After several wild weeks in the spotlight, GameStop Corp. (NYSE: GME) released financial results for the quarter ended January 30thOn Tuesday, GameStop showed it has achieved its first quarterly revenue increase in two years, but falls short of Wall Street expectations. The gaming retailer has also added a former From Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG) owns Google manager to his team. However, shares were down 33% due to a lack of transformation details.
Net sales were $ 2.1 billion for the quarter, 3% less than the same period last year due to store closures related to the coronavirus in Europe and a 12 percent decline in GameStop’s store base. According to Refinitiv, the figure is also slightly below the $ 2.2 billion that Wall Street analysts expected. Net income for the quarter was $ 80.5 million, or $ 1.19 per diluted share, well below analyst expectations.
However, it was a significant improvement from the $ 21 million in net income earned in the corresponding quarter last year. GameStop made $ 1.34 a share on an adjusted basis, which is a cent less than analysts’ forecast. For the full year 2020, GameStop posted a net loss of more than $ 215 million.
Global ecommerce sales were up 175% and were a rare bright spot as they generated 34% of the company’s total net sales during the quarter, up from 12% in the same period last year. That bodes well for the company’s efforts to move to online sales, as it closed a net 693 stores in 2020, with 4,816 stores worldwide now.
Comparable store sales grew 6.5 percent year-over-year during the quarter, compared to a 24.6% decline in the third quarter, driven by a strong increase in online revenues during the holiday season.
The retailer named Jenna Owens, former CEO of Amazon and Google, as the new chief of operations, who is part of a wider shake up of its leadership in an effort to end a year-long decline in sales. GameStop has already won Ryan Cohen, the co-founder of Chewy.com, who invested heavily in the company and became the largest shareholder, to lead the expansion of its e-commerce business.
In early February, Matt Francis, a former tech leader at Amazon Web Services, was appointed as the company’s first-ever chief technology officer with the responsibility of overseeing e-commerce and technology-related functions. Weeks later, the company announced that its Chief Financial Officer Jim Bell is stepping down and is looking for a new finance leader with the capabilities and qualifications to help accelerate the company’s transformation.
GameStop’s sales have fallen in recent years as it struggled to adapt to the realities of digital downloads and free-to-play online games that have taken over the gaming world and traffic in shopping malls has slowed as consumers have moved online. But its CEO, George Sherman, believes the company was entering 2021 strongly, citing a 23% increase in same-store sales in February amid strong global demand for gaming hardware.
GameStop did not provide financial guidance for 2021. But Tuesday’s call was used to provide details of a number of other strategic initiatives aimed at transforming the company in 2021, such as a plan to open a US-based customer service division. and expand the product. offers that go beyond video games and consoles. By adding computers, monitors, mobile gaming, gaming TVs and other PC gaming products to its offering, GameStop hopes to expand its addressable market by more than five times.
In 2021, the focus will be on improving the ecommerce footprint and customer experience by accelerating delivery, providing superior customer service and expanding the catalog. The game retailer is clearly working hard to turn things around and transform itself into “a customer-obsessed technology company that thrills gamers”. Many investors hope Cohen can shake things up for the gaming retailer to get into the e-commerce game.
This article is not a press release and was contributed by a verified independent journalist for IAMNewswire. At no point should it be construed as investment advice, read it in full disclosureIAM Newswire does not hold any position in the listed companies. Press Releases – If you are looking for a full contact for press release distribution: [email protected] Contributors – IAM Newswire accepts pitch. If you are interested in becoming an IAM journalist: [email protected]
The GameStop Needs to Put Its Game Face On post first appeared on IAM Newswire.
Photo by Michael Förtsch on Unsplash