Game Stop new releases
Specialty retailer of video games, GameStop Corp. (GME - Analyst Report) has announced a 9% hike in its quarterly dividend to 36 cents per share or $1.44 annually. The dividend is payable on Mar 24, 2015 to shareholders as of record as of Mar 17, 2015.
Exactly a year-ago, the company hiked it dividend by 20% to 33 cents per share. The company has been consistently maximizing shareholder value; apart from strong dividend policy, the company has an extensive stock buyback program in place.
On Nov 11, 2014, GameStop announced a new $500 million share repurchase authorization, replacing the $176 million available on the then existing authorization. Over the holiday period, the company bought back 1.23 million shares at a cost of $47.5 million.
Dividend hike is frequent among companies with a stable cash position and healthy cash flows. On Mar 3, Best Buy Co., Inc. (BBY - Analyst Report) announced a 21% hike in its quarterly dividend to 23 cents. Earlier, Foot Locker, Inc. (FL - Snapshot Report) and DSW Inc. (DSW - Snapshot Report) also increased their quarterly dividends by 13.6% to 25 cents and 6.7% to 20 cents, respectively.
However on the financial front, GameStop continues to disappoint investors with its performance. In the trailing four quarters, the company has missed the Zacks Consensus Estimate by an average of 2.6%.
Moreover, after dismal third-quarter fiscal 2014 results, wherein the company registered negative earnings surprise of 8.1%, its holiday sales results also failed to impress. Holiday sales for the nine weeks ended Jan 3, 2015 were down 6.7% year over year, marred by a strengthening dollar. Even on a constant currency basis, sales tumbled 4%. Moreover, comps for the period declined 3.1%.
Though, management slightly skewed its fourth-quarter and fiscal 2014 comps guidance, it reiterated its fourth quarter and fiscal 2014 earnings per share projection. The company continues to expect fourth-quarter earnings in the range of $2.08 to $2.24 per share and full-year earnings in the range of $3.40 to $3.55 per share.