GameStop Corp., the world's biggest video game retailer, said Thursday its profit rose 4 percent in the fiscal second quarter, but its shares declined as the results fell short of Wall Street estimates.
GameStop also lowered its third-quarter profit estimate because of expenses connected with its new customer rewards program and its sales of downloadable content in stores, along with acquisition and investment costs.
The company said its net income grew to $40.3 million, or 26 cents per share, in the three months ended July 31. That compares with $38.7 million, or 23 cents per share, one year ago.
The company said the best-selling games during the quarter were Red Dead Redemption, Super Mario Galaxy 2, UFC Undisputed 2010, StarCraft II: Wings of Liberty, and NCAA Football 11. Revenue rose 3 percent to $1.8 billion from $1.74 billion.
Analysts expected earnings per share of 27 cents and revenue of $1.82 billion, according to a survey by Thomson Reuters.
GameStop said revenue at stores open at least a year rose 0.9 percent because of sales of new hardware systems and new titles. Sales at stores open at least a year are considered an important measurement of retailer health because they leave out results from stores that have opened or closed in the last 12 months.
GameStop now expects to earn 35 to 38 cents per share in the third quarter, down from a prior range 38 cents to 41 cents per share. Analysts expect 41 cents per share, on average.
For the full year, the company still expects a profit of $2.58 to $2.68 per share. Analysts estimate $2.63 per share. GameStop said sales at stores open at least a year will be flat to up 2 percent for the year. It expects growth of 3 to 6 percent in the third quarter.
In morning trading, GameStop shares sank $1.41, or 6.8 percent, to $19.35.