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September 2, 2022:-
GameStop shares decreased about 4% in extended trading after the video game retailer reported that its losses widened in the fiscal third quarter.
The company reports that its net loss increased to $105.4 million, or $1.39 per share, from $18.8 million, or 29 cents for each share, a year earlier.
Total revenue increased to $1.30 billion from $1.00 billion a year earlier. Its sales grew as it got wider relationships with brands, which include Samsung, LG, Razer, and Vizio.
Inventories grew in the recent quarter as GameStop looked to get ahead of supply chain challenges and be well-stocked for the holidays. At the close of the quarter, inventory was $1.14 billion, in comparison with $861 million at the same time last year.
GameStop is one of the companies that has gotten fresh attention from investors, thanks to Reddit posts and the meme stock frenzy. Shares of the company have soared, along with other meme stocks, including AMC and Bed Bath & Beyond. That attracted the scrutiny of the U.S. Securities and Exchange Commission, prompting the regulatory body to request documents about trading activity.
As GameStop tries to transform from a brick-and-mortar chain into more of an e-commerce retailer, it has tapped a slate of new leaders. It enlisted Chewy co-founder Ryan Cohen to lead the company’s turnaround as chairman on its board. He shook up top management by hiring former Amazon executives Matthew Furlong and Mike Recupero as CEO and COO, respectively.
The Grapevine, the Texas-based company, said it had opened new offices in Seattle and Boston to draw talent in the tech hubs. It said it also secured a $500 million asset-based lending credit facility in November to help liquidity and reduce borrowing costs.
Still, GameStop’s new leaders have provided few details about their turnaround strategy and have yet to share an outlook. They have not answered questions on the company’s past several earnings calls, including the one on Wednesday.
In brief remarks on Wednesday’s call, Furlong emphasized the video game retailer’s steps. He said GameStop has hired more than 200 senior employees from some top technology companies and expanded merchandise by adding more personal computing gaming items across about 60% of its U.S. locations. He said the company is committed to improving customer service and delivering goods faster.
As of Wednesday’s close, GameStop shares are up 825% this year. Shares closed Wednesday at $173.65, nearly 2.34%. The company’s market value is $13.28 billion.
