/// Three Reasons Why GameStop’s Sucky Second Quarter Doesn’t Matter

August 19, 2011  |  All Things Digital


GameStop reported today that its net income fell 23 percent in the second quarter and that revenue from stores that have been open for at least a year tumbled 9 percent. The shaky results led to the retailer’s shares to drop nearly 7 percent in morning trading, but by the end of the day, the stock had completely recovered to close at $21.43, up 97 cents a share. Why? GameStop’s President Tony Bartel said the quarter was expected to be weak due to poor hardware sales and a lack of major game releases, but that there’s several reasons to be excited about the the second half of the year. “As anticipated and forecasted, we knew the market was going to be softer than most anticipated, and sales were going to be down, and at the same time, we are investing 4 cents every quarter for strategic initiatives,” he said. Still, the company hit its guidance and exceeded most analyst expectations, by earning $30.9 million, or 22 cents a share, on revenue of $1.74 billion. Analysts on average were estimating  earnings of 21 cents a share on revenue of $1.81 billion, according to FactSet. Here’s three reasons for Bartel’s optimism:  Price drops: Game hardware fell 16 percent in the second quarter, according to NPD Group, led by weak sales of Nintendo’s struggling 3DS and Sony’s PlayStation 3

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Three Reasons Why GameStop’s Sucky Second Quarter Doesn’t Matter

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