The 10-second takeaway
For the quarter ended Feb. 2 (Q4), GameStop beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased significantly.
Margins grew across the board.
GameStop reported revenue of $3.56 billion. The 19 analysts polled by S&P Capital IQ expected a top line of $3.45 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $2.16. The 20 earnings estimates compiled by S&P Capital IQ averaged $2.09 per share. Non-GAAP EPS of $2.16 for Q4 were 25% higher than the prior-year quarter's $1.73 per share. GAAP EPS of $2.15 for Q4 were 69% higher than the prior-year quarter's $1.27 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 27.4%, 100 basis points better than the prior-year quarter. Operating margin was 11.6%, 90 basis points better than the prior-year quarter. Net margin was 7.3%, 240 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.83 billion. On the bottom line, the average EPS estimate is $0.41.
Next year's average estimate for revenue is $8.62 billion. The average EPS estimate is $3.20.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 2,842 members out of 3,195 rating the stock outperform, and 353 members rating it underperform. Among 753 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 651 give GameStop a green thumbs-up, and 102 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 $27.77.
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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.