GameStop (GME 18.00, +1.27) has climbed 7.9% in pre-market, after beating third quarter expectations. While the stock trades higher today, the advance comes after a steady decline that had the stock trading at a five-year low in mid-November.
The video game retailer reported above-consensus third quarter earnings of $0.54 per share on a 1.5% year-over-year increase in revenue to $1.99 billion, which was just ahead of expectations.
Consolidated comparable sales increased 1.9%. This increase was comprised of 0.6% growth in the U.S. and 4.6% growth in the international segment. Continued demand for the Nintendo Switch helped new hardware sales grow 8.8%. New software sales rose 5.4% thanks to a strong slate of releases. Pre-owned sales fell 2.4%.
Digital sales declined 16.8% to $37.20 million and non-GAAP digital receipts rose 1.8% to $263.70 million. Excluding last year's revenue from Kongregate, which was sold in July 2017, digital sales grew 11.9% while non-GAAP digital receipts increased 8.3%
Collectible sales jumped 26.5% to $134.80 million thanks to an expansion of licensed merchandise offerings.
Technology Brands revenue fell 10.2% to $194.20 million. The company blamed the decline on the later than expected release of the Apple iPhone X and changes in AT&T's dealer compensation structure.
Looking ahead, GameStop expects that earnings for the fiscal year will be between $3.10 and $3.40 per share, which encompasses current market expectations. Comparable sales are expected to increase in the low to mid-single digits after previous guidance called for a decline of up to 5.0%.