Video game retailer GameStop (NYSE:GME) will be reporting earnings tomorrow after market close. Here’s what to look for.
GameStop missed analysts’ revenue expectations by 10.9% last quarter, reporting revenues of $798.3 million, down 31.4% year on year. It was a mixed quarter for the company, with an impressive beat of analysts’ EPS estimates.
Is GameStop a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting GameStop’s revenue to decline 17.7% year on year to $887.7 million, a further deceleration from the 9.1% decrease it recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.03 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. GameStop has missed Wall Street’s revenue estimates six times over the last two years.
Looking at GameStop’s peers in the specialty retail segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Best Buy’s revenues decreased 3.2% year on year, missing analysts’ expectations by 2%, and Ulta reported revenues up 1.7%, topping estimates by 1.3%. Best Buy traded down 5.2% following the results while Ulta was up 8.9%.
Read our full analysis of Best Buy’s results here and Ulta’s results here.
There has been positive sentiment among investors in the specialty retail segment, with share prices up 5.7% on average over the last month. GameStop is up 5.5% during the same time and is heading into earnings with an average analyst price target of $10 (compared to the current share price of $28.77).
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