GameStop retailer reported mixed third-quarter earnings, showing a larger-than-expected quarterly loss and sales that were above estimates.
The company lost $105.4 million, or $1.39 a share, in the quarter ended Oct. 30, compared with a loss of $19 million, or $0.29 a share, in the year-ago period. Analysts had expected a loss of $0.52.
Inventory was $1.141 billion at the close of the quarter, compared to $861 million at the close of the prior year’s third quarter. GameStop said the increase reflected its focus on “front-loading investments “in inventory to meet increased customer demand and mitigate supply chain issues.”
Sales increased to $1.3 billion from $1 billion, topping estimates of $1.19 billion. The retailer attributed the rise partially to "new and expanded brand relationships," including Samsung and LG.
In June, 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. The company noted that during the quarter it established new offices in Seattle, Washington and Boston, Massachusetts, “which are technology hubs with established talent markets.”
On the company's earnings call, Furlong said that GameStop has hired more than 200 senior employees from top technology companies. It also has expanded its merchandise offerings, including more personal computing gaming items.
GameStop ended the period with cash and cash equivalents of $1.413 billion as well as no debt other than a $46.2 million low-interest, unsecured term loan associated with the French government’s response to COVID-19.