GameStop’s stock has often been a story of its own, with its change in price often not matching the store’s performance or the overall market. Well, this time, the stock price’s current movement make sense due to GameStop’s latest financial report.
On March 21st, GameStop revealed its Q4 performance. For the period and fiscal year which ended on January 28th, net sales were slightly lower compared to a year ago: $2.23 billion versus $2.25 billion. A year ago, GameStop lost almost $148 billion to the tune of 49 cents a share. However, in this year’s Q4, GameStop posted a profit of $48 billion or 16 cents a share. This is the first time in two years GameStop has made money in a quarter.
Very few analysts still cover GameStop’s stock, so the few predictions that were out there averaged a loss of about 13 cents per share.
So this unexpected news led to the stock price rising 50% after a recent two-year low.
Collectibles continued to be a high-performing category during the holiday season, but cutting costs was a key factor. GameStop, for instance, has closed all stores in some European countries and will continue to trim its footprint in others. Streamlining and improving the online experience has been another goal of the company’s.
Still, sales for the full fiscal year were down slightly from 2021’s just over $6 billion to $5.9 billion for 2022.
So GameStop still has to make changes beyond trimming administration staff to achieve financial steadiness. The gaming marketplace is still shifting toward digital and mobile, and no new consoles are on the horizon.
But adding more toys is being floated as a possibility to help continue this profit streak.
Still, CEO Matt Furlong, who joined the company in 2021, boasted in a conference call the company is in a better position than before and far from a state where many “predicted we were heading for bankruptcy”.
But there have been some, as CNBC said, “missteps” thanks to GameStop’s crypto and NFT ventures. Crypto value has dropped, and even its supporters note its poor public image. This is in part to brands like FTX, which had a dramatic fall and has lead to its founder being criminally charged. GameStop partnered with FTX only to have to end their association two months later.
Meanwhile, GameStop’s digital marketplace has plateaued and has been “underwhelming”.
I know I wouldn’t be disappointed if this venture fizzled out, and judging by receptions to even, say, Pokémon’s rumored entry into the NFTsphere, I’m not the only one.
Anyway, GameStop recording a profit is good news, but for me personally, I haven’t shopped much at GameStop recently. The jump to $59 for free shipping was a big turn-off for me when I have other free shipping options. Even when I find something I am tempted to purchase, I go searching for things that interest me only to click on them and find that it’s unavailable online or at my local store. The “in stock” filter doesn’t weed these out, which makes it rather useless.
I know I keep complaining about the site, but until they do, I’ll keep whining. Because if investors want the stock to once again go to the moon, the site shouldn’t be driving me (and others) up the wall.