Charting GameStop's Latest Earnings Release

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GameStop (NYS: GME) reported earnings yesterday. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Jan. 28 (Q4), GameStop missed estimates on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted, and GAAP earnings per share shrank significantly.


Gross margins improved, operating margins grew, and net margins contracted.

Revenue details
GameStop reported revenue of $3.58 billion. The 17 analysts polled by S&P Capital IQ hoped for revenue of $3.69 billion on the same basis. GAAP reported sales were 3.1% lower than the prior-year quarter's $3.69 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Non-GAAP EPS came in at $1.73. The 17 earnings estimates compiled by S&P Capital IQ forecast $1.73 per share on the same basis. GAAP EPS of $1.27 for Q4 were 19% lower than the prior-year quarter's $1.56 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 26.4%, 190 basis points better than the prior-year quarter. Operating margin was 10.7%, 50 basis points better than the prior-year quarter. Net margin was 4.9%, 150 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.09 billion. On the bottom line, the average EPS estimate is $0.52.

Next year's average estimate for revenue is $9.75 billion. The average EPS estimate is $3.20.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,935 members rating the stock outperform and 243 members rating it underperform. Among 783 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 717 give GameStop a green thumbs-up, and 66 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on GameStop is outperform, with an average price target of $28.90.

If you're invested in retailers like GameStop, you should check out the concept that is The Motley Fool's top stock for 2012. Its founder wrote the book on big box retailing, and it's growing in increasingly important international markets. Click here for instant access to this free report.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of GameStop. Motley Fool newsletter services have recommended writing covered calls on GameStop. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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