GameStop’s CEO said in September that it’s in a “tough place.” Things haven’t changed.
The struggling gaming retailer had a dismal earnings report Tuesday, posting results below analyst’s expectations and cutting its full-year profit forecast. GameStop (GME) shares plunged around 20% in early trading Wednesday.
The company forecasts that same-store sales will decline in the “high-teens” for the remainder of the year. It also reported a third-quarter loss of $83.4 million and a loss of 49 cents per share. GameStop’s quarterly sales sunk nearly 26% to $1.4 billion.
CEO George Sherman blamed the weak quarter on customers waiting to buy new consoles ahead of highly anticipated launches of Sony (SNE) PlayStation and the Xbox from Microsoft (MSFT). He also doesn’t expect that trend to reverse itself anytime soon.
“With console makers set to introduce new and innovative gaming consoles late next year, we anticipate this trend to continue until the fourth quarter of 2020,” Sherman said in a press release.
GameStop has had a terrible year with its stock down nearly 60%. It has been stung by falling sales of physical video games, one of the company’s mainstays. The company announced in September that in an effort to save costs, it will close between 180 to 200 under-performing stores by the end of this fiscal year, which ends in February 2020. It currently has 5,600 stores in 14 countries.
Sherman previously told CNN Business that it’s trying new store formats to turn its fortunes around. GameStop is going to lean into turning its stores into a social and cultural “hub for gaming,” he said. That could mean bringing gamers into the stores to compete together in esports.