GameStop Corp (NYSE:GME) powered down after the company posted a fiscal first-quarter revenue miss late Tuesday marred by a drop off in same-store sales.
The video-game retailer saw revenue fall 13% to $1.5 billion as same-store sales plunged 10.3%. Analysts had called for revenue of $1.6 billion.
GameStop's stock plummeted more than 36% Wednesday to $4.95.
New hardware sales were a leading cause of the miss, dropping 35% as demand for XBOX and PlayStation 4 consoles declined heavily.
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Earnings per share shrank to $0.07 from $0.28 in the year-ago quarter, topping Wall Street expectations of a $0.03 loss.
Looking ahead, the Grapevine, Texas-based company expects fiscal 2019 sales to clock in between $7.5 billion and $7.9 billion, versus analyst projections of $7.6 billion.
“Since joining GameStop in April, I have been undertaking a thorough review of the business and working closely with the team to improve our operational and financial performance, address the challenges that have impacted our results, and execute both deliberately and with urgency,” CEO George Sherman said. “We believe we will transform the business and shape the strategy for the GameStop of the future.”
The board of directors also moved to eliminate the company's quarterly dividend, which is expected to preserve about $157 million per year.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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