In line with industry trends, hardware sales dampened ahead of next generation releases of PS5 and Xbox next year.
GameStop (NYSE:GME), a gaming retail company announced a 25.7 percent drop in sales for the third quarter, citing the launch of the next generation consoles as the primary cause. Net loss for the company stood at US$83.4 million, over a fivefold improvement compared to the third quarter of 2018.
As quoted in the press release:
George Sherman, GameStop’s chief executive officer said, “Our third quarter results continue to reflect the prevailing industry trends, most notably the unprecedented decline in new hardware sales seen across the market as the current generation of gaming consoles reach the end of their lifecycle and consumers delay their spending in anticipation of new hardware releases. With console makers set to introduce new and innovative gaming consoles late next year, we anticipate this trend to continue until the fourth quarter of 2020. Despite the current top-line trends, we are pleased with the continued strong progress that we are making against our strategic initiatives as we transform GameStop for the future. We remain on track to achieve our $200 million annualized operating profit improvement goal, by 2021 and we believe our strategic initiatives will enable to us to achieve our long-term growth and profit objectives as we fully leverage our unique leadership position and brand in the video game space.”
Mr. Sherman continued, “Since July, we have repurchased more than one-third of our outstanding shares, underscoring our continued conviction in the long-term value proposition of GameStop, our ability to execute on our strategic initiatives and deliver positive cash flows, as well as our commitment of returning capital to shareholders.”