Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
GameStop is committing to amassing more gains following the latest quarterly profit.
For the first time in two years, electronics retailer GameStop (NYSE: GME) posted a quarterly profit, making the company end its fiscal year on solid ground. As the remarkable feat of quarterly profit hit the news, shares of GameStop surged over 48% in after-hours trading. The company trades at $26.20, following a close of $17.65. It appears the electronic retail company is about to experience a positive turnaround after frequently amassing declines over the past year. The record shows that GameStop has lost nearly 43% in the last twelve months before it could finally boast of a quarterly profit for the first time in 48 months.
GameStop Posts Quarterly Profit after 48 Months
Announcing the long-awaited quarterly profit, GameStop posted a profit of $48.2 million, or 16 cents per share. Meanwhile, the company had a loss of $147.5 million or 49 cents in the previous year. The gaming merchandise retailer reported $2.226 billion in net sales, compared to $2.254 billion in the Q4 of the previous year. At the same time, selling, general and administrative costs $453.4 million. GameStop explained that SG&A expenses were 20.4% of sales compared to $538.9 million or 23.9% in the fourth quarter or 2021.
In addition to the quarterly profits, GameStop released its financial overview for the full fiscal year that ended January 28, 2023. It reported $5.927 for generated net sales in comparison to the $6.011 billion realized in FY 2021. There was also an increase in the full-year sales in the collectibles category. Despite recording a quarterly profit, GameStop did not provide financial guidance as usual. The company has stopped predicting its financial performance since the early days of the coronavirus pandemic.
Furthermore, GameStop has been cutting costs to drive profitability. It announced a headcount reduction in July 2022 and fired its chief financial officer, Mike Recupero. This has become a common practice for many companies as they strive to keep their businesses alive. As for the electronic retailer, it dismissed an unspecified number of employees to ”keep things simple and operate numbly with the right talent in place.” Someone familiar with the matter told CNBC that CF was forced to leave because “he was not the right culture fit” for the role. The source added that Recupero was ‘too hands off.’
GameStop is committing to amassing more gains following the latest quarterly profit. The company’s CEO, Matt Furlong, told investors the retailer wants to use excess costs in 2023. He also mentored plans to boost business with higher margin categories like toys. Except for an increase above 4% in the last five days, GME has been down since the beginning of the year.