Game group like-for-likes dropped 11.3% in the 19 weeks to June 11 as the retailer was hit by a worse than expected decline in the games market.
Game said it now believes group revenues for the year will be 0% to -3% down on last year, reflecting the expectation that the total market will be down around -10%, worse than the previously anticipated revenue decline of -5%.
In April Game said it expected to increase sales by between 2% and 5% in this financial year.
Peel Hunt analyst John Stevenson said that the latest revenue guidance implies a pretax profit of £22m-£29m, versus consensus of £32m.
Total group sales were down by 11.3% in the 19 week period, versus a market decline of 12.8%, according to Game.
In the UK and Ireland like-for-likes declined 9.1% with total sales falling 11.5%.
Across Game’s international businesses, like-for-likes were down 11.8% and total store sales slumped 13.3%
Online sales increased 2.4%. In multichannel, one of the key planks in Game’s turnaround strategy, the retailer has upped its share to 19%, from 13% a year ago.
Game’s performance improved towards the end of the 19 week period. In the last 7 weeks of the period the like-for-like decline slowed to -4%, “in line with expectations”. Game said the improvement reflects its success with the period’s biggest launch, LA Noire, as well as other recent software releases.
Stevenson added that the 4% drop is “much stronger than we had expected”.
Game retains its margin guidance of -100bps for the full year, and expects operating costs will be £5 – 8m lower than last year.
Last week’s E3 exhibition in Los Angeles showcased new product coming to market in the second half of this year. Game said that “although impressive, we now believe that this year’s software releases are unlikely to improve the market materially in the short term”.
However, it added that the combination of a broader line-up of new software titles for the 3DS, the arrival of the PlayStation Vita and the launch of the Nintendo Wii U “bodes well for 2012 and the subsequent years”.
Group chief executive Ian Shepherd said: “We are seeing early results from the strategic initiatives that we outlined in February, even though the video games market has been more challenging than anticipated this year.
“The pipeline of new hardware and software which has been announced for 2012 and beyond is encouraging, and our strategy is designed to strengthen our leading position and drive growth as the market transitions and evolves over the next five years.”