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.
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.