Video game retailer GameStop (NYSE:GME) will be announcing earnings results tomorrow afternoon. Here’s what you need to know.
Last quarter GameStop reported revenues of $1.08 billion, down 9.1% year on year, missing analyst expectations by 8.8%. It was a mixed quarter for the company, with an impressive beat of analysts’ earnings estimates. On the other hand, its revenue unfortunately missed analysts’ expectations, driven by worse-than-expected hardware and software sales.
Is GameStop buy or sell heading into the earnings? Read our full analysis here, it’s free.
This quarter analysts are expecting GameStop’s revenue to decline 7.9% year on year to $2.05 billion, a further deceleration on the 1.2% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.30 per share.
Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company missed Wall St’s revenue estimates four times over the last two years.
Looking at GameStop’s peers in the specialty retail segment, some of them have already reported Q4 earnings results, giving us a hint of what we can expect. Best Buy’s revenues decreased 0.6% year on year, beating analyst estimates by 0.6% and Ulta reported revenues up 10.2% year on year, exceeding estimates by 0.8%. Best Buy traded down 2.7% on the results, and Ulta was down 3.5%.
Read our full analysis of Best Buy’s results here and Ulta’s results here.
Investors in the specialty retail segment have had steady hands going into the earnings, with the stocks up on average 0.7% over the last month. GameStop is up 8.8% during the same time, and is heading into the earnings with analyst price target of $6, compared to share price of $14.85.
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