April 2, 2019 / 8:24 PM / 3 months ago

GameStop forecasts surprise first-quarter loss, shares fall

FILE PHOTO: A GameStop store is photographed in Austin, TX, U.S., March 26, 2018. Picture taken on March 26, 2018. REUTERS/Mohammad Khursheed

(Reuters) - GameStop Corp on Tuesday warned of a potential first-quarter loss as the world’s largest video game retailer wrestles with slowing sales of video games and consoles at its stores.

Shares of the company fell 7.52 percent to $9.34 in extended trading after GameStop also reported quarterly revenue below analysts’ estimates.

GameStop has struggled in the face of a changing retail landscape and in March named retail industry veteran George Sherman chief executive officer, its fifth CEO in just over a year.

The company said it now expects earnings of breakeven to a loss of 5 cents per share for the quarter, adding that it would not provide annual earnings forecast at this time. Analysts on average were expecting a profit of 17 cents per share, according to IBES data from Refinitiv.

The company also forecast a 5 to 10 percent drop in total and same-store sales for 2019.

For the latest quarter, GameStop posted adjusted earnings of $1.60 per share, scraping past analysts’ estimates of $1.58 per share.

Net sales fell 7.6 percent to $3.06 billion, missing estimates of $3.28 billion.

Reporting by Sayanti Chakraborty in Bengaluru; Editing by Anil D'Silva

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