GameStop stock fell after hours on Wednesday, after the video-game retailer reported a bigger per-share loss than expected, but revenue that beat expectations.
The results for the original meme stock arrive as spending on video games increases. But they also come as the company, like other retailers, faces questions about the world’s battered supply chain and adapting to a digital world. But GameStop continued its earnings tradition of not answering questions.
GameStop reported revenue of $1.297 billion, better than FactSet estimates for $1.189 billion. Yearly comparisons have gotten tougher as more GameStop stores reopened in late 2020.
The company lost $1.39 per share. That was worse than the 52-cent per-share loss forecast.
The retailer ended the quarter with cash and equivalents of $1.413 billion.
GameStop said it had $1.141 billion in inventory at the end of the quarter, reflecting its “focus on front-loading investments in inventory to meet increased customer demand and mitigate supply chain issues.”
In late trade trading, GameStop stock fell 3.25% to 168 in the stock market today, after losing 2.3% in Wednesday’s regular trading. GME stock popped 6.4% on Tuesday.
Fellow meme stock AMC Entertainment (AMC) was down 1.9% in overnight trading. AMC stock rose 4.2% on Wednesday, reclaiming its 200-day line, after Tuesday’s 7.8% gain.
GameStop stock whiplashed higher at the beginning of the year, and has gone through less dramatic peaks and valleys since then. GME stock is well off a record high of 483 reached in January. But shares are still up more than 800% year-to-date. GameStop stock is far above pre-2021 levels.
The exact identities of the investors behind those moves hasn’t always been clear over that time. But what began as a retail-investor revolt against short sellers betting against a handful of stocks grew to target the likes of Robinhood (HOOD) and, more recently, Fidelity, after trade restrictions and broader suspicions of being misled and short-changed.
Amid that tidal wave, the video-game retailer has raised money through offerings of GameStop stock, helping to shore up its balance sheet.
But some analysts have wondered whether GameStop is built for an environment where more sales, and gaming itself, are happening online. Recent post-earnings conference calls have been brief — and without a Q&A. The call on Wednesday was no different. The company did not immediately respond to a request for comment.
GameStop has taken steps to broaden its distribution footprint, striking agreements to lease out fulfillment-center space in Pennsylvania and Nevada. The company said those facilities will help it handle more online orders, expand its product line and ship goods out more quickly. GameStop recently appointed two Amazon (AMZN) veterans as CEO and CFO.
‘Slight Decline’ In Gamers?
U.S. consumer spending on video-game products from July through September rose 7% to $13.3 billion, according to the NPD Group, a market research firm. The PlayStation 5 and Xbox Series consoles helped drive that demand, as did subscriptions and mobile gaming, according to NPD.
The firm said that the market experienced “a slight decline” in gamers overall. But it said those that are playing are playing longer and spending more than a year ago.
Elsewhere, the chip shortage has disrupted product releases and availability for gaming consoles, Columbia Threadneedle analyst Dave Egan said in October.
Other snags in the shipping supply chain have raised transportation costs and heightened the risk of delays — particularly during the holiday shopping season.
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