Don't count GameStop out yet, says CFO

GameStop shares will turn around aided by the new Nintendo Switch console, CFO Robert Lloyd told CNBC on Monday.

"It's been great for us. We've been able to sell through all of the allocation that we've gotten from Nintendo in very short order. We can't keep it on the shelves," said Lloyd, who is also a CNBC CFO Council contributor.

The new Nintendo Switch console went on sale on March 3 and is part of an effort to adapt to the changing preferences of gamers. Nintendo is reportedly doubling its production of the Switch console by March 2018.

Lloyd noted that while GameStop heard this rumor as well, Nintendo has not confirmed it and thus it is not reflected in their forward look.

Shares of GameStop fell about 12 percent year to date, closing down 2 percent on Monday. The broader SPDR S&P Retail ETF (XRT) is down over 5 percent year to date despite consumer confidence hitting its highest level last month since December 2000.

Lloyd pointed to the IRS delaying tax returns as a contributing factor to the slump in the retail sector and in GameStop's shares.

"I think in February, we saw a little bit of an impact of the IRS delaying the start of the tax refunds. I think that carried over into the consumer," Lloyd said in an interview with "Closing Bell."

However, according to Lloyd, the IRS has almost reached the same level of refunds that it issued this time last year, a boon to the video gaming industry because "Americans as a public like to spend some of their refunds on console video gaming."

The Texas-based company saw a decline in sales across almost all of its categories in the fourth quarter, posting revenue of $3.05 billion versus analyst expectations of $3.10 billion. The company did beat earnings estimates of $2.29 per share, reporting earnings of $2.38 per share for the quarter.

GameStop has also announced that it will be closing hundreds of stores by the end of the year as the retailer faces increased competition from Amazon and Wal-Mart.

Lloyd sees GameStop continuing to pursue its diversification strategy over the next few years to become less dependent on console game cycles. The company will continue to expand other business divisions such as its collectibles and technology brands divisions.

"We have a technology brands division that now has over 1,500 stores, including more than 1,400 branded AT&T as AT&T's largest retail partner. We'll continue to grow that business. We got 90 million in operating earnings from that business in 2016 and would expect to grow that by 30 percent or more in 2017," the CFO said.

"More than half of AT&T's retail locations are actually operated by resellers like GameStop. They're branded AT&T, so you would really need to look for the signage to know the difference," Lloyd added.

— CNBC's Melody Myers contributed to this report.

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