GameStop posted net income for the fourth quarter.
GameStop Corp. posted its first quarterly profit in two years even as its sales slipped.
The video game and electronics retailer reported net income of $48.2 million for the quarter ending Jan. 28, 2023, compared to a net loss of $2.25 billion in the same quarter a year earlier. Earnings per share were $0.16, compared to a loss per share of $0.49. GameStop achieved this turnaround in profitability as net sales slipped year-over-year to $2.22 billion from $2.25 billion.
However, despite the small decline in sales, GameStop was able to achieve a substantial reduction in inventory. The retailer reported $682.9 million in inventory at the close of the quarter, compared to $915 million at the close of the prior year's fourth quarter, which it said reflects the company’s ongoing focus on maintaining a healthy inventory position.
In addition, GameStop reduced selling, general and administrative (“SG&A”) expenses to $453.4 million, or 20.4% of sales, from $538.9 million, or 23.9% of sales, in the prior year's fourth quarter.
GameStop shrinks net loss in FY 2022
GameStop also reported results for the full fiscal year 2022, ending Jan. 28, 2023. The retailer was able to reduce its net loss year-over-year to $313.1 million from $381.3 million. Loss per share dropped to $1.03 from $1.31.
However, net sales also dropped 1% to $5.92 billion from $6.01 billion the prior fiscal year. During the fiscal year, GameStop said it increased full-year sales in the collectibles category, an area in which the company continues prioritizing long-term growth.
GameStop said it also completed the majority of implementations and upgrades related to its infrastructure, systems, shipping capabilities, and online and mobile platforms; and initiated cost-cutting initiatives and headcount reductions over the course of the year in an effort to increase operational efficiency
GameStop enters cryptocurrency partnership
In fall 2022, the retailer entered into a partnership with cryptocurrency exchange FTX U.S. According to GameStop, the partnership is intended to introduce more of its customers to FTX’s community and its marketplaces for digital assets.
In addition to collaborating with FTX on new e-commerce and online marketing initiatives, GameStop is carrying FTX gift cards in select stores. During the term of the partnership, GameStop will be FTX’s preferred retail partner in the United States.
GameStop’s cryptocurrency initiative follows its July 2022 launch of a beta version of an online platform where consumers and creators can buy, sell and trade NFTs. The marketplace also allows users to connect to their own digital asset wallets such as the recently launched GameStop Wallet. Over time, GameStop says its NFT marketplace will expand functionality to encompass additional categories such as Web3 gaming, more creators, and other Ethereum environments.