GameStop, the video game retailer that has been making headlines over the past year for its rollercoaster stock ride, posted a quarterly profit for the first time in two years. The company’s shares soared over 45% during after-hours trading, reflecting the market’s positive response to the news.
In the quarter ending Jan. 28, GameStop’s net sales dropped slightly to $2.23 billion, down from $2.25 billion in the same period the previous year. it may, the organization posted a benefit of $48.2 million, or 16 pennies an offer, contrasted with a deficiency of $147.5 million, or 49 pennies an offer, in the past year’s quarter.
GameStop’s management has been working to turn around the company’s fortunes and get back to profitability, which they achieved in part by cutting costs. Selling, general and administrative expenses came in at $453.4 million, or 20.4% of sales, compared to $538.9 million, or 23.9% of sales, in the year-earlier period.
The company’s turnaround strategy was boosted by a leadership shake-up in 2021, which put CEO Matt Furlong, a veteran of Amazon, at the helm and added Ryan Cohen, founder of Chewy and previous Bed Shower and Beyond activist investor, as board seat. GameStop likewise laid off staff and replacedits CFO.
GameStop's full monetary year saw $5.93 billion in sales, down marginally from $6.01 billion the earlier year. The company is banking on increased revenues from its collectibles category to promote long-term growth.
While GameStop has been experiencing some short-term, meme-stock momentum, the company has been making progress in right-sizing its business by cleaning up its inventory levels and reworking its cost structure. The stock closed trading on Tuesday at around $18 per share, down emphatically from its 52-week high of almost $50 about a year prior.
Looking ahead, Furlong said the company is planning further cost-cutting measures in 2023, including in European markets where it has already exited some countries. GameStop is also considering adding higher margin categories such as toys to its business.
GameStop’s digital presence has been a work in progress, with the company trying to improve its cash balance and revamp its real estate portfolio while increasing its online business. While the company’s NFT marketplace saw an initial volume surge, it has since leveled off and may not be the ticket to a stable digital presence that the company had hoped it would be.
In addition, GameStop experimented with an ill-fated partnership with now-bankrupt crypto exchange FTX in September 2022. The organizations had wanted to team up on e-commerce marketing, and GameStop planned to sell FTX gift vouchers in its stores. after two months, GameStop tweeted that it would be "slowing down" the association and discounting anybody who had bought a FTX present card in its stores.
Despite these setbacks, GameStop’s management remains positive about the company’s future.Furlong said, "GameStop is a lot better business today than it was toward the beginning of 2021."
The company’s turnaround strategy was boosted by a leadership shake-up in 2021, which put CEO Matt Furlong, a veteran of Amazon, at the helm and added Ryan Cohen, founder of Chewy and previous Bed Shower and Beyond activist investor, as board seat. GameStop likewise laid off staff and replacedits CFO.
GameStop's full monetary year saw $5.93 billion in sales, down marginally from $6.01 billion the earlier year. The company is banking on increased revenues from its collectibles category to promote long-term growth.
While GameStop has been experiencing some short-term, meme-stock momentum, the company has been making progress in right-sizing its business by cleaning up its inventory levels and reworking its cost structure. The stock closed trading on Tuesday at around $18 per share, down emphatically from its 52-week high of almost $50 about a year prior.
Looking ahead, Furlong said the company is planning further cost-cutting measures in 2023, including in European markets where it has already exited some countries. GameStop is also considering adding higher margin categories such as toys to its business.
GameStop’s digital presence has been a work in progress, with the company trying to improve its cash balance and revamp its real estate portfolio while increasing its online business. While the company’s NFT marketplace saw an initial volume surge, it has since leveled off and may not be the ticket to a stable digital presence that the company had hoped it would be.
In addition, GameStop experimented with an ill-fated partnership with now-bankrupt crypto exchange FTX in September 2022. The organizations had wanted to team up on e-commerce marketing, and GameStop planned to sell FTX gift vouchers in its stores. after two months, GameStop tweeted that it would be "slowing down" the association and discounting anybody who had bought a FTX present card in its stores.
Despite these setbacks, GameStop’s management remains positive about the company’s future.Furlong said, "GameStop is a lot better business today than it was toward the beginning of 2021."
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