GameStop Reports Widening Loss for the Third Quarter Sending Shares Falling

Shares of video game retailer GameStop were dropping this week after the company reported widening losses in the third quarter.

The company’s net loss grew to $105.4 million, or $1.39 per share, from a loss of $18.8 million, or 29 cents per share, a year earlier. Total revenue grew to $1.30 billion from $1.00 billion a year earlier.

Shares were down about 4% in after-hours trading on Wednesday after Wall Street digested the report.

The company said its sales grew as it expanded relationships with brands, including Samsung, LG, Razer and Vizio.

GameStop’s inventories had also grown to get ahead of supply chain challenges and be well-stocked for the holidays. At the close of the quarter, inventory was $1.14 billion, compared with $861 million at the same time last year.

The company has enlisted Chewy co-founder Ryan Cohen to lead the company’s turnaround as chairman on the company’s board. Cohen has hired former Amazon executives, Matthew Furlong, and Mike Recupero, as CEO and COO, respectively.

GameStop said it has opened new offices in Seattle and Boston to draw talent in the tech hubs. It said it also secured a $500 million asset-based lending credit facility in November to help with liquidity and reduce borrowing costs.

Furlong said this week that the company has hired more than 200 senior employees from some top technology companies and expanded merchandise, such as adding more personal computing gaming items across about 60% of its U.S. locations. He said the company is committed to improving customer service and delivering goods faster.

“We continue to see a customer-first culture taking hold throughout our stores, fulfillment centers and corporate offices,” Furlong said on the call. “Maintaining this emphasis on the customer will remain key as we work to grow across categories and new areas.”

He added that the company is “exploring emerging opportunities,” including blockchain, NFTs and web 3.0 Gaming.

“Focus on the long term means we will continuously prioritize growth and market leadership over short-term margins,” he said.

GameStop shares are up over 800% this year.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.