Tag: GameStop

GameStop Posts Surprise $48 Million Quarterly Profit

GameStop, the world’s No. 1 brick-and-mortar video game retailer, March 21 reported unexpected fourth quarter (ended Jan. 28) net income of $48.2 million on revenue of $2.22 billion. That compared with a loss of $147.5 million on revenue of $2.25 billion during the previous-year period.

The Grapevine, Texas-based chain said it generated net sales of $5.93 billion for the fiscal year, compared to $6.01 billion for fiscal year 2021. The company narrowed the fiscal loss to $313.1 million from a net loss of $381.3 million in 2021.

Matt Furlong

Hardware and accessories in the quarter accounted for 55.8% ($1.238 billion) of total sales compared to 52.7% ($1.185 billion) a year ago, while software sales fell to 30.1% ($668 million) from 34.9% ($785 million) last year.

GameStop continues to make inroads into collectibles, generating 14.1% ($313 million) in sales of memorabilia, dolls, action figures, posters and T-shirts, among others, compared to 12.4% ($279 million) a year ago. The chain generated another $4.5 million in digital sales.

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“Collectables is an area in which the company continues prioritizing long-term growth,” GameStop said in a statement.

On the fiscal call, CEO Matt Furlong said GameStop would continue exiting select European markets going forward in an effort to streamline operating expenses.

“Although there is a lot of hard work and necessary execution in front of us, GameStop is a much healthier business today than it was at the start of 2021,” Furlong said. “We have considerable cash on hand, negligible debt, streamlined inventory and a path to full year profitability. Our plan is to use this strong positioning to continue delivering a unique customer experience and long-term stockholder value.”

Wall Street jumped at the news, sending GameStop shares up almost 35% in after-market trading at $23.95 per share.

GameStop Launches NFT Marketplace

GameStop July 11 announced the launch of a marketplace to allow gamers, creators, collectors and other consumers to buy, sell and trade non-fungible tokens (NFTs).

The video game retailer’s NFT marketplace is a non-custodial, Ethereum Layer 2-based marketplace that enables parties to own their digital assets, which are represented and secured on the blockchain.

The NFT market revolves around collectibles, including digital artwork, sports cards and similar artifacts that can create market value based on consumer interest.

The marketplace, which can be accessed at https://nft.gamestop.com, allows parties to connect to their own digital asset wallets such as the recently launched GameStop Wallet. Over time, the marketplace will expand functionality to encompass additional categories such as Web3 gaming, more creators and other Ethereum environments, according to GameStop.

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GameStop, which most-recently posted a $147.5 million quarterly loss, is looking to transform from a legacy packaged-media retailer to digital and streaming gaming.

GameStop Fires CFO Amid Staff Cuts

GameStop Corp., the world’s largest video game retailer, has terminated the employment of CFO Michael Recupero — about a year after hiring him and CEO Matt Furlong from Amazon.

The company said Diana Saadeh-Jajeh, formerly chief accounting officer, would assume the CFO position, effective immediately. Saadeh-Jajeh previously held the CFO role on an interim basis in 2021.

She receives the same $200,000 base salary as Recupero and is eligible for $1.9 million in bonuses — a little more than half the reported $3.6 million in sign-on bonuses Recupero received.

The move comes amid ongoing staff cuts as GameStop attempts to reduce costs. The retailer posted a net loss of $157.9 million on revenue of $1.37 billion in quarter ended April 30. That was more than double the $66.8 million loss on revenue of $1.3 billion in the previous-year period.

“Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results,” Furlong reportedly wrote in a company memo.

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GameStop Ups Fiscal 2021 Revenue — and Loss

Game Stop’s first report card under new management suggests it still has a way to go in its quest to transition beyond its legacy retail footprint.

The nation’s largest video game retailer reported a fourth-quarter (ended Jan. 29) loss of $147.5 million on revenue of $2.25 billion. That compared with net income of $80.5 million on revenue of $2.12 billion in the previous-year period.

For the fiscal year, GameStop expanded its loss to $381.3 million on revenue of $6 billion. That compared with a fiscal loss of $215.3 million on $5 billion in revenue in 2020.

