Nintendo Declares 10-1 Stock Split After Posting 4% Sales Decline In FY22, Weaker Guidance

Nintendo Co, Ltd NTDOY reported an FY22 net sales decline of 3.6% year-on-year to ¥1.7 trillion.
Stock Split: Nintendo declared a 10-1 stock split effective October 1, potentially propping up the shares as it struggled to revive a five-year-old Switch console and overcome a global chip shortage, Bloomberg reports.
Even when production and deliveries return to normal, the aging console will struggle to maintain its previous sales pace with the stock split acting as a boost, the report quoted an analyst.
Dedicated video game platform sales declined 3.6% Y/Y to ¥1.64 trillion. Mobile, IP-related income sales reduced 6.5% Y/Y to ¥53.3 billion. Playing cards sales rose 55.9% Y/Y to ¥2.7 billion.
Hardware: Unit sales for the entire Nintendo Switch family of systems declined by 20% Y/Y to 23.06 million units. Nintendo Switch sales decreased 33.3% Y/Y to 13.56 million units. Nintendo Switch Lite sales reduced 56.5% Y/Y to 3.7 million units.
Nintendo can only drive the hardware sales momentum via upgraded hardware, added the analyst.
Software: Software sales rose 1.8% Y/Y to 235.07 million units. Digital sales rose 4.5% Y/Y to ¥359.6 billion.
Profit: The gross profit decreased 2.5% Y/Y to ¥946 billion due to a decline in net sales. The gross margin expanded by 60 bps to 55.8%.
The operating profit declined 7.5% Y/Y to ¥592.7 billion due to the gross profit decline and higher SG&A. The operating margin contracted 140 bps to 35%.
The net profit reduced 0.6% Y/Y to ¥477.6 billion, and the net margin expanded 90 bps to 28.2%.
FY23 Outlook: Nintendo had the guidance of net sales of ¥1.6 trillion, representing a 5.6% Y/Y decline.
It sees Nintendo Switch Hardware of 21 million units, implying an 8.9% Y/Y decline. It considers a Nintendo Switch Software of 210 million units, signifying a 10.7% Y/Y decline.
The operating profit outlook was ¥500 billion, implying a 15.6% Y/Y decline and a net profit of ¥340 billion, signifying a 28.8% Y/Y decrease.
It held ¥1.02 trillion in cash and equivalents.
Dividend: Nintendo established a dividend of ¥2,030 (interim: ¥620, year-end: ¥1,410).
Price Action: NTDOY closed at $53.16 on Monday.
Photo Via Wikimedia Commons

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