GameStop Corp. ‘s share was troubled on Tuesday as the video game retailer said in the midst of the so-called meme stock phenomenon that it had laid the groundwork for its “transformation” and reported lower-than-expected adjusted earnings for the fourth quarter. and sales.
GameStop GME,
the shares initially rose more than 8% after the report, but later made a profit, and last 3% lower. According to the retailer, it earned $ 80.5 million, or $ 1.19 per share, in the quarter compared to 32 cents a share in the previous quarter.
Adjusted for one-time items, GameStop earned $ 90.7 million, or $ 1.34 per share, compared to $ 1.27 per share a year ago.
Sales fell to $ 2.12 billion, compared to $ 2.19 billion in the fiscal fourth quarter of 2019, reflecting the closure of the stores related to the pandemic.
Analysts surveyed by FactSet expected the video game retailer to report adjusted earnings of $ 1.35 per share on sales of $ 2.21 billion.
GameStop said sales of the same stores rose 6.5% in the quarter, with 175% online sales for the quarter and 191% for fiscal 2020. Analysts polled by FactSet expected the same stores’ sales to rise 4.7% in the quarter.
The company said it had “strengthened” its balance sheet and ended the year with $ 635 million in cash, which laid the foundation for transformation. ‘
In a separate press release, GameStop said it has appointed Jenna Owens as chief operating officer, with a start date of Monday, March 29th. Owens was a director and distribution manager at Amazon.com Inc. AMZN,
The company also named Neda Pacifico, who is a manager at Chewy Inc. CHWY was,
as senior vice president of e-commerce. Pacifico also begins Monday.
Tough co-founder Ryan Cohen and two of his allies joined GameStop’s board earlier this year, leading to hopes he would undertake a facelift.
GameStop’s stock is often cited as one of the memo stocks that have soared in recent months, thanks to the fierce boost of Reddit comments and social media posts.
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Shares in GameStop have risen more than 800% over the past three months, compared to rising by about 7% for the S&P 500 index SPX,