GameStop (GME) falls 4.40% after reporting quarterly results
21:17, 8 December 2021
Gamestop stock fell over 4.40% in after-market trading Wednesday after missing third-quarter EPS estimates by over 167% while topping revenue estimates.
After the markets closed, Gamestop reported a $1.39 per-share loss, missing Rivinitiv’s mean analyst estimate of a 52 cent per-share loss. Quarterly revenue, however, came in at $1.29bn (£0.97bn), topping $1.19bn estimates.
The Grapevine, Texas-based specialty retailer reported a $105.4m net loss in the third quarter, compared to the $18.8m quarterly loss in 3Q20.
Brief conference call
On the post-earnings conference call, during which he did not take questions, CEO Mark Furlong blamed the per-share loss on the company’s strategy of focussing on sales and revenue growth, while front-loading inventory to meet consumer demand and manage supply-chain issues.
“Our focus on long-term revenue growth is how we think shareholders should judge our performance,” Furlong said on the call. “Our emphasis on top-line growth will lead to scale.”
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Holding cash to manage inventory
Furlong added Gamestop ended the third quarter with $1.14bn in cash and $46m in unsecured debt. “We continue to maintain a sizeable cash position to manage our inventory and mitigate supply-chain challenges,” he said.
Furlong added Gamestop is increasing its technology staff after opening an office in Seattle, Washington and exploring offices in Boston, Massachusetts, which he called technology hubs.
Additionally, Gamestop is actively exploring blockchain, cryptocurrency and non-fungible token (NFT) initiatives, aalthough Furlong did not elaborate further.