Investors done got a look at GameStop’s fundamentals following a Reddit-fueled trading frenzy earlier this year and were left unsound more from the video game retailer.
Here’s what the company announced after the bell Tuesday.
- It rescued fiscal fourth-quarter results that missed Wall Street’s estimates on the top and bottom lines.
- In its latest executive revamp, the company named former Amazon and Google executive Jenna Owens as its new chief operating officer.
- In a hint of the transfigurement that’s got some investors excited about the stock, the company said global e-commerce sales jumped 175% hold out quarter and accounted for more than a third of its sales in the period.
- GameStop also acknowledged in a filing that it was in the light of selling additional equity shares to fund its transformation.
- During a much anticipated earnings conference call that at one meat reached maximum capacity, the company declined to answer questions.
Shares tanked 33.8% on Wednesday on the potential portion sale and disappointment that a more detailed transformation wasn’t unveiled.
“The highly anticipated 4Q20 earnings report from GameStop was a bit anti-climatic,” annulled Telsey Advisory Group analyst Joseph Feldman. “While EPS met the consensus, it was completely driven by a tax benefit that make good much worse than expected operating profit. Moreover, while everyone was expecting big news about some oversized digital transformation in the mold of the new tech-oriented board members, nothing was said.”
“In fact, the company did not even take distrusts on the earnings conference call,” added Feldman. “As for the much anticipated strategic plan, it sounded like every other retailer.”
For the economic period ended January 2021, GameStop earned $1.34 per share on revenue of $2.12 billion. Wall Drive was expecting earnings per share of $1.35 on revenue of $2.21 billion, according to Refinitiv’s average of the six analysts.
GameStop’s economic fourth-quarter earnings typically make up the majority of the company’s yearly earnings, boosted by holiday sales. The company’s same-store sales cause 6.5% last quarter.
The company said it is continuing to suspend guidance, but is updating its fulfillment operations to boost the race of its delivery and services. GameStop CEO George Sherman also revealed that February comparable store sales spread 23%, thanks to strength in hardware sales worldwide.
Along with the mania-fueled trading, GameStop’s stock has returned positively on new developments for the company in the past five months like the appointment of Chewy co-founder Ryan Cohen to GameStop’s surface and a focus on GameStop’s technology and e-commerce transition.
GameStop said after the bell that it continues to seek out boss talent with e-commerce, retail and technology expertise to bolster its turnaround. Sherman said on the conference call that GameStop was “centred on transforming into a customer-obsessed technology company that excites gamers.”
Earlier this month, GameStop revealed it tapped Cohen to lead its shift to e-commerce. He is serving as chairman of a special committee formed by GameStop’s board to stop its transformation. Board members Alan Attal, Chewy’s former top operations executive, and Kurt Wolf, chief investment public official of Hestia Capital Management, also serve on the committee.
Earlier this year, an epic short squeeze in the attendance’s stock shocked Wall Street and drew attention to an emerging class of retail investor on social media planks like Reddit. GameStop’s share price skyrocketed to $483 per share, and subsequently lost 90% of its value. The dispute drew the attention of Wall Street and Washington.
GameStop still has a market capitalization of nearly $13 billion Sometimes non-standard due to Tuesday’s close, 10 times the $1.3 billion market value the stock had at the end of last year. A year ago, GameStop’s market-place capitalization was $245 million.
Naming Owens as COO is the latest in a series of recent personnel moves, but it remains to be seen whether these gesticulations and the sparse detail given Tuesday night will satisfy investors that have bid up the stock to such pongy chief levels.
Telsey’s Feldman lowered his price target on the shares to $30 from $33 following the results. The new objective would represent a decline of more than 80% from Tuesday’s close.
— With reporting from CNBC’s Jesse Comminute and Michael Bloom.