GameStop Corp. (NYSE: GME) posted mixed fourth quarter earnings results and provided a disastrous EPS outlook for 2018, sending its shares plunging in aftermarket trading.

Written by StockNews.com

The Grapevine, TX-based video game retailer reported Q4 earnings per share (EPS) of $2.38, which was $0.09 better than the Wall Street consensus estimate of $2.29.

Revenues fell 13.6% from last year to $3.05 billion, narrowly missing analysts’ $3.06 billion view.

The company warned back in January that the fourth quarter was historically weak, marred by a lackluster lineup of major video game titles, and aggressive console promotions by other retailers on Thanksgiving Day and Black Friday. Resultantly, new hardware sales plunged 29.1% and new software sales fell 19.3%. Pre-owned video game sales fell a more respectable 6.7%.

The lone bright spot in GameStop’s Q4 sales were Collectibles, which jumped 27.8% to $212.4 million in the period. Those revenues were driven by Pokémon-related toys and apparel. GME also added 17 new Collectibles stores during the quarter, and now counts 86 total such stores, including 24 ThinkGeek stores in the United States.

GameStop’s earnings guidance for 2018 was nothing short of a disaster, however, with its EPS forecast of $3.10 to $3.40 missing analysts’ view of $3.72 by a mile. 2018 revenues are seen at approximately $8.44 to $8.78 billion, in-line with Wall Street’s consensus $8.65 billion estimate.

The company commented on a big change coming to the way it provides earnings guidance:

“Going forward, GameStop will provide annual guidance, and no longer provide quarterly EPS or same store sales guidance. We believe that providing only annual guidance will reduce investor distraction as we continue to diversify the company and seek to maximize long-term shareholder value. It also benefits our organization in that it concentrates attention on longer-term targets and reduces the focus on short-term results, which can be volatile given the current business environment.”

Investors dumped GameStop shares in droves following the results, with the stock plunging $2.03 (-8.47%) to $21.93 in after-hours trading Thursday.. Year-to-date, GME had already declined -3.68%, versus a +4.70% rise in the benchmark S&P 500 index during the same period.

GME currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #11 of 35 stocks in the Specialty Retailers category.