(GameStop article updated with analyst commentary.)
NEW YORK (
announced on Tuesday a $300 million stock buyback, which should boost the company's earnings per share by about 10%.
The video game retailer also announced that it will use $200 million to open 400 new stores and other expenditures. It will reserve $100 million for acquisitions.
Shares of GameStop are rising 2.3% in pre-market trading to $20.79.
The news of the buyback comes on the heels of disappointing holiday sales, which that prompted the company to cut its fourth-quarter outlook.
The news comes on the heels of the announcement Monday by
that it was also slashing its full-year forecast, citing weaker-than-expected sales during the holiday season. The company now expects a loss of $1.94 to $2.24 a share, from prior guidance of a loss between $1.20 and $2.05 a share.
Electronic Arts lacked the big name content to entice nervous nelly retailers to place robust initial orders," Wall Street Strategies analyst Brian Sozzi wrote in a note. "Additionally, sell-through was soft for the products that did find their way to the shelves as consumers were tight-fisted on holiday purchases."
-- Reported by Jeanine Poggi in New York.
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