GameStop earnings roundup
- GameStop reported an increase of 25% in net sales for fiscal 2020 first quarter.
- It also announced the appointment of the former Amazon executive Matt Furlong as chief executive officer.
- Analyst says 'You can hire anyone you want from Amazon — not going to make a difference.'
GameStop Corp. (NYSE: GME) announced the results of its first-quarter yesterday and reported a 25% increase in sales. In another major announcement the company has appointed a former Amazon executive as its CEO as it looks to transition away from a bricks-mortar business model.
Shares of GameStop are up more than 14 times this year swinging wildly between a 52-week low of $3.77 and a 52-week high of $483. The stock is down 10% this morning and trading at around $272. GameStop rally has been fueled by Reddit board WallStreetBets and is one of the favourite meme stocks since the start of the year.
Latest quarterly results
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GameStop reported earnings for the first quarter of fiscal year 2021 ending on May 1 after the market closed yesterday. Company’s net sales increased by 25% from $1.02 billion in the fiscal 2020 first quarter to $1.28 billion in the last quarter, which was also higher than the street expectations of $1.16 billion.
The company reported an adjusted loss per share of 45 cents vs. analyst expectations of 84 cents.
The retailer did not provide an outlook for the year and reported that it has filed with SEC to sell 5 million shares of the company in addition to the 3.5 million shares it sold in the previous quarter.
Analyst’s opinion on GameStop
Anthony Chukumba, managing director at Loop Capital, was on CNBC to discuss GameStop’s appointment of a new CEO and its future prospects.
GameStop announced the appointments of Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer. Both of them are former Amazon executives.
While discussing the appointments, Chukumba said:
“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce.”
He further added that the company’s problem is not that they’re not a good omnichannel retailer but that the gamers are increasingly downloading video games.”
Doubling down on his criticism of the company, Chukumba said:
“Look, they can hire Jeff Bezos when he comes back from space. … It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”