SAN RAFAEL, CALIFORNIA – DECEMBER 08: Customers enter a GameStop store on December 08, 2021 in San Rafael, California. Video game retailer GameStop will report third-quarter earnings after the close today. (Photo by Justin Sullivan/Getty Images)
Justin Sullivan | Getty Images News | Good pictures
Stop the game It said on Wednesday that quarterly sales fell and losses widened as it ran up cash and inventory.
Also released by the company A new partnership Crypto exchange with FTX.
Shares of the company rose about 10% in after-hours trading.
In the second fiscal quarter ended July 30, the video game retailer’s total sales fell to $1.14 billion from $1.18 billion. Its loss widened to $108.7 million, or 36 cents a share, compared with a loss of $61.6 million, or 21 cents a year earlier.
GameStop’s results cannot be compared to estimates because so few analysts cover the company.
Inventory rose to $734.8 million at the end of the quarter. This was up from $596.4 million at the end of the second quarter of the previous year. The company said in a release that it has deliberately increased inventory to keep up with customer demand and address supply chain challenges.
The retailer has spent significantly on new initiatives, including NFTs. That’s $908.9 million in cash and cash equivalents at the end of the quarter — slightly more than at the end of the previous year.
The company did not provide an overview. It has not issued guidance since the pandemic began.
A traditional brick-and-mortar video game retailer is trying to transition its business into the digital world. It has new leadership, including its founding board chairman Ryan Cohen chewing and former activist investor Bed Bath & Beyondand its CEO Matt Furlong, an Amazon senior
But GameStop struggled to turn a profit, leading it to cut costs and shake up leadership. Last month, the company fired its chief financial officer, Mike Regubero It laid off employees across departments. Head of Accounting, Diana Jaje, has taken over as the company’s new CFO.
The company’s expenses fell 14% from the first quarter of the year, reflecting those layoffs.
GameStop has found new ways to make money. It is Launched the NFT market in July. which Open to the public for beta testing. It allows users to connect their own digital asset wallets, including the recently launched GameStop Wallet, so they can buy, sell and trade NFTs for virtual goods.
As overall sales fell, the retailer pointed to the growth of some new businesses. It rose from $177.2 million in the second quarter of the previous year to $223.2 million in the most recent quarter.
NFTs trade on FTX, the retailer’s new partner. “In addition to collaborating with FTX on new e-commerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores,” GameStop said in a release.
FTX was founded by a millionaire Wall Street trader Sam Bankman-Fried creates30. He has become a lender of last resort to struggling crypto firms as assets have dwindled sharply since late last year.
The deal with FTX seems to play into GameStop’s status as a meme stock.
The company’s shares have seen sharp fluctuations in value. Over the past year, shares have moved from $19.39 to $63.92. Shares of the company are down about 36% so far this year, bringing the company’s value to $7.31 billion.
Read GameStop’s earnings release Here.
This is a growing story. Check back for updates.
“Lifelong social media lover. Falls down a lot. Creator. Devoted food aficionado. Explorer. Typical troublemaker.”