"During the holiday period, sales in the video game segment were impacted by industry weakness, promotional pricing pressure and lower in-store traffic, amidst a difficult holiday season for many retailers," CEO Paul Raines said in a statement.
Total sales were down 16.4% year-over-year to $2.5 billion, while same-stores sales fell 18.7% in the nine weeks ended Dec. 31.
November's same-store sales decline of 26.6% was driven by weak sales of Activision Blizzard's (ATVI - Get Report) "Call of Duty: Infinite Warfare" and Electronic Arts's (EA - Get Report) "Titanfall 2," as well as steep console promotions on Thanksgiving and Black Friday, according to a company statement this morning.
December's same-store sales improved slightly to a 13% decline, though NPD data indicate that video game sales for the month were soft compared to the year-ago period.
Activision's titles saw a 30% drop in December from the year prior, as "Call of Duty: Infinite Warfare" significantly underperformed last year's "Call of Duty: Black Ops III," according to NPD data cited by Piper Jaffray.
EA's titles were down 18% given difficult comparisons to "Star Wars: Battlefront," and Take-Two Interactive Software's (TTWO - Get Report) games saw a 7% dip, though "Civilization VI" wasn't included in NPD data.
In total, industry software sales fell 16% in December due to "Call of Duty" disappointment and tough year-over-year comparisons.
GameStop also pointed to a 30.3% decrease in new hardware sales. Strength in recently-released hardware such as Nintendo's (NTDOY) NES Classic was offset by declines in Sony's (SNE - Get Report) PlayStation 4 and Microsoft's (MSFT - Get Report) Xbox One consoles, the Grapevine, TX-based company said.
Additionally, GameStop has begun to accept pre-orders for Nintendo's new $299.99 Switch console that will launch on March 3.
Nintendo unveiled the console yesterday evening to a lack of enthusiasm, though GameStop's finances are unlikely to be affected, Loop Capital Market analyst Anthony Chukumba said in a note this morning.
"While at first glance we have several concerns about the device, we believe consensus F2017 estimates for GameStop reflect very modest Switch hardware and software sales expectations," Chukumba said.
GameStop maintained its current-quarter and full-year earnings guidance of $2.23 to $2.38 and $3.65 to $3.80, respectively.
Analysts surveyed by FactSet are modeling earnings of $2.33 for the quarter and $3.73 for the year.
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