By Arsheeya Bajwa
(Reuters) -GameStop missed quarterly revenue estimates on Wednesday as competition grew and consumers dialed back spending in an uncertain economy, hampering the videogame retailer’s pivot to a more online-focused model.
Sticky inflation and high borrowing costs have led to uneven spending in the gaming industry. Recently, two major players, including Take-Two Interactive Software, gave an underwhelming forecast.
GameStop’s shares fell nearly 3% in extended trading after the company reported revenue of $1.08 billion for the third quarter, compared with estimates of $1.18 billion, according to five analysts polled by LSEG.
The results are the first since top investor Ryan Cohen joined GameStop as CEO and chairman in late September.
“While the softness in Q3 sales was to be expected….. the increasing market share losses to mass merchants and e-commerce giants such as Amazon will continue to be an uphill battle for GameStop,” said Third Bridge analyst John Oh.
Cohen, who had initially tried to steer GameStop aggressively towards e-commerce, has backtracked on some of the plans and relied more on brick-and-mortar stores where customers can also pick up online orders, and doubled down on costs.
The company managed to post adjusted breakeven earnings per share, compared with LSEG estimates of a loss of 9 cents.
It expenses fell nearly 24% to $296.5 million.
(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shinjini Ganguli)
