Gamestop has lowered its full-year guidance (essentially a financial forecast) once again, owing to a 27.5% decrease in sales in 2019’s nine week holiday period.
In an official news release on January 13th, it was reported that Gamestop’s 2019 sales amounted to $1.83 billion, which is contrasted sharply by their $2.77 billion profit in 2018.
GameStop stated that 2019’s sales were “indicative of overall industry trends impacting the video game industry and driven by an accelerated decline in new hardware and software sales, particularly in the month of December.” The CEO of Gamestop, George Sherman, expressed the following:
“We expected a challenging sales environment for the holiday season as our customers continue to delay purchases ahead of anticipated console launches in late 2020. However, the accelerated decline in new hardware and software sales coming out of black Friday and throughout the month of December was well below our expectations, reflective of overall industry trends. On a positive note, we continued to see growth in the Nintendo Switch platform, which supports our view that our sales will strengthen as new consoles and innovative technology are introduced.
Given the deceleration in sales trends, particularly in December, we are adjusting our sales outlook for fiscal 2019 and now expect fiscal 2019 earnings to be below guidance. While we expect the challenges that we faced in the fourth quarter to continue into fiscal 2020, we believe we have the right long-term action plans in place to optimize profitability and increase new revenue streams in advance of new console introductions for holiday 2020. We look forward to delivering progress against our strategy as we move through the year.”
Despite their optimism, things have been pretty bleak for GameStop lately. In only the last few years, the company has dealt with low profits, layoffs, and even mass store closures.
We will keep you informed as any further news develops.
