GameStop’s stock drops after revealing large charge related iPhone X-related woes

GameStop Corp.’s stock

GME, -11.02%

tumbled 3.8% in premarket trade Friday, after the gaming products retailer reported a big jump in holiday sales, but said it would take impairment charges of $350 million to $400 million related to its technology brands business. The company said the charges were primarily a result of the negative impact of a longer upgrade cycle for new mobile devices and the changes made by AT&T Inc.

T, +1.15%

to the compensation structure. For the nine-week holiday period ending Dec. 30, GameStop said total rose 10.6% to $2.77 billion and comparable-store sales increased 11.8%, as U.S. same-store sales jumped 18.7%. Within gaming, new hardware sales increased 38.3%, boosted by sales of the Nintendo Switch and the launch of Microsoft Corp.’s

MSFT, +1.73%

Xbox One X, while video game accessories sales grew 33.7% and pre-owned sales declined 8.1%. Technology brands sales fell 18.6%, given the limited availability of Apple Inc.’s

AAPL, +1.03%

iPhone X and changes in AT&T’s compensation structure. The company said it expects 2017 earnings per share “near the middle” of the previously provided guidance range of $3.10 to $3.40 and same-store sales growth of between 4% and 6%. The has gained 2.4% over the past three months but has lost 19% the past 12 months. The S&P 500

SPX, +0.67%

has rallied 22% the past year.

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