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GameStop's future is grim as its stock price crumbles
GameStop is falling, and many analysts and industry observers are skeptical it can recover. The retailer reported earnings yesterday for Q1 of its fiscal 2020 yesterday where it missed its revenue target. Now, the company's stock price has crumbled to $5, which is the lowest this has been since 2013.
For Q1, GameStop generated $1.55 billion in revenues. That was significantly short of Wall Street's expected $1.64 billion. The company did cut costs to improve its earnings per share, but that's not something it can do every quarter. And GameStop's outlook is dire in part because its core business — selling hardware and used games — is starting to dry up.
Used game revenues dropped 20% year-over-year last quarter. And hardware revenues dropped 35 percent in the same comparison. And while the company has diversified into collectibles with its ThinkGeek brand, that growth wasn't enough to offset other declines.
[...] "Pre-owned revenues declined 20% year-on-year in Q1 2019, driven by continued traffic headwinds from a tougher year-on-year software release slate," Baird analyst Colin Sebastian wrote in a note to investors. "While new hardware sales declined 35% year-on-year, as Switch growth was more than offset by declines in Xbox One and PlayStation 4 sales. Reflecting a console cycle now long in the tooth."
Services like Google Stadia won't help GameStop's situation.
See also: GameStop Slumps 40% to 16-Year Low as Gaming Passes It By
The video game sales slump is killing GameStop
GameStop Stock Is Plummeting. The Bonds Are Doing Fine.
GameStop Has Become the Poster Child for Retail Woes and Tech Disruption
Previously: GameStop's Future in Question after Failing to Secure Buyout
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet
(Score: 3, Insightful) by TheFool on Thursday June 06 2019, @07:11PM
As far as I know, publicly traded corporations can start their fiscal year pretty much whenever in the US. I've definitely worked for a company in the past that decided to change when they were doing their fiscal year in order to make the various quarters look better. It was calendar year for a while, but then they moved Q1 to the start of June. Corporate was insistent on not using real calendar time when talking about product releases and such, so it was kind of odd to start the year in the middle of the year.
Gametop might start its Q1 in March because that would mean that Q4 would have December (Christmas), January ("we just got you a new game for Christmas, you don't need a new one"), and February (nothing special, but slightly shorter) as one quarter. I'm just guessing of course, but something like that would make their quarters more even, earnings wise.