What happened

Shares of GameStop Corp. (NYSE:GME) fell 13.6% Friday after the video game retailer followed mixed fiscal-fourth-quarter 2016 results with disappointing forward guidance.

So what

GameStop's quarterly revenue fell 13.6% year over year, to $3.05 billion, driven by weak sales of certain AAA (high-budget, high-promotion) game titles and aggressive Thanksgiving and Black Friday console promotions by competitors. GameStop also saw consolidated comparable-store sales fall 16.3%, including a 20.8% drop in the U.S. and 4.6% declines internationally. On the bottom line, that translated to a 3.1% decline in adjusted net income, to $243.8 million, or $2.38 per diluted share. By comparison, analysts' consensus estimates called for lower adjusted earnings of $2.29 per share on higher revenue of $3.1 billion.

GameStop employee helping customers during the holidays

Image source: GameStop via Business Wire.

Now what

Note that GameStop bolstered its per-share earnings by repurchasing 1.66 million shares last quarter for $39.1 million, bringing full-year repurchases to 3.01 million shares for $75.1 million. That leaves $170.2 million remaining under GameStop's existing repurchase authorization. What's more, as you may recall, earlier this month the company boosted its regular annual cash dividend by 2.7%, to $1.52 per share.

Looking forward, however, GameStop CFO Rob Lloyd also told investors the company will no longer provide earnings or same-store sales guidance on a quarterly basis. Instead, GameStop will offer updates to its annual outlook with the hope of "[reducing] investor distraction as we continue to diversify the company and seek to maximize long-term shareholder value."

GameStop anticipates revenue for the full fiscal year of 2017 to be in the range of down 2% to up 2% from $8.61 billion in fiscal 2016, including a flat to negative 5% change in comparable-store sales. That should result in net income of $320 million to $354 million, or $3.10 per share to $3.40 per share. By comparison, Wall Street was modeling fiscal 2017 revenue of $8.68 billion, and earnings of $3.73 per share.

In the end, it's hard to blame GameStop management for wanting to shift investors' focus toward their longer-term targets, especially given volatility in today's difficult retail environment. But considering those longer-term targets fell well short of the numbers for which investors had hoped, it's no surprise to see GameStop stock trading down today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.