The holiday sales season is off to a rocky start, according to specialty retailer GameStop. The company today released preliminary third quarter results, warning investors that October did not go as well as hoped.
"Our expectation was that the new titles released in October would provide a catalyst for new software sales, but despite gaining market share, the titles underperformed our forecasted sales," CEO Paul Raines said. "While the Technology Brands and Collectibles segments continue to grow rapidly, they will not offset the decline in gaming this quarter. We remain excited about the innovation coming into the video game category over the next twelve months, including virtual reality, the Sony PlayStation 4 Pro, the Nintendo Switch and Microsoft's Scorpio. We also remain confident that our diversification strategy will provide long-term growth and shareholder value."
GameStop did not mention any specific titles as under-performing, but the month did feature a stacked slate of new releases, including Battlefield 1, Titanfall 2, Mafia III, Civilization VI, World of Final Fantasy, and the entire PlayStation VR launch lineup.
The company now expects revenue for its third quarter (which ran from August through October) to total roughly $2 billion, with comparable store sales down 6% to 7% for the quarter and diluted earnings per share of $0.45 to $0.49. Previously, it had forecast same store sales down 1% to 2% with diluted earnings per share of $0.53 to $0.58.
GameStop also expects full-year comparable store sales to be down 6.5% to 9.5%, with full-year EPS from $3.65 to $3.80. It previously expected comparable store sales down 1.5% to 4.5% with full-year EPS of $3.90 to $4.05.