Ailing computer gaming specialist Game today delivered the second profit warning of the month in the retail sector.
The retailer, which has come under attack from the rise of PC gaming, internet downloads and the volatility of the console cycle, isn’t new to profit warnings.
In an attempt to fight back the retailer has rapidly diversified into eSports and events. But is this too little too late?
Today it cited availability issues with the latest Nintendo console for its full-year EBITDA coming in “substantially below previous expectations”.
But Game is also still considerably over-spaced.
In some instances, it has capitalised on surplus square footage with its new Belong-branded gaming arenas. Game also has an opportunity to reduce costs across its store footprint with over 220 lease events to manage by the end of 2018.
But, given the near 30% drop in its share price since today’s update, some investors might be tempted to push the eject button on Game once and for all.
Quote of the day
“Strong consumer spending has propped up the economy since last June but now the twin pressures of higher prices and sluggish wage growth are squeezing household finances and adding to widespread fears of a Brexit-induced economic slowdown”
– GfK head of market dynamics Joe Staton commenting on the five-point decline in consumer confidence
Today in numbers
Supergroup’s full-year increase in like-for-like sales
Nisa’s full-year pre-tax profit – up £600,000 from the previous year
Look out for the fuller report on Supergroup’s full-year results on Monday morning and have a happy weekend trading.
Emily Hardy, senior reporter