GameStop Corp. shares were unstable in Tuesday’s extended session, when the video game retailer at the center of the so-called meme stock phenomenon said it had laid the groundwork for its “transformation” and reported lower than expected adjusted fourth quarter earnings and sales.
GameStop GME,
the shares initially rose more than 8% after the report, but later reduced earnings and fell 3%. The retailer said it earned $ 80.5 million, or $ 1.19 per share, in the quarter, compared with a profit of 32 cents per share for the same period last year.
Adjusted for single items, GameStop raised $ 90.7 million, or $ 1.34 per share, compared to $ 1.27 per share a year ago.
Sales fell to $ 2.12 billion, compared to $ 2.19 billion in the fourth fiscal quarter of 2019, reflecting the pandemic-related store closures, the company said.
Analysts surveyed by FactSet had expected the video game retailer to post adjusted earnings of $ 1.35 per share on sales of $ 2.21 billion.
GameStop said same-store sales increased 6.5% in the quarter, with online sales growing 175% in the quarter and 191% in fiscal 2020. Analysts surveyed by FactSet expected same-store sales to increase 4, 7% in the quarter.
The company said it “strengthened” its balance sheet and ended the year with $ 635 million in cash, “laying the foundations for transformation”.
In a separate press release, GameStop said it had appointed Jenna Owens as chief operating officer, starting on Monday, March 29. Owens was director and distribution manager for Amazon.com Inc. AMZN,
The company also named Neda Pacifico, who was an executive at Chewy Inc. CHWY,
as senior vice president of e-commerce. The Pacific also starts on Monday.
Chewy co-founder Ryan Cohen and two of his allies joined GameStop’s board earlier this year, which raised hopes that he would direct a reform.
GameStop’s stock is often cited as one of the meme stocks that have skyrocketed in recent months thanks to frantic increases in Reddit comments and social media posts.
See too: GameStop: What’s fun about fundamentals, ask Reddit traders on the rocket emoji launch pad
GameStop shares have gained over 800% in the last three months, compared to gains of around 7% for the S&P 500 SPX index,