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When GameStop last year hired Chewy.com founder Ryan Cohen as its new chairman, the tech-savvy entrepreneur shook up senior management, transplanting the company’s brick-and-mortar retail focus with e-commerce and digital distribution, including hiring former Amazon executive Matt Furlong as CEO.

On the company’s March 17 earnings call, Furlong attributed the increased loss to growing pains as the company transitions away from packaged media to digital gaming and distribution. Indeed, the company plans to launch a branded non-fungible token marketplace by the end of Q2 in an effort to capitalize on the reported $40 billion NFT market.

The chain did up its “PowerUp” rewards membership program by 32% from 2020, ending last year with more than 5.8 million members.

“It is important to stress that GameStop had become such a cyclical business, and so capital-starved, that we have had to rebuild it from within,” Furlong said on the call. “We felt, and continue to feel, that investing in our customers and rebuilding brand loyalty right now is in the company’s best interest over the long term.”

Wall Street isn’t so sure. GameStop shares fell more than 7% in after-market trading.

GameStop Stock Doc ‘Gaming Wall St’ Debuts March 3 on HBO Max

The two-part Max Original documentary Gaming Wall St, about the GameStop stock controversy, debuts March 3 on HBO Max.
 
Narrated by Kieran Culkin (HBO’s “Succession”), the documentary explores the historic 2021 short squeeze of GameStop, and how a group of armchair investors and online vigilantes ultimately helped expose the dark underbelly of Wall Street.
 
“Gaming Wall St peels back the layers of one of the most talked about news stories in 2021, revealing the systemic issues and underbelly of the financial world,” said Joanna Zwickel, SVP of documentary features and series at producer Gunpowder & Sky in a statement. “It’s an honor to have this series live on HBO Max.” 

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“I wanted to create a compelling documentary about a niche online community which grew into the movement behind GameStop and momentarily shifted the balance of power on Wall Street,” said director Tobias Deml in a statement. “I saw a great need for access to education about investing. We have the opportunity to right a decades-old wrong created by powerful firms that have been gaming the system to the detriment of society. I hope that viewers will feel empowered to see themselves as investors and be part of a much-needed reform to Wall Street.”

 

GameStop Ups Q3 Revenue, Widens Loss

GameStop, the nation’s largest video game retailer, reported third-quarter (ended Oct. 30) revenue of nearly $1.3 billion, up 30% from revenue of $1 billion during the previous-year period. The chain also realized a net loss of $105 million, which widened 460% from a loss of $18 million in the prior-year quarter.

Much of the loss was attributed to front-loading investments in inventory to meet increased customer demand and mitigate supply chain issues during the pandemic. Inventory in the quarter topped $1.14 billion, compared with $861 million at the close of the prior year’s third quarter.

GameStop saw a 62% jump in hardware sales to $670 million, driven by sales of new-generation game consoles from Microsoft Xbox, Sony PlayStation, as well the Nintendo Switch. Software sales dipped 2% to $434 million, while accessories sales increased 30% to $192 million.

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GameStop also opened new offices in Seattle and Boston, which are technology hubs with established talent markets. Under new senior management looking to jumpstart digital gaming and consumer electronics sales, CEO Matt Furlong, on the fiscal call, said the company would continue to focus on the long term.

“We will continuously prioritize growth and market leadership over short-term margins,” he said without elaborating.

Wall Street wasn’t impressed, sending shares down more than 4% in premarket trading.

Michael Pachter, media/gaming analyst with Wedbush Securities in Los Angeles, said he expects to see “flattish top-line growth” in 2022, while remaining “quite optimistic” about a return to profitability.

At the same time, Pachter is no fan of GameStop’s volatile stock, which has been the subject of a high-profile short squeeze by crowdsourced individual investors, coupled with ongoing support from certain retail investors.

“[The actions] have spiked the share price to levels that are completely disconnected from the fundamentals of the business,” Pachter wrote in a Dec. 9 note.

Indeed, the Securities Exchange Commission is investigating trading activity surrounding GameStop shares. On Aug. 25, the SEC issued a subpoena calling for additional documents, as a follow up to an initial request for information surrounding the events that led to GameStop shares skyrocketing in value.

“We are in the process of producing the documents and have been and intend to continue cooperating fully with the SEC regarding this matter,” GameStop said in a statement.

