The 10-second takeaway
For the quarter ended Jan. 28 (Q4), GameStop missed estimates on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue contracted, and GAAP earnings per share shrank significantly.
Gross margins improved, operating margins grew, and net margins contracted.
GameStop reported revenue of $3.58 billion. The 17 analysts polled by S&P Capital IQ hoped for revenue of $3.69 billion on the same basis. GAAP reported sales were 3.1% lower than the prior-year quarter's $3.69 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $1.73. The 17 earnings estimates compiled by S&P Capital IQ forecast $1.73 per share on the same basis. GAAP EPS of $1.27 for Q4 were 19% lower than the prior-year quarter's $1.56 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 26.4%, 190 basis points better than the prior-year quarter. Operating margin was 10.7%, 50 basis points better than the prior-year quarter. Net margin was 4.9%, 150 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.09 billion. On the bottom line, the average EPS estimate is $0.52.
Next year's average estimate for revenue is $9.75 billion. The average EPS estimate is $3.20.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,935 members rating the stock outperform and 243 members rating it underperform. Among 783 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 717 give GameStop a green thumbs-up, and 66 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 $28.90.
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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. Motley Fool newsletter services have recommended writing covered calls on GameStop. The Motley Fool has a disclosure policy.