GameStop sales rise 25% as the company chases e-commerce growth, embarks on a turnaround
- GameStop sales rose 25% in the fiscal first quarter as the company focuses on e-commerce and tries to stage a turnaround.
- The video game retailer said it had tapped Amazon executive Matt Furlong as its new CEO.
- It declined to provide a forecast for the year, but said sales momentum has continued into the second quarter.
GameStop sales rose 25% in the fiscal first-quarter, as the video game retailer embarks on a turnaround strategy partially fueled by a Reddit-inspired stock rally. The company also named former Amazon executive Matt Furlong as its new CEO.
Shares fell more than 7% after-market trading on Wednesday on news of the company's earnings.
Here's how the company did for the fiscal first quarter ended May 1, compared with Refinitiv consensus estimates:
- Loss per share: 45 cents per share adjusted vs. 84 cents expected
- Revenue: $1.28 billion vs. $1.16 billion expected
In the quarter, GameStop reported that its net loss narrowed to $66.8 million, or $1.01 per share, from a loss of $165.7 million, or a loss of $2.57 per share a year earlier. Excluding items, the company had a loss of 45 cents per share. Analysts were expecting GameStop to report a loss of 84 cents per share, according to Refinitiv.
Total revenue grew to $1.28 billion from $1.02 billion a year earlier, topping Wall Street's expectations of $1.16 billion.
The company declined to provide guidance for the year, but said momentum continued in the second quarter. It said total sales in May increased about 27% compared with the same month a year ago.
The video game retailer's stock has gyrated wildly over the past several months as retail traders have shared tips on Reddit and tried to fuel short squeezes for companies including AMC Entertainment, Bed Bath & Beyond and Clover Health — collectively the group has become known as meme stocks.
GameStop's shares are up 1,506% so far this year. Its shares have swung from a 52-week low of $3.77 to a 52-week high of $483.
The trading frenzy has gotten the attention of the U.S. Securities and Exchange Commission. In a filing on Wednesday, GameStop said it had received a request from the SEC on May 26 to voluntarily provide documents and information. The company said it was reviewing that request and planned to cooperate.
GameStop has tried to catch investors' attention in other ways, as it focuses more on e-commerce and poaches talent from other companies. This spring, it tapped Chewy co-founder Ryan Cohen to lead efforts to grow the online business. He was named chairman at a shareholder meeting on Wednesday. The company also hired several former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, its chief growth officer.
Read the company's earnings press release here and its CEO announcement here.
This story is developing. Please check back for updates.
Source: Read Full Article