GameStop shares fell about 4% in extended trading on Wednesday, after the video game retailer reported that its losses widened in the fiscal third quarter.
The company reported that its net loss grew to $105.4 million, or $1.39 per share, from a loss of $18.8 million, or 29 cents per share, a year earlier.
Total revenue grew to $1.30 billion from $1.00 billion a year earlier. The company said its sales grew as it expanded relationships with brands, including Samsung, LG, Razer and Vizio.
Inventories grew in the latest 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, compared 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 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 the company’s board. He shook up top management by hiring former Amazon executives, Matthew Furlong, and Mike Recupero, as CEO and COO, respectively.
The Grapevine, Texas-based company said it has 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 with 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 steps that the video game retailer has taken. He said GameStop has hired more than 200 senior employees from some top technology companies and expanded merchandise, such as 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.
“We continue to see a customer-first culture taking hold throughout our stores, fulfillment centers and corporate offices,” he said on the call. “Maintaining this emphasis on the customer will remain key as we work to grow across categories and new areas.”
Along with its core business, he said the video game retailer is “exploring emerging opportunities,” including blockchain, NFTs and web 3.0 Gaming.
For now, he said the company wants to win market share and drive more sales — with the belief that long-term gains and large profits will follow.
“Focus on the long term means we will continuously prioritize growth and market leadership over short-term margins,” he said.
As of Wednesday’s close, GameStop shares are up 825% this year. Shares closed Wednesday at $173.65, down 2.34%. The company’s market value is $13.28 billion.
