GameStop Loses $100 Million, Says New-Gen Console Stock Should Improve Soon
GameStop's overall revenue and profit declined year-over-year, but better times may be ahead, the company claims.
Retailer GameStop has released its latest earnings report, and the company had another tough quarter. For the company's fiscal second quarter (May-July), GameStop posted an overall loss of $108.7 million, which is worse than the $61.6 million loss that GameStop had in the same period last year.
Net sales, or total revenue, also declined. It fell from $1.183 billion during fiscal Q2 of last year to $1.136 billion this latest quarter. GameStop is focusing a lot on its Collectibles category, and this segment of its business posted year-over-year growth, rising from $177.2 million to $223.2 million for this year's fiscal Q2.
Additionally, GameStop said it was able to cut some "selling, general, and administrative" costs as part of its efforts to "right-size" the business. GameStop recently fired its CFO and enacted a round of layoffs, including at Game Informer.
For the end of fiscal Q2, GameStop had more than $900 million in cash and cash equivalents on hand, the company said.
In an earnings call, CEO Matt Furlong said brighter times may be ahead, as he mentioned that GameStop should have a "stronger supply" of the very in-demand current-generation consoles in the months ahead.
Furlong said GameStop might not be posting revenue and profit gains right now, but he believes GameStop is in a "much stronger" financial position now than it was 18 months ago. He said GameStop's plan to turn things around--which includes pushing into the crypto/NFT space--carries risk and takes time, but it's a path forward he believes in.
"We are working to accomplish something unprecedented in our industry: transform a legacy brick-and-mortar retailer into a technology-led organization that meets customers' needs through stores, e-commerce properties, and both digital marketplaces and new online communities," Furlong said.
Also during the call, Furlong confirmed that GameStop is offering hourly workers higher pay and giving equity grants of $21,000 to store leaders in the US to help improve retention among its workforce.
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