GameStop narrows loss, sales up 25%; new execs take no questions during call
GameStop Corp. narrowed its Q2 loss and reported sales that topped estimates. But its earnings fell short and the company’s new leadership took no questions during its earnings conference call.
It was the first earnings call since Matthew Furlong took the reins as CEO and Mike Recupero was named CFO as part of activist investor and now-chairman Ryan Cohen’s plans to transform the company by focusing more on e-commerce and online gaming. Furlong and Recupero are both former Amazon executives.
[Read More: GameStop to name Chewy co-founder Ryan Cohen as chairman]
Furlong read from a release during the short call and promised that the company's mission was still to "delight customers" and deliver value to long-term shareholders. He also said that net sales remains the ultimate barometer of GameStop’s financial performance for investors.
The videogaming retailer posted a net loss of $61.6 million, or $0.85 a share, for the quarter ended July 31, compared with a net loss of $111.3 million, or $1.71 a share, in the year-ago period. The adjusted net loss was $55 million, or $0.76 a share. Analysts expected a net loss of $0.67.
Revenue rose 26% to $1.18 billion from $942 million. Analysts had expected sales of $1.12 billion. The company credited the increase to the demand for new consoles from Sony and Microsoft continuing from last year and continued sell-through of Nintendo products.
In line with its e-commerce push, GameStop has entered into a lease for a new 530,000-sq.-ft. fulfillment center in Reno, Nev., positioning the company’s fulfillment network to span both coasts of the continental United States. It also signed a lease for a new customer care center, in Pembroke Pines, Fla.
The retailer also said the U.S. Securities and Exchange Commission has requested additional documents for its ongoing probe into GameStop and other companies' trading activity. GameStop said the inquiry is not expected to negatively impact the company.
[Read More: GameStop narrows loss; names CEO; discloses SEC probe]