GameStop Corp. reported third-quarter results that missed analysts’ estimates as well as a revenue decline after the market close on Wednesday.
said it lost $94.7 million, or 31 cents a share, in the third quarter, compared with a loss of $105.4 million, or $1.39 a share, in the prior year’s quarter.
Adjusted for one-time items, the company lost 31 cents a share.
Sales fell to $1.186 billion, compared with $1.297 billion in the prior year’s quarter.
Analysts surveyed by FactSet expected GameStop
to report an adjusted loss of 28 cents a share on sales of $1.345 billion.
GameStop also reported its seventh consecutive quarterly loss. Speaking during a conference call after market close, GameStop CEO Matt Furlong said that the company’s priorities are achieving profitability in the near team and growth in the long term. “We’re seeking to transform a legacy brick-and-mortar business that was on the brink of bankruptcy,” he said. The company is a stronger business today than at any time in the recent past, he added.
The CEO said that, throughout 2021 and 2022, the company was extremely focused on repairing what he described as “our decayed foundation.”
Furlong also described reductions in headcount during the back half of this year, but did not give specific numbers. “We now have a firm understanding of the resources required to pursue opportunities in gaming,” he said.
GameStop’s stock rose in after-hours trading Wednesday.
Inventory was $1.131 billion at the end of the quarter, compared with $1.141 billion at the end of the prior year’s third quarter. The company also ended the quarter with $1.042 billion in cash, cash equivalents and marketable securities. GameStop’s long-term debt remains limited to a low-interest, unsecured term loan associated with the French government’s response to COVID-19, the company said.
GameStop’s stock ended the regular trading day down 4.8%, compared with the S&P 500 index’s
decline of 0.2%. The video game retailer’s stock has declined 40% in 2022, outpacing the S&P 500 index’s decline of 17.5%.
GameStop, like its fellow meme stock AMC Entertainment Holdings Inc.
, was a major beneficiary of the meme-stock buying frenzy in January 2021, which sent the struggling company’s shares skyrocketing to dizzying heights. Between January and March 2021, GameStop’s stock price rose more than 1,200% and the company’s market cap surpassed $17 billion. The company’s market cap is now around $7.1 billion.
In September, GameStop’s stock surged after the company reported a narrower-than-expected loss and announced a partnership with cryptocurrency exchange FTX. Last month, FTX, which was once the world’s third-largest crypto exchange, filed for bankruptcy following a dramatic collapse that sent shockwaves through the crypto industry.
On Nov. 11, GameStop tweeted that it was winding down its relationship and pilot partnership to market gift cards with FTX and that it would provide refunds to affected customers.
Speaking during the conference call, Furlong said that approximately $50 million of GameStop’s revenue decline was attributable to FTX.
GameStop did not provide any guidance.
Of three analysts surveyed by FactSet, one has a hold rating and two have a sell rating for GameStop.