GameStop Opens Lower Following Mixed Financials

The day after world’s largest video game retailer GameStop posted mixed second-quarter (ended July 30) financial results, company shares trended down during early Sept. 9 trading.

Despite a retail footprint of thousands of stores, GameStop rebooted its senior management team, incorporating a team of e-commerce experts led by new chairman Ryan Cohen, founder of Chewy.com. The company is in the process of transitioning from physical retail to technology and online gaming.

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Cohen & Co.’s ascendancy has been fueled in part by crowdsourced-investors looking to manipulate GameStop shares for short-term gains. The strategy has worked thus far, with shares up 860% year-to-date based largely on non-business fundamentals. Quarterly revenue topped $1.18 billion, above an industry estimate of $1.12 billion.

Regardless, GameStop management conducted no Q&A during its Sept. 8 fiscal call — the second consecutive fiscal period it has done so.

As a result, much of the established Wall Street investment community has abandoned GameStop, except Wedbush Securities game expert Michael Pachter. The analyst questions when Cohen will live up to his hype.

“I am waiting for his brilliant strategy, and it’s not going to be brilliant,” Pachter told Yahoo Finance. “If it was brilliant, then he would have let us know, months and months and months ago. [Cohen] is trying to revolutionize an industry that has already passed him by. He’s audacious, and he’s wrong on this one.”

GameStop to Rebrand EB Games in Canada

GameStop July 28 announced that it plans to rebrand 4,000 EB Games stores in Canada to GameStop. By the end of this year, EB Games’ Canadian locations and online store will assume the GameStop brand and name.

GameStop acquired Electronic Boutique in 2005 for $1 billion. It remains Canada’s largest video game retailer.

“This decision follows our receipt of feedback from our valued customers and stockholders,” GameStop said in a media statement.

The company, under a new CEO Matt Furlong and chairman Ryan Cohen, will join the S&P MidCap 400 exchange on Aug. 4.

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GameStop Expands Fulfillment With New Facility in Reno, Nevada

GameStop July 6 announced the continued expansion of its North American fulfillment network and entry into a lease of a 530,000 square foot facility in Reno, Nevada, which is expected to be operational in 2022.

The nation’s largest video game retailer’s new presence in Reno will position it to grow in-store and online product offerings and expedite shipping across the west coast. This expansion follows GameStop’s entry into a lease of a 700,000 square foot facility in York, Penn.

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The facility leases follow the June 21 appointment of new CEO Matt Furlong, a former Amazon executive, hired as part of new chairman Ryan Cohen’s initiative to expand GameStop’s e-commerce initiatives.

GameStop Generates $1.1 Billion at the ‘ATM’

GameStop, the world’s largest standalone video game retailer, continues to defy Wall Street sensibilities despite middling financials.

The Grapevine, Texas-based chain said it generated about $1.1 billion in revenue from “at-the-market” (ATM) sales of 5 million shares of common stock. An ATM offering is a type of stock sale utilized by publicly traded companies in order to raise capital over time.

GameStop, which said it would use the proceeds for “general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet,” initiated the sale on June 9.

Meanwhile, GameStop reported a net loss of $215 million for the fiscal year ended Jan. 31. Revenue declined 22% to $5 billion.

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Since the beginning of the year, the chain has become caught up in a social media frenzy pitting crowdsourcing individual day traders against established Wall Street hedge funds. Under a David vs. Goliath media spotlight, individual traders working together were able to skyrocket GameStop’s stock valuation, resulting in significant fiscal losses for hedge funds that had bet the shares would decline in value.

Abetting the situation was the arrival of Chewy.com founder Ryan Cohen, a populist star among individual traders, who initially bought a lot of shares of GameStop when prices were low, i.e. $4 to $5 per share, and then proceeded to help  jumpstart the stock in valuation.

Soon Cohen was named to the board and then chairman. That meant the arrival of new senior executives, including former Amazon executive Matt Furlong as new CEO, with a push to jumpstart e-commerce revenue. Meanwhile, previous CEO George Sherman is exiting with a golden parachute worth about $100 million thanks to GameStop shares hovering around $214 per share in pre-market trading — compared with about a $3.77 per share low within the past fiscal year.