A mall visitor walks into a GameStop store in San Rafael, California, on December 8, 2021.
Justin Sullivan | Getty Images
GameStop shares fell about 8% in extended trading on Thursday after the video game retailer reported an unexpected loss during the holiday quarter and declined to provide a financial outlook.
Still, the company said it is strengthening relationships with gaming brands and looking for new ways to monetize — including launching a new marketplace for non-replaceable tokens or NFTs by the end of the second quarter.
CEO Matt Furlong said during the company’s earnings call that GameStop is still in the early stages of turning itself back into a “customer-obsessed tech company.”
“It’s important to emphasize that the GameStop has become such a cyclical business and its capital is so starved that we have had to rebuild it from the inside out,” he said. “We’ve also had to change the way we assess revenue opportunities by embracing the new frontiers of gaming rather than running away.”
GameStop was an early target in the meme stock frenzy and has gained a new set of leaders looking to transform the brick-and-mortar chain into an e-commerce player. Chewy co-founder Ryan Cohen was tapped to lead the company’s turnaround as chairman of the board. He hired former Amazon executives Furlong and Mike Recupero as CEO and CFO, respectively.
In its most recent quarter, Furlong said, it made progress toward its digital goals. It closed deals and grew relationships with PC gaming brands, including Alienware, Corsair and Lenovo. The company also launched a redesigned app and hired dozens of people with experience in e-commerce, operations and blockchain gaming.
He said his membership program, PowerUp Rewards Pro, grew 32% year over year and now has about 5.8 million members.
However, those moves have yet to translate into profit. In the three-month period ended January 29, total revenue grew to $2.25 billion, but the company reported a net loss of $147.5 million, or $1.94 per share. That compares to earnings of $80.5 million, or $1.19 per share, a year earlier. Adjusted loss per share for the fourth quarter was $1.86.
The company took a hit from both supply chain challenges and the ommicron variant, Furlong said. He added that GameStop leaders have “made the conscious decision to lean in and absorb higher costs to meet customer demand.”
“We believed, and we still believe, that investing in our customers and rebuilding brand loyalty is in the company’s long-term interest at this time,” he said.
The retailer has not provided a financial outlook since the pandemic began in March 2020. It has also declined to answer questions from analysts about the company’s earnings calls over the past year, including during its call to investors Thursday.
Furlong said business leaders “do not think it wise to provide guidance during the early stages of our transformation and with the current global backdrop,” but he said they expect growth in the company’s stores, website and game offerings.
GameStop’s stock has soared in the past year. Shares hit a 52-week low of $77.58 on Monday — less than a quarter of the stock’s value last June.
As of Thursday’s close, GameStop shares are down about 41% so far this year. Shares were up about 1% on Thursday, closing at $87.70. The company’s market value is nearly $7 billion.
Read the GameStop news item here.
Correction: Mike Recupero is CFO of GameStop. And the company said it would launch a marketplace for non-replaceable tokens by the end of the second quarter. In an earlier version, the timeline was wrong.
This post GameStop (GME) Q4 2021 earnings was original published at “https://www.cnbc.com/2022/03/17/gamestop-gme-q4-2021-earnings.html”