GameStop Corp. (NYSE: GME) released fiscal second-quarter financial results after markets closed Tuesday. The video game retailer posted a net loss of $0.53 per share on $1.00 billion in revenue, while consensus estimates had called for a net loss of $0.85 per share and $1.09 billion in revenue. In the same period last year, the company reported a net loss of $0.49 per share and $1.29 billion in revenue.
Management noted that third quarter results were in-line with the firm’s muted expectations and reflected operating during the last few months of a seven-year console cycle and a global pandemic, which pressured sales and earnings. The firm continued to significantly advance its strategic objectives of creating a digital-first, omni-channel ecosystem for games and entertainment and optimizing its core operations.
During the second quarter, total global sales decreased by 30.2% reflecting a 10% reduction in the store base. Comparable store sales declined 24.6%.
One of the numbers that really stood out this quarter was that global e-commerce sales increased 257% in the quarter.
Gamestop begins the fourth quarter with ‘unprecedented’ demand in new video game consoles that launched in November, which drove a 16.5% increase in comparable store sales for the month, despite being closed on Thanksgiving Day and the impact of COVID-19 related store closures.
Although the firm anticipates to post positive year over year sales growth and profitability in the fourth quarter, the company did not issue guidance for the fiscal fourth quarter citing the uncertainty regarding COVID-19. This is reflecting the introduction of new gaming consoles, elevated omni-channel capabilities and continued benefits from Gamestop’s cost and efficiency initiatives. Analysts have consensus estimates calling for $1.80 in EPS and $2.52 billion in revenue for the coming quarter.
Shares of GameStop closed Tuesday at $16.94, in a 52-week range of $2.57 to $19.42. The consensus price target is $8.84. Following the announcement, the stock is down over 9% at $15.37 in the after-hours trading session.