GameStop Falls After 2015 Guidance Disappoints InvestorsBy
GameStop Corp., the largest video-game specialty retailer, fell the most since November after issuing guidance that disappointed some investors.
Shares of the Grapevine, Texas-based chain declined 8 percent to $42.49 at the close in New York. The stock is up 26 percent this year.
Mike Hickey, an analyst at Benchmark Co., downgraded the stock to sell from hold, saying fiscal second-quarter sales and third-quarter guidance fell short of his forecasts. The company’s brick-and-mortar stores will be increasingly challenged by online purchasing and game streaming, he said. The company is diversifying by opening stores that sell other products, including phones, AT&T Inc. wireless service and Apple Inc. devices.
GameStop late Thursday reported that profit for the fiscal second quarter, ended Aug. 1, rose 35 percent to $33.1 million, or 31 cents a share, excluding some items. That beat the 24-cent average of analysts’ estimates compiled by Bloomberg. The company raised its full-year guidance by 3 cents a share, saying it expects to earn as much a $3.86.
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