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GameStop Stock Is Up Despite 5% Decrease in Holiday Sales

GameStop saw a 5% decrease in its holiday sales compared to 2017, but the company’s stock is up. This comes as it reiterated its previously announced guidance for fiscal year 2018, adjusted from $2.55 to $2.75 earning per share. In the context of this report, the holiday season consisted of nine weeks: from November 3, 2018 to January 5, 2019.

The dip in sales could mostly be attributed to a shift in the company’s fiscal calendar and the timing of the Call of Duty launch. COD sales are major, especially at GameStop. In 2018, Call of Duty: Black Ops 4 was released in October, while in 2017, Call of Duty: WWII released in November. This shift partially accounted for the 8.3% decrease in new video game sales.

Other sales decreases were accounted for by the industry itself. For instance, new hardware sales decreased 6.1%, but that’s because the Xbox One X had a successful launch during holiday 2017. Fortunately for GameStop, Nintendo Switch sales made up for some of the disparity this year.

Preowned sales were down 16.4% (reflecting the aforementioned decreases), but video game accessories and collectible sales were up 28.7% and 3.7%, respectively.

This sales report was a reminder that GameStop isn’t necessarily a doomed business model. Its sale of Spring Mobile was officially completed just a few days ago, landing the company $700 million. And even though buyers are circling GameStop, with the sale of the company being rumored to happen as early as mid-February 2018, that doesn’t mean the chain is over as we know it. While a potential change in ownership is concerning, we have no idea what direction the business would go in if such a sale were to happen.

[Source: Nasdaq]