Video game retailer GameStop (GME 2.31%) reported results for the fourth quarter and full fiscal year of 2013 this morning, sending shares as much as 9.3% lower on the news.
GameStop's fourth-quarter sales rose 3.4% year-over-year to $3.7 billion, affected by comparing a 13-week quarter in 2013 to a 7% longer 14-week period in the year-ago quarter. Analysts were looking for sales of $3.8 billion. Comparable-store sales increased 7.8% year over year, fueled by what the company called "successful launches" of the Xbox One and Playstation 4 gaming consoles.
On the bottom line, non-GAAP earnings fell 12% to $1.90 per diluted share, just behind Wall Street's average target at $1.92 per share.
The company provided strong guidance for the upcoming quarter and the 2014 fiscal year. At the midpoint of official guidance ranges, total sales should increase by 8.5% in the first quarter and 11% for the full year. Adjusted earnings should land near $0.57 in the ongoing quarter and $3.55 for the fiscal year. With the exception of first-quarter sales, all of these numbers came in higher than the current Street view for each period.
"The launch of new consoles in 2013 marked the return of innovation to the video game category and GameStop's market share increased to an all-time high," said GameStop CEO Paul Raines in a prepared statement. Management hopes to benefit from a "re-energized" video game market and new business opportunities in consumer electronics this year.
GameStop also said it expects to close 2% of its stores in 2014 but did not give a number or say where the closing stores are located. GameStop's website says the company has 6,614 stores, so 2% would amount to about 132 locations.
-- Material from The Associated Press was used in this report.