With the video game industry finally feeling the impact of the recession (hardware and software sales were down 28 percent in July, per NPD), it’s no surprise that GameStop turned in Q2 numbers that were far less impressive than this time last year. The games retailer was profitable: net income came in at $38.7 million (diluted EPS of 23-cents), but that’s down more than 32 percent vs. Q208.
Revenue came in at $1.74 billion, down 3.7 percent year-over-year; same store sales also fell by 14 percent. GameStop’s brass attributed the dip in revenue to lower console sales, consumer penny-pinching and a lack of buzzy, best-selling games — though EEDAR analyst Jesse Divinich recently suggested that there were actually more high-quality games released this year than last year (via IndustryGamers).
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GameStop also lowered guidance for the rest of the year: it expects EPS for Q3 to range between 27-cents and 33-cents, vs. 28-cents in Q308, with same-store sales falling from between six percent and 11 percent. Investors punished the stock as a result, sending its price down by almost 6 percent right after the report.
In an investor note, Wedbush Morgan Analyst Michael Pachter gave GameStop’s stock a neutral rating — alluding to the increased competition the company is facing on the used games front (from a myriad challengers, including *Best Buy*, *Amazon* and *Wal-mart*).