After several crazy weeks in the spotlight, GameStop Corp. (NYSE: GME) released financial results for the quarter ended January 30º. On Tuesday, GameStop showed that it achieved its first quarterly sales increase in two years, but fell short of Wall Street expectations. The game retailer also added an old Amazon.com, Inc. (NASDAQ: AMZN) and Alphabet Inc (NASDAQ: GOOG) Google executive for your team. However, the shares fell 33% due to the lack of transformation details.
Fourth quarter figures
Net sales were $ 2.1 billion during the quarter, 3% below the same period last year due to the closure of coronavirus-related stores in Europe and a 12% reduction in GameStop’s store base. The figure is also slightly below the $ 2.2 billion that Wall Street analysts had expected, according to Refinitiv. Net income for the quarter was $ 80.5 million, or $ 1.19 per diluted share, which was well below analysts’ forecasts.
However, it was a significant improvement over the $ 21 million in net revenue achieved during the corresponding quarter last year. GameStop earned $ 1.34 per share on an adjusted basis, which is a penny behind analysts’ forecast. For the entire year 2020, GameStop recorded a net loss of more than $ 215 million.
Global e-commerce sales increased by 175% and presented a rare positive point, since they represented 34% of the company’s total net revenue during the quarter, against 12% in the same period last year. This bodes well for the company’s effort to transition to online sales, as it closed a chain of 693 stores in 2020, with now 4,816 stores worldwide.
Comparable sales grew 6.5 percent YoY during the quarter, compared to a drop of 24.6% in the third quarter, driven by an increase in online revenues during the holiday period.
New addition
The retailer named Amazon and former Google executive Jenna Owens as its new chief operating officer, which is part of a broader shift in its leadership in an effort to end the years-long sales decline. GameStop has already won over Ryan Cohen, the co-founder of Chewy.com who invested heavily in the company and became its largest shareholder, to lead the expansion of its e-commerce business.
In early February, Matt Francis, a former engineering leader at Amazon Web Services, was appointed the company’s first chief technology officer with responsibility for overseeing e-commerce and technology-related functions. Weeks later, the company announced that its chief financial officer, Jim Bell, is stepping down and that he is looking for a new financial leader with the resources and skills to help accelerate the company’s ongoing transformation.
GameStop’s sales have plummeted in recent years as it has struggled to adapt to a reality of digital downloads and free online games that dominated the gaming world, with shopping center traffic slowing as consumers connected. But CEO, George Sherman, believes the company entered 2021 strong, citing a 23% increase in February same-store sales amid strong global demand for gaming hardware.
Panorama
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 business in 2021, as a plan to establish a state-based customer service operation. United, along with expanding its product offerings in addition to video games and consoles. By adding computers, monitors, mobile games, game TVs and other PC game products to its offerings, GameStop expects to expand its accessible market more than five times.
The emphasis in 2021 will be on improving your e-commerce footprint as well as the customer experience by accelerating delivery, providing superior customer service and expanding the catalog. The game retailer is obviously working hard to turn things around and become “a customer-obsessed technology company that delights gamers.” Many investors hope that Cohen can shake things up so that the game retailer can participate in the e-commerce game.
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