The 10-second takeaway
For the quarter ended Oct. 27 (Q3), GameStop met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped to a loss.
Gross margins grew, operating margins were steady, net margins shrank.
GameStop reported revenue of $1.77 billion. The 18 analysts polled by S&P Capital IQ wanted to see a top line of $1.79 billion on the same basis. GAAP reported sales were 8.9% lower than the prior-year quarter's $1.95 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.38. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.32 per share. GAAP EPS were -$5.08 for Q3 compared to $0.39 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 31.4%, 200 basis points better than the prior-year quarter. Operating margin was 4.2%, about the same as the prior-year quarter. Net margin was -35.2%, 3,800 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $3.66 billion. On the bottom line, the average EPS estimate is $2.17.
Next year's average estimate for revenue is $9.02 billion. The average EPS estimate is $3.14.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,890 members out of 3,188 rating the stock outperform, and 298 members rating it underperform. Among 712 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 618 give GameStop a green thumbs-up, and 94 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GameStop is outperform, with an average price target of $25.62.
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