The 10-second takeaway
For the quarter ended July 28 (Q2), GameStop missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted and GAAP earnings per share dropped significantly.
Gross margins increased, operating margins dropped, net margins contracted.
GameStop reported revenue of $1.55 billion. The 17 analysts polled by S&P Capital IQ predicted revenue of $1.59 billion on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $1.74 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 $0.16. The 19 earnings estimates compiled by S&P Capital IQ predicted $0.15 per share. GAAP EPS of $0.16 for Q2 were 27% lower than the prior-year quarter's $0.22 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 33.5%, 230 basis points better than the prior-year quarter. Operating margin was 2.2%, 90 basis points worse than the prior-year quarter. Net margin was 1.4%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.87 billion. On the bottom line, the average EPS estimate is $0.30.
Next year's average estimate for revenue is $9.21 billion. The average EPS estimate is $3.18.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,904 members out of 3,203 rating the stock outperform, and 299 members rating it underperform. Among 704 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 608 give GameStop a green thumbs-up, and 96 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 $25.46.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of GameStop. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.