GameStop, which owns EB games in Canada, saw its second-quarter profit excluding some items will be 23 cents to 30 cents a share, the Grapevine, Texas-based company said Thursday in a statement. Comparable store sales are expected to decline by 4 percent to 7 percent. Analysts were projecting earnings of 33 cents, the average of 14 estimates, and revenue of $ 1.8 billion.
The second quarter is typically the slowest for new video-game releases, according to the company. GameStop is continuing its transition into a retailer of AT&T Inc.-branded mobile phones and services, while emphasizing digital downloads and accessories sales in games.
“Investors may take a wait-and-see approach to the ongoing transition in the GameStop business and there will be some volatility in GME shares as the Street adjusts to a change in focus metrics,” Michael Olson, a Piper Jaffray Cos. analyst, wrote in a note on Friday. He has an overweight rating on the stock, the equivalent of a buy recommendation.
The company reaffirmed its full-year profit forecast of $ 3.90 to $ 4.05 a share and said comparable store sales would range from unchanged to down 3 percent, with Chief Executive Officer Paul Raines saying the company’s transformation is succeeding.
“We’re getting beat up a bit for our guidance,” Raines said in a telephone interview. “We tend to low-ball our estimates.”