SELINSGROVE, PENNSYLVANIA, UNITED STATES – 01/27/2021: A woman walks past the GameStop store in the Susquehanna Valley Mall. An online group rocketed GameStop (GME) and AMC Entertainment Holdings Inc. (AMC) shares to suppress short sellers.
Photo by Paul Weaver / SOPA Images / LightRocket via Getty Images
GameStop’s revenue rose 25% in the first quarter of its fiscal year as the video game retailer embarks on a turnaround strategy, partly driven by a Reddit-inspired stock rally. The company also named former Amazon executive Matt Furlong as its new CEO.
Shares fell more than 7% on Wednesday after news of the company’s earnings.
Compared to the consensus estimates by Refinitiv, the company performed as follows in the first fiscal quarter ended May 1:
- Loss per share: 45 cents per share adjusted vs. 84 cents expected
- Revenue: $ 1.28 billion versus an expected $ 1.16 billion
In the quarter, GameStop reported that its net loss decreased from $ 165.7 million, or $ 2.57 per share last year, to $ 66.8 million, or $ 1.01 per share. Without items, the company had a loss of 45 cents per share. According to Refinitiv, analysts expected a loss of 84 cents per share of GameStop.
Total revenue rose to $ 1.28 billion from $ 1.02 billion last year, beating Wall Street’s expectations of $ 1.16 billion.
The company declined to provide guidance for the year, but said the momentum continued into the second quarter. Total sales in May increased by around 27% compared to the same month of the previous year.
The video game retailer’s stock has fluctuated sharply in the past few months as retailers shared tips on Reddit and tried to encourage short squeeze for companies like AMC Entertainment, Bed Bath & Beyond, and Clover Health – collectively, the group as meme Shares became known.
GameStop’s shares are up 1,506% so far this year. Shares rose from a 52-week low of $ 3.77 to a 52-week high of $ 483.
The trading frenzy has caught the attention of the US Securities and Exchange Commission. In a filing on Wednesday, GameStop announced it received a request from the SEC on May 26 to voluntarily provide documents and information. The company said it is reviewing the request and planning to work with it.
GameStop has tried other ways to get investor attention as it is more focused on e-commerce and attracting talent from other companies. That spring, Chewy co-founder Ryan Cohen was hired to lead efforts to grow the online business. He was named chairman at a shareholders’ 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, their chief growth officer.
Read the company’s results press release here and the CEO’s announcement here.
This story evolves. Please check again for updates.
Comments are closed.