NEW YORK (Reuters) - Video game retailer GameStop Corp (GME.N) said on Thursday that its quarterly profit fell as sales of video game hardware and software products underperformed, sending its shares down more than 5 percent.
Sales of traditional video game products such as consoles have been struggling globally as gamers turn to lower-priced online games or play games on tablets and phones.
Chief Executive Paul Raines said in a statement that it has been a “challenging period for the industry.”
The company’s shares were down 5.4 percent at $19.36 in morning trading on the New York Stock Exchange amid a broad sell-off in the market on Thursday.
The steep drop in GameStop’s share price puzzled some analysts, who said they were bracing for weaker numbers from the retailer. GameStop’s earnings per share beat Wall Street’s estimates by a penny.
“This is not as bad as people were fearing,” said Sterne Agee analyst Arvind Bhatia, pointing to the company’s 12 percent boost in used games sales, which have higher margins than sales of new games.
Bhatia said he would surprised if shares stay down through the session.
For the second quarter ended July 30, the company said its net income fell to $30.6 million, or 22 cents per share, down from $39.8 million, or 26 cents per share a year earlier.
The company posted sales of $1.7 billion, which missed Wall Street expectations of $1.8 billion, according to Thomson Reuters I/B/E/S. Sales were down 3 percent from a year earlier.
For the third quarter, the company said its comparable store sales should rise by 2 percent to 4 percent. Its earnings per share should range from 38 cents per share to 41 cents per share, which is in line with Street estimates.
GameStop reiterated its full year earnings forecast in the range of $2.82 to $2.92 per share. But the company lowered its comparable same store sales for the year.
Reporting by Liana B. Baker, editing by Gerald E. McCormick