Video-game retailer GameStop(GME Quote - Cramer on GME - Stock Picks) reported a blockbuster holiday season and boosted its fourth-quarter earnings outlook.
GameStop said sales for the nine-week holiday period ended Jan. 5 rose 34.7% to $2.33 billion from $1.78 billion a year ago. Comparable-store sales increased 20%.
Why You Shouldn't Quit GameStop |
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As a result, the company raised its fourth-quarter earnings guidance to $1.09 to $1.10 a share. Analysts polled by Thomson Financial were expecting earnings of $1.01 a share.
For the full year, the company forecast earnings in the range of $1.75 to $1.76 a share, 13 cents higher than its guidance range issued on Nov. 20, and above analysts' expectations of $1.66 a share.
The news didn't help shareholders, however, as the stock had fallen $2.56, or 4.7% to $52.55. The selloff continues GameStop's downturn since an intraday high of $63.68 set, perhaps unsurprisingly, on Dec. 26.
The company also raised its fourth-quarter sales guidance to a range of 15.5% to 16.5% from 7% to 9% forecast earlier. Full-year comparable-store sales are now expected to be in a range of 23.5% to 24.5%.
Video game software sales grew 45%, with the installed base of the latest generation of consoles such as
Sony's(SNE Quote - Cramer on SNE - Stock Picks) PlayStation 3 and
Nintendo's Wii tripled from last year, said GameStop.
The top five video games sold during the holiday period were
Activision's(ATVI Quote - Cramer on ATVI - Stock Picks) Guitar Hero III and
Call of Duty 4: Modern Warfare,
Assassin's Creed by
Ubisoft,
Electronic Arts'(ERTS Quote - Cramer on ERTS - Stock Picks) Rock Band and Nintendo's
Super Mario Galaxy.
Priya Ganapati
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