game stop It posted its first quarterly profit in two years on Tuesday and ended the fiscal year on a high note for the holiday season after dealing with lower sales, inventory strains and cash flow pressures.
The company’s shares soared more than 45% in after-hours trading.
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in order to Quarter ended January 28net sales declined slightly to $2.23 billion Starting at $2.25 billion In the fourth quarter of last year, the video game retailer also posted a profit of $48.2 million (16 cents per share) compared with a loss of $147.5 million (49 cents).
GameStop has not provided financial guidance and has not since the early days of the pandemic. There are too few analysts covering the company to compare its results with Wall Street estimates.
The retailer is striving to restore profitability and got there by cutting costs. Selling, general and administrative expenses were $453.4 million (20.4% of sales), compared with his $538.9 million (23.9% of sales) in the same period last year.
The GameStop store opens March 16, 2023 in a strip mall in Chicago, Illinois.
Scott Olson | Getty Images
CEO Matt Furlong said on a conference call with investors that the company will further cut extra costs towards 2023, including in European markets where it has already exited and is beginning to exit some countries. Said he was making plans. GameStop is also looking to strengthen its business in higher-margin categories such as toys, he said.
GameStop used to ride short-term memetic stock momentum, but has since leveled off as the company has right-sized its business by cleaning out inventory levels and rebuilding its cost structure. rice field.
The stock closed at about $18 on Tuesday, down dramatically from a 52-week high of nearly $50 nearly a year ago.
GameStop’s turnaround plans have been reinvigorated by a management change for 2021. Amazon Veteran, at the helm, adding Ryan Cohen, crunchy founder and original Bed Bath & Beyond Activist investor, chairman of the board.The company also lay off staff Replaced chief financial officer.
Retailers have been working on Renewal of real estate portfolio Expand your online business as the video game industry heads in that direction.
Full-Year Fiscal 2021 GameStop Revenue of $5.93 Billion, Down Slightly from $6.01 Billion in Fiscal 2021, Long-Term Growth Driven by Increased Revenue from Collectibles Category Banked by Retailers is promoted.
Like many retailers, GameStop has gained experience supply chain delays A backlog of inventory remained after previously trying to meet high demand. The company still had $682.9 million in inventory, down from $915 million a year ago, according to its fourth-quarter balance sheet.
As part of its comeback strategy, GameStop is also working to improve its cash balance. Cash and cash equivalents for the quarter were $1.39 billion.
While managing the burden of its brick-and-mortar presence, the company has also worked to find a digital identity.
In September unfortunate partnership The bankruptcy cryptocurrency exchange FTX. The two companies planned to work together on e-commerce marketing, with GameStop planning to sell his FTX gift cards in stores. Two months later, GameStop murmured “Shrink” the partnership and refund everyone who purchased an FTX gift card in store.
Additionally, the company is experimenting with: NFT Marketplace From July.The launch took place in chat “Crypto Winter” That’s because cryptocurrencies have undergone a broad cooldown from their 2021 rally. The market saw an initial surge in volume, but has since plateaued, which may not be the ticket to the stable digital presence the company hoped for.
Still, Furlong said on a conference call with investors that the company is in a better position compared to 2021, when many predicted it was “heading for bankruptcy.”
“GameStop today is a much healthier business than it was at the beginning of 2021,” he said.
