The share of GameStop Corp. rose 48% in the extended session on Tuesday after the specialty retailer reported surprising quarterly earnings and sales that beat Wall Street’s expectations.
The retailer is “aggressively focused on improving profitability year-over-year while still pursuing pragmatic long-term growth,” Chief Executive Matt Furlong said during the post-results talk with the company.
earned $48.2 million, or 16 cents per share, in the fourth quarter, as opposed to a loss of $147.5 million, or 49 cents per share, in the year-ago quarter.
Revenue fell slightly to $2.23 billion from $2.25 billion a year ago, in the fourth quarter of last year.
Analysts polled by FactSet expected the video game retailer to report an adjusted loss of 13 cents per share on revenue of $2.18 billion.
GameStop said it reduced its stock to $682.9 million at the end of the quarter, compared to $915 million at the end of Q4 2022.
That reflected the company’s “ongoing focus on maintaining a healthy inventory position,” the company said.
GameStop said it has completed most of its upgrades related to infrastructure, systems, shipping capabilities, and online and mobile platforms.
Speaking to analysts after the results, Furlong said the company is taking steps this fiscal year to improve efficiency and meet profitability goals.
Those include continuing to cut costs, including in Europe, leveraging GameStop’s “fortified financial position” to continue improving supplier terms, and getting the full allotment of consoles to meet demand, he said .
Building “a stronger presence” in high-margin categories such as collectibles and toys, where the company also sees “growth areas,” is also on the table, Furlong said.
“GameStop is a much healthier company today than it was at the beginning of 2021,” the CEO said.
GameStop shares ended the regular trading day up 4.6%, gaining about 12% in the four days since closing at a two-year low.
GameStop has reported bigger-than-expected losses in three of the past four quarters, but its stock has risen an average of 8.2% the day after each of the past four reports, according to data from FactSet.
The one-off meme stock lost about 13% over the past three months, while the S&P 500 index
has gained 2.6%.
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