GameStop Q4 Earnings Preview: Analysts See Revenue Decline In Company's Most Important Quarter

Zinger Key Points
  • GameStop will report fourth quarter financial results after market close Tuesday.
  • A look at expectations from analysts and why the quarter is important.

Leading video game retailer GameStop Corp. GME will report fourth-quarter financial results after market closes Tuesday, March 21. Here’s a look at expectations and what they could mean for the stock.

What Happened: Shares of GameStop jumped after reporting third-quarter financial results in December. The company reported third-quarter revenue that was down year-over-year and fell shy of analysts’ estimates. 

GameStop missed Street estimates for earnings per share in three of the last four quarters, with the only beat coming in the second quarter, which was reported in September 2022.

On the revenue front, GameStop missed estimates from analysts in the last two quarters, but beat estimates in the first quarter and last year’s fourth quarter.

In fact, before the second and third quarters of the current fiscal year, GameStop had beaten revenue estimates in five straight quarters, according to data from Benzinga Pro. 

Related Link: GameStop Short Squeeze Anniversary: A Look Back At David Vs. Goliath Battle And What's Next

What’s Next: The fourth quarter is incredibly important for GameStop as it is the company’s highest revenue-producing quarter.

Analysts see the company posting revenue of $2.18 billion in the fourth quarter, a year-over-year decline of 3.3%. The estimate for earnings per share is a loss of 13 cents compared to a loss of 47 cents posted a year ago.

In the third quarter, the company said strong sales momentum was coming from new and expanded brand relationships. The company also said that sales for collectibles “remained strong on a year-to-date basis.”

With no new console releases in the 2022 holiday season and high inflation waging on, investors will want to see how big of an impact the macroeconomics had on GameStop and if it was able to weather the storm with newly released games and collectibles.

GME Price Action: GameStop shares are up 0.78% to $16.71 on Monday versus a 52-week trading range of $15.41 to $49.85.

Read Next: Here's When The GameStop Movie Starring Seth Rogen, Paul Dano And Pete Davidson Hits Theaters 

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