GameStop Lowers Guidance Despite Sales Increase

GameStop picked up a 5% increase in sales in its fiscal Q3, but that wasn't enough to stop the mega-retailer from lowering its profit expectations for this year in the face of economic turmoil.

Earnings per share in GameStop stock are now expected to range between $2.35 and $2.40 this year, which is down from the $2.45 to $2.50 range from before. Similar-store earnings growth is now projected at 10-11 percent instead of 12-14 percent. "Weakness in consumer spending" and hardware price cuts were blamed for the drops.

In short, the economic shake-up has had relatively small effects on the niche retailer so far.

"Despite the dramatic decline of the global economy and its severe impact on the entire retail industry, GameStop had a strong quarter," commented CEO Dan DeMatteo as noted by Edge.

GameStop stock dropped to $17.50--a nearly 15% decline--in trading today.