Shares of GameStop Corp. (GME) plunged by more than 12% in premarket trading on Friday, Nov. 30, after the video game retailer cut its sales outlook for the current quarter and next year despite a strong start to the holiday shopping season.
GameStop stock fell to $12.91 in premarket trading on the New York Stock Exchange after ending the Thursday at $14.63.
In its quarterly earnings release, GameStop reported adjusted quarterly profit of $68.3 million, or 67 cents a share, vs. $55.1 million, or 54 cents, in the comparable year-earlier period.
However, the company slashed its full-year outlook, saying total sales are now expected to be down between 2% and 6%, while comparable same-store sales are expected to be flat to down 5%. It forecast adjusted earnings per share of between $2.55 and $2.75 - well below its previous guidance for adjusted earnings of between $3 and $3.35 a share.
"While our Black Friday and Cyber Monday sales were strong, we anticipate that our fourth-quarter sales will skew more towards hardware than initially planned which, along with underperformance of certain titles, weakness in pre-owned and recent sales promotions, will result in fourth-quarter earnings that are below our previous expectations," said Rob Lloyd, GameStop chief financial officer, in a statement.