GameStop Corp. (GME - Free Report) is slated to release fourth-quarter fiscal 2019 results on Mar 26, after market close. Notably, the company’s bottom line lagged the Zacks Consensus Estimate by 130.2%, on average, in the trailing four quarters.
The Zacks Consensus Estimate for fiscal fourth-quarter earnings is currently pegged at 84 cents, indicating decrease of 42.1% from the year-ago quarter’s figure. We note that the Zacks Consensus Estimate has remained unchanged in the past 30 days. For quarterly revenues, the consensus estimate is pegged at $2,363 million, suggesting decline of about 23% from the year-ago quarter’s figure.
Key Factors to Note
Holiday season, which mainly forms part of the company’s fourth quarter, turned out to be a tough one for GameStop with sales coming in below expectations. Management did expect the sales environment to be challenging as customers continue to postpone their purchases on account of expected console launches in late 2020. But a sharper-than-expected fall in new hardware and software sales particularly in December has dealt a heavy blow.
Total global sales for the nine-week holiday period ended Jan 4, 2020 plunged 27.5% to $1.83 billion. Comparable store sales decreased 24.7% against an increase of 1.5% in the year-ago period.
GameStop has been grappling with sluggish sales at its stores owing to consumers inclination toward buying games and gaming consoles from e-retailers or downloading or streaming games online.
Nonetheless, the company has been undertaking strategic endeavors to be back on track. These involve optimization of inventory, focus on high margin product categories and store base rationalization worldwide. The company also plans to expand and redesign PowerUp Rewards loyalty program, enhance digital capabilities, and improve engagement with vendors and partners. Continued strength in collectibles’ category also bodes well.
What the Zacks Model Unveils
Our proven model doesn’t predict an earnings beat for GameStop this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
GameStop carries a Zacks Rank #2 but has an Earnings ESP of 0.00%.
Stocks to Consider
Here are three companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
WD-40 Company (WDFC - Free Report) currently has an Earnings ESP of +2.86% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +0.36% and a Zacks Rank #3.
CarMax, Inc. (KMX - Free Report) presently has an Earnings ESP of +0.13% and a Zacks Rank #3.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>