GameStop Corp. registered an astonishing rise in quarterly store sales in the third quarter of 2017. The company also increased its full-year forecast on account of the growing demand for Nintendo Switch console.
GameStop’s shares rose 7 percent at $17.90 in after-hour trading. However, analysts have expressed surprise on the extended forecasts.
“As we enter the fourth quarter, we are encouraged by the initial customer response to Microsoft’s Xbox One X, and believe that the holiday season results will be driven by new console hardware and collectibles,” said Dan DeMatteo, Interim Chief Executive Officer on November 21.
The company stated that it is expecting full-year comparable store sales to rise in low- to mid-single digits. However, its previous forecast was in the range of the high-end of down 5 percent to flat.
Video game makers like Electronic Arts, Take-Two Interactive Software Inc., and Activision Blizzard Inc. are planning to launch new games in 2018. This will contribute to GameStop’s earnings.
According to Thomson Reuters I/B/E/S, the video game and gaming console provider’s comparable store sales increased 1.9 percent in the Q3 2017. This is contrary to analysts’ expectations who estimated 1.15 percent fall on an average.
GameStop’s net sales increased 1.5 percent, reaching $1.99 billion. It surpassed the average forecast of $1.97 billion by analysts. Sales in the hardware business of the company increased 8.8 percent, while sales figures in its video game retail business jumped 5.4 percent.
The net income of GameStop reached $59.4 million, registering 16.9 percent raise. Its price per share increased by 59 cents in the quarter that ended on October 28.