GameStop (GME) 3rd quarter 2021 profit
A person wearing a protective mask leaves a GameStop Corp. store on Thursday, April 22, 2021. at a mall in San Diego, California.
Bing Guan | Bloomberg | Getty Images
GameStop stock fell more than 5% in expanded trading on Wednesday after the video game retailer reported that its losses widened in the third quarter of fiscal.
The video game retailer reported that its net loss rose to $ 105.4 million, or $ 1.39 per share, from a loss of $ 18.8 million, or 29 cents per share, last year.
At least some of these losses come from stock increases. GameStop said in a press release that it increased inventory levels to $ 1.141 billion at the end of the quarter, compared to $ 861 million at the end of the same period last year, in preparation for the holidays and addressing supply chain challenges.
Total revenue increased to $ 1.30 billion from $ 1.00 billion a year earlier. The company said its sales increased as it expanded relationships with brands like Samsung, LG, Razer, and Vizio.
GameStop is one of the companies that has received new attention from investors thanks to Reddit posts and the meme-share frenzy. The company’s stocks have skyrocketed along with other meme stocks like AMC and Bed Bath & Beyond. This drew the attention of the US Securities and Exchange Commission and prompted the regulator to request documents about the trading activities.
As GameStop tries to evolve from a brick and mortar chain to an e-commerce retailer, it has tapped a number of new market leaders. It hired Chewy co-founder Ryan Cohen to lead the company’s turnaround as chairman of the company’s board of directors. He shook up top management by hiring former Amazon executives Matthew Furlong and Mike Recupero as CEO and COO, respectively.
The Grapevine, Texas-based company has said it has opened new offices in Seattle and Boston to attract talent to its technology centers. It said it also secured a $ 500 million asset-based loan credit facility in November to help improve liquidity and reduce borrowing costs.
At the close of trading on Wednesday, GameStop shares were up 825% this year. The stock closed at $ 173.65 on Wednesday, down 2.34%. The company’s market value is $ 13.28 billion.
Read the company’s press release here.
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