GameStop Financials: Net Sales Down, Assassin’s Creed Syndicate & Star Wars Battlefront Miss Expectations
As part of their latest financial report for the three months ending October 31, 2015, GameStop saw net sales drop 3.6% to $2.02 billion compared to the same quarter last year. Net earnings, meanwhile, were down slightly to $55.9 million.
GameStop CEO Paul Raines talked about the results, saying they were lower than expected, but the line-up of new release games, as well as other factors, will drive their sales this current quarter:
Our third quarter results were at the low end of our guidance range due to lower than expected new software and hardware sales and delays in Technology Brands store openings; however, our expectations for the full year have not changed. Looking ahead to the fourth quarter, a solid slate of new video games, coupled with contributions from our diversified AT&T, Apple and ThinkGeek businesses and our in-store collectibles offerings are expected to drive our fourth quarter results; therefore, we are reiterating our full year earnings per share guidance range of $3.66 to $3.86.
For a breakdown, new hardware sales fell 20.4%, new software sales fell 9.3% “due to the tough overlap of Destiny and Super Smash Bros” last year, pre-owned sales were up 0.6% thanks to PlayStation 4 and Xbox One sales, and digital sales were up 8.7% to $228.6 million, with Destiny: The Taken King highlighted as a driver.
In the post-earnings call (via GameSpot), Raines revealed that Halo 5: Guardians and Assassin’s Creed Syndicate underperformed during the quarter, while President Tony Bartel revealed that Star Wars Battlefront sales last week came in below expectations. Looking at Call of Duty: Black Ops 3 and Fallout 4, those two performed as expected.
Bartel then discussed the slow start for Battlefront:
We’re not going to quantify it in terms of actual numbers, but we had high expectations that diminished somewhat as it got closer and it failed to hit those lowered expectations.
On a positive note, Bartel said he expects Battlefront to rebound as The Force Awakens approaches and will become one of their top sellers this holiday season, where they do 60% of their business.