Stifel 'Waiting For October Acceleration' At GameStop

Stifel analysts David Schick, Raymond Stochel and David Novak shared some thoughts regarding GameStop’s NPD data. Let’s dig in.

1. Total NPD Headline Sales

September total NPD headline sales declined 9 percent year-over-year, continuing August’s 2 percent fall.

GameStop’s management had indicated “difficult compares from Destiny” with upside in October from Assassins Creed and Halo. While Stifel has decided to maintain its 4 percent comp model unchanged, Halo’s launch on October 27 will be considerably influential.

2. Console Software

The experts believe console software fared better than expected on the back of the difficult Destiny compares somewhat driven by strong Metal Gear Solid and Super Mario Maker comps.

Related Link: Gamestop Q2 Profit Tops Expectations, Shares Rise

3. Console Hardware Vs. Software

Key figures for September include console hardware down 28 percent year-over-year and console software up 1 percent year-over-year. This ambivalence may generate more questions around "is the cycle waning?" and "will VR renew the cycle or not in 2016 and 2017?"

4. The Sony Influence

Sony Corp (ADR) SNE announced a reduction in the price of the PlayStation 4 in October.

While the analysts don’t think this has the potential to really impact on the console cycle or GameStop, “a shorter-term view indicates there’s more hardware units to be sold soon.”

5. Steam Hardware

GameStop’s “expansion into Steam hardware is a small incremental for hardware & accessories in November (and potentially improving Steam card attach rates lifting digital receipt growth).”

Rating

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.