New York (CNN Business)After a wild few weeks in the spotlight, GameStop’s financial results for the three months ended January 30 fell somewhat short of Wall Street expectations.
GameStop (GME) on Tuesday reported net sales of $2.1 billion during the quarter, down 3% from the same period in the prior year and slightly below the $2.2 billion Wall Street analysts had expected, according to Refinitiv. Net income from the quarter hit $80.5 million, or $1.19 per diluted share — well below analysts’ projections but a significant improvement from the $21 million in net income it earned during its fiscal fourth quarter last year. One bright spot: The gaming retailer’s global e-commerce sales increased 175% and represented 34% of the company’s total net revenue during the quarter. During the same period last year, e-commerce made up just 12% of total sales. That bodes well for the company’s effort to transition to relying more on online sales.
The company’s stock rose more than 5% in after-hours trading following the release.
The Tuesday earnings report is the first since a Reddit-fueled trading frenzy in late January took Gamestop’s stock on a rollercoaster ride — and exposed a stark divide between investors betting that the struggling retailer’s performance will worsen and those counting on a comeback.Read MoreThe company’s stock quickly fell from its wild peaks during the January rally, but many investors haven’t given up just yet. On Tuesday, GameStop shares closed down nearly 7% at $181.75, but were still more than 850% higher than where they started this year.The earnings report also comes in the midst of an executive shakeup at GameStop that’s likely the work of Ryan Cohen, the billionaire Chewy.com founder who invested heavily in GameStop last year and joined its board in January. Many investors hope Cohen will help make the gaming retailer a more formidable competitor in the e-commerce age.
GameStop CFO resigns a month after the Reddit trading frenzy
In early February, GameStop appointed Matt Francis, a former engineering leader at Amazon Web Services, as its first-ever chief technology officer to oversee “e-commerce and technology functions.” Weeks later, the company announced the resignation of Chief Financial Officer Jim Bell and said it would seek a new finance leader with the “capabilities and qualifications to help accelerate GameStop’s transformation.” On Sunday, the company said its Chief Customer Officer Frank Hamlin will also leave the firm at the end of March, according to a notice filed with the Securities and Exchange Commission.
Source: edition.cnn.com