GameStop’s quarterly revenue beats estimates on increased demand for video games

People walk past a GameStop in Manhattan, New York, U.S., December 7, 2021. REUTERS/Andrew Kelly

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June 1 (Reuters) – GameStop Corp (GME.N) reported first-quarter revenue on Wednesday that beat market expectations as the video game retailer pivots to a more web-focused model amid… growing competition from major retailers such as Walmart Inc (WMT.N) and Inc (AMZN.O).

Store closures during the COVID-19 pandemic have affected GameStop’s brick-and-mortar retail business, for which it is primarily known. The company has bolstered its online sales capabilities as shopping trends toward e-commerce have accelerated during the pandemic.

GamStop had launched its digital asset wallet in May to store, send, receive and use cryptocurrencies and non-fungible tokens (NFTs). The wallet could also be used for transactions on GameStop’s NFT marketplace, which is expected to go live later this year.

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Wedbush analyst Michael Pachter called Gamestop’s NFT marketplace announcement “nonsense”, saying it “will have no NFTs for sale and no customers, and the wallets they provide will be empty”.

Pachter added that there was no Q&A session in their earnings calls for several consecutive quarters and there was no opportunity to seek clarification on their product and NFT market strategy. .

GameStop said its inventory in the quarter ended April 30 rose to $917.6 million, from $570.9 million a year earlier, amid increased customer demand and the likelihood of service disruptions. the supply chain.

Sales of software and collectibles contributed more than 50% of total quarterly revenue for the first time since the third quarter of 2020.

GameStop shares soared 687% last year as it was at the center of a battle between retail investors coordinating on online forums and Wall Street hedge funds that had taken short positions in company, in what is called a “short-squeeze”.

The company’s net sales were $1.38 billion in the quarter, above analysts’ average estimate of $1.32 billion, according to Refinitiv data.

The company’s net loss widened to $157.9 million, or $2.08 per share, for the first quarter, from $66.8 million, or $1.01 per share, a year earlier. early.

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Reporting by Akash Sriram in Bangalore; Editing by Krishna Chandra Eluri

Our standards: The Thomson Reuters Trust Principles.

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