Bloomberg

GameStop Corp. (GME - Get Report) shares plunged Wednesday after the video game retailer posted a wider-than-expected second quarter loss, and lowered it full-year profit guidance, as gamers put off new purchases in advance of new PS4 and Xbox releases.

GameStop posted an adjusted loss of 32 cents a share for the three months ending on August 3, the company's fiscal second quarter, 10 cents wider than the Street consensus forecast and more than triple last year's loss for the same period. Group revenues, GameStop said, fell 14% from last year to $1.286 billion, again missing analysts' estimates of a $1.34 billion tally.

Looking into 2019, GameStop said it sees full-year earnings in the region of $1.15 to $1.30 per share and expects comparable store sales to decline at a "low-teens" percentage pace after slumping 11.6% over the past quarter. 

"Make no mistake, this transition will take time and our sales expectations over the next several quarters will reflect the end of console cycle and the next generation of console launches by both Sony and Microsoft later for 2020," CEO George Sherman told investors on a conference call late Tuesday as he outlined the group's turnaround plans. " However, our strategic framework is focused not only on sales, but expanding our gross margin, reducing costs and optimizing inventory management, all of which will lead to continued growth of free cash flow of the business, both in the near term and over the long term."

"We have tremendous assets that have driven and can continue to drive meaningful shareholder value and cash return," he added. "We believe those assets are being discounted by a market that is focused solely on a short-term view and mistake supplier management such as sale diversification investment decisions."

GameStop shares were marked 19.55% lower at the start of trading Wednesday to change hands at $4.10 each, a move that would extend the stock's brutal year-to-date decline past 68%.

"At first glance, GameStop's F2Q 2019 results were much worse than consensus expectations and provide further evidence the new management team has a difficult task ahead as it attempts to turn the company around in our opinion," said Loop Capital analyst Anthony Chukumba. "We were
particularly discouraged by the continued weakness in pre-owned and value video game products sales and management's worse-than-expected F2019 diluted EPS guidance."

"With gamers becoming increasingly focused on the next generation of video game consoles expected to be released next year, we do not expect GameStop's results to improve much over the next few quarters." he added.