the close in New York.
Sales of Sony Corp.’s PlayStation 4 and Microsoft Corp.’s Xbox One suffered tough comparisons during the holidays up against the same period a year earlier, when the consoles were introduced in November 2013. One bright spot, however, was sales of new games, led by titles such as Call of Duty: Advanced Warfare and Grand Theft Auto V.
New software sales, the category that includes games, rose 5.8 percent in the period, driven by a 94.4 percent increase in PlayStation 4 and Xbox One software, the Grapevine, Texas-based company said today in a statement. Sales of new hardware declined 32 percent in the nine-week period ended Jan. 3.
The company reaffirmed its fourth-quarter earnings forecast of as much $2.24 a share. Analysts projected $2.16, the average of estimates compiled by Bloomberg.
“There was no miss on the quarter, they reiterated for the year, and they seem somewhat positive for Q1, and so that’s probably why you see the stock, which initially traded down, go up,” Mike Hickey, an analyst with Benchmark Co. in New York, said in a phone interview.
Total global holiday sales dropped 6.7 percent to $2.94 billion, GameStop said. Same-store sales declined 3.1 percent.
New hardware comprised 24 percent of total sales, down from 33 percent a year earlier, GameStop said. Consumers snapped the latest titles, helping push the percentage of new video game software to 39 percent of total sales, or $1.14 billion, up from $1.08 billion a year earlier.