Two memorable quotes from GameStop's (NYSE: GME ) third-quarter earnings conference call:
...our sellthrough since launch was 80% higher than the total amount of PS3's that we sold in our 2006 fiscal year. Let me repeat that. Our sell-through since launch was 80% higher than the total amount of PS3's that we sold in our 2006 fiscal year.
...the value of our reservations and additional allocation is 15% higher than the amount of Xbox 360s that we sold during our entire 2005 fiscal year. So we are poised for a powerful launch.
-- Tony Bartel, President of GameStop
Obviously, it appears GameStop is having a pretty phenomenal launch for the new consoles; but keep in mind that any new console sales are not included in the third-quarter results, and will impact the fourth quarter. For the third quarter, revenues at GameStop increased 43% driven by the hit success of Grand Theft Auto V. So with all of this great news, why are shares trading down nearly 7% post earnings?
It's all about guidance folks
When it comes to Wall Street it's all about the future, and that's where GameStop left investors wanting more. The company guided for 2% to 9% same-store sales growth, which is a very conservative estimate considering this year will be compared to last year's dismal results. This conservative guidance stems from the company not knowing how many consoles it will be allocated for the remainder of the year. What this means is if GameStop gets enough of the new consoles from Microsoft and Sony, they could handily beat expectations in the forth quarter.
Want to know more about about GameStop?
In the video below, Motley Fool analyst Blake Bos digs into GameStop's earnings, and tells investors just what was driving results for the quarter. He also tells investors what they should watch for going forward, and what his investing thesis is for GameStop today.
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