Gamestop Corporation (GME) has reported 15.78 percent fall in profit for the quarter ended Jan. 28, 2017. The company has earned $208.70 million, or $2.04 a share in the quarter, compared with $247.80 million, or $2.36 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $243.80 million, or $2.38 a share compared with $251.60 million or $2.40 a share, a year ago. Revenue during the quarter dropped 13.61 percent to $3,045.40 million from $3,525 million in the previous year period. Gross margin for the quarter expanded 350 basis points over the previous year period to 33.10 percent. Total expenses were 90.59 percent of quarterly revenues, up from 89.17 percent for the same period last year. That has resulted in a contraction of 142 basis points in operating margin to 9.41 percent.
Operating income for the quarter was $286.60 million, compared with $381.90 million in the previous year period.
However, the adjusted operating income for the quarter stood at $343.10 million compared to $388.50 million in the prior year period. At the same time, adjusted operating margin improved 24 basis points in the quarter to 11.27 percent from 11.02 percent in the last year period.
Paul Raines, chief executive officer, stated, "GameStops transformation continued to take hold in 2016, as our non-gaming businesses drove gross margin expansion and significantly contributed to our profits. Meanwhile, the video game category was weak, particularly in the back half of 2016, as the console cycle ages. Looking at 2017, Technology Brands and Collectibles are expected to generate another year of strong growth, and new hardware innovation in the video game category looks promising. As we continue our transformation plan, we will also be focused on managing SG A spend, rationalizing our global store portfolio, and maximizing free cash flow generation to drive shareholder value."
For financial year 2017, Gamestop Corporation projects net income to be in the range of $320 million to $354 million. For financial year 2017, the company forecasts operating income to grow in the range of 6.50 percent to 7 percent. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $3.10 to $3.40.
Debt increases substantially
Gamestop Corporation has witnessed an increase in total debt over the last one year. It stood at $815 million as on Jan. 28, 2017, up 135.96 percent or $469.60 million from $345.40 million on Jan. 30, 2016. Total debt was 16.38 percent of total assets as on Jan. 28, 2017, compared with 7.97 percent on Jan. 30, 2016. Debt to equity ratio was at 0.36 as on Jan. 28, 2017, up from 0.17 as on Jan. 30, 2016. Interest coverage ratio deteriorated to 20.77 for the quarter from 69.44 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
