GameStop (GME) shares took a spill Tuesday after the company lowered its earnings forecast.
GameStop now estimates fourth-quarter earnings will come in at $1.85 to $1.95 per share. Prior to the updated forecast, GME expected income in a range of $1.97 to $2.14 per share, according to The Wall Street Journal.
GameStop cited the transitional stage between old and new consoles for the lowered Q4 earnings forecast. The video game retailer said it sold almost double the amount of new consoles during the holiday season, but that new software sales were off by 23%.
“Clearly, same store sales were driven by very strong growth in new hardware,” said Rob Lloyd, GameStop’s chief financial officer. “The higher percentage of sales in the hardware category resulted in better than expected comps, but lower gross margin dollars during the holiday selling period.”
GME shares plummeted by as much as 20% Tuesday morning. At nearly $37, GME stock is trading at its lowest point since June 2013.