Shares of GameStop (GME) plunged in early trading after the company reported preliminary quarterly results that were below its prior forecast, citing sales trends of recently released new video games and the sell-thru rate of new video game hardware. The video game retailer also cut its outlook for the full year.

PRELIMINARY Q3 RESULTS: GameStop this morning said its expects to report third quarter earnings per share of 45c-49c and revenue of approximately $2B, below analysts' consensus estimates of 56c and $2.08B. The company also said it anticipates comparable store sales to be down 6%-7% for the quarter. The company attributed the disappointing results to sales trends of recently released new video games as well as the current sell-thru rate of new video game hardware. In August, GameStop forecast EPS of 53c-58c and SSS down 2% to up 1%.

LOWERED OUTLOOK: In light of the weaker than expected results through Q3, GameStop lowered its fiscal year 2016 EPS view to $3.65-$3.80 and its same-store sales view to a decline of 6.5%-9.5%. This view compares to the company's previous FY16 outlook for EPS of $3.90-$4.05 on SSS down 4.5% to down 1.5%. Prior to the report, analysts were expecting the company to report EPS of $3.99 for the fiscal year.

EXECUTIVE COMMENTARY: GameStop Chief Executive Officer Paul Raines said the company expected October's new titles to provide a catalyst for new software sales, but said that "despite gaining market share, the titles underperformed our forecasted sales." Raines said that while the Technology Brands and Collectibles segments are growing quickly, "they will not offset the decline in gaming this quarter." Raines continued, "We remain excited about the innovation coming into the video game category over the next twelve months, including virtual reality, the Sony PlayStation 4 Pro, the Nintendo Switch and Microsoft's Scorpio. We also remain confident that our diversification strategy will provide long-term growth and shareholder value."

WHAT'S NOTABLE: In an October note to clients, Piper Jaffray analyst Michael Olson noted September NPD video game software sales fell 31% year-over-year amid a tough comparison with launches last year of Konami's Metal Gear Solid V and Nintendo's Super Mario Maker.

OTHERS TO WATCH: Publicly traded video game makers include Activision Blizzard (ATVI), Electronic Arts (EA), and Take-Two Interactive (TTWO).

PRICE ACTION: GameStop is down about 13% in morning trading to $20.50. Earlier in the session, the stock hit a 52-week low of $20.10 per share.