GameStop Is Still In Trouble Despite Incredible E-Commerce Growth

GameStop Corp. (NYSE: GME) released fiscal second-quarter financial results after markets closed Tuesday. The video game retailer posted a net loss of $1.40 per share on $942.0 million in revenue, while consensus estimates had called for a net loss of $1.13 per share and $1.02 billion in revenue. In the same period last year, the company reported a net loss of $0.32 per share and $1.29 billion in revenue.

The retailer continued its phased reopening of its stores across all operating countries where restrictions related to the global pandemic were lifted. As a result, at the end of this quarter, the company had “substantially all of its worldwide locations open to limited customer access or curbside delivery.”

During the second quarter, total global sales decreased by 26.7% reflecting a 13% reduction in total store operating days due to temporary store closures and a 10% reduction in store base. Comparable store sales declined 12.7%, adjusting for fewer store operating days due to store closures as a result of COVID-19.

One of the numbers that really stood out this quarter was that global e-commerce sales increased 800% in the quarter.

The company did not issue guidance for the fiscal third quarter citing the uncertainty regarding COVID-19. Consensus estimates are calling for a net loss of $0.68 in EPS and $1.21 billion in revenue for the coming quarter.

Shares of GameStop closed Wednesday at $7.35, in a 52-week range of $2.57 to $8.45. The consensus price target is $4.79. Following the announcement, the stock is down 5% at $6.99 in the after-hours trading session.

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