GameStop Corp. (NYSE: GME) released its financial results for the third quarter ended October 30, 2021 after the market closed on Wednesday. Beats estimates on sales but their loss per share on EPS widened with net loss increasing to 8.1%.
GameStop also ended the period with cash and cash equivalents of $1.413 billion as well as no debt other than a $46.2 million low-interest, unsecured term loan associated with the French government’s response to COVID-19.
Key Highlights
- Net sales were $1.297 billion for the quarter, compared to $1.005 billion in the prior year’s third quarter.
- Sales attributable to new and expanded brand relationships, such as Samsung, LG, Razer, Vizio and others, contributed to the Company’s growth in the quarter.
- Inventory was $1.141 billion at the close of the quarter, compared to $861 million at the close of the prior year’s third quarter, reflecting the Company’s focus on front-loading investments in inventory to meet increased customer demand and mitigate supply chain issues.
- Ended the period with cash and cash equivalents of $1.413 billion as well as no debt other than a $46.2 million low-interest, unsecured term loan associated with the French government’s response to COVID-19.
- Established new offices in Seattle, Washington and Boston, Massachusetts, which are technology hubs with established talent markets.
- Secured a new $500 million ABL facility, which closed in November just after the end of the third quarter, with improved liquidity and terms, including reduced borrowing costs, lighter covenants and additional flexibility.
Actual vs Analysts Estimate
EPS: -$1.39 vs -$0.52 per share
Revenue: $1.297 billion vs $1.2 billion.
Earnings Call
Statement of operations:
Earnings History
GameStop Corp. last released its quarterly earnings report on September 8th, 2021. The ‘meme stock’ firm recorded net sales of $1.183 billion for a cost of $862.5 million in the third quarter, up from $942 million for a cost of sales of $689.8 million a year ago, a 25.58 percent increase.
However, the company reported a net loss of $61.6 million in the second quarter, compared to a loss of $111.3 million the previous year, a 44.65% decrease. It also spent $378.9 million on costs, up from $348.2 in the last quarter. The corporation’s gross profit was $320.9 million, compared to $85.6 million the year before.
From $85.6 million in Q2 2020, the initial operating deficit fell to $58.0 million in Q1 2021. It had $1.78 billion in cash and restricted cash at the end of the second quarter and no long-term debt other than a $47.5 million low-interest loan related to the French government’s pandemic response.
According to last quarter’s reports, the company also engaged in long-term growth strategies such as extending its product library, strengthening its fulfillment network capabilities and technology, and increasing people across the organization.
Annual Forecasts
According to Zacks, three analysts forecasted a $-0.27 EPS prediction for the fiscal year 2022. In the current quarter, the company is anticipated to expand at a pace of 1.90 percent, while in the next quarter, it is expected to grow at a rate of –20.90 percent.
GameStop Corp’s EBIT (Earnings Before Interest and Taxes) is predicted to drop significantly in recent years.
Future Plans
The company has stated that it intends to invest in e-commerce fulfillment and customer service. Chewy (CHWY), the pet supply company Cohen co-founded, outsmarted Amazon.com (AMZN) in that market, in part to its excellent customer service. Microsoft has also announced a multi-year strategic relationship.
GameStop is planning to develop a metaverse similar to what Facebook (now Metaverse) has stated after a year of climbing stock prices and settling downs.
Company Profile
GameStop is a video game, consumer electronics, and gaming merchandise retailer based in the United States.
GME’s stock has risen more than 1500% year to date, and it is presently trading at
On June 9th, just before the business released fiscal first-quarter results, the stock hit a six-month high of $302.56. Its lowest closing price over that time was $146.80 on August 4th.
