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GameStop reports 1Q loss, but says progress made as it awaits new consoles

GameStop: Fiscal 1Q Earnings Snapshot

GRAPEVINE, Texas (AP) _ GameStop Corp. (GME) on Tuesday reported a fiscal first-quarter loss of $165.7 million, after reporting a profit in the same period a year earlier.

The Grapevine-based company said it had a loss of $2.57 per share. Losses, adjusted for non-recurring costs and asset impairment costs, were $1.61 per share.

The video game retailer posted revenue of $1.02 billion in the period.

In the final minutes of trading on Tuesday, the company’s shares hit $4.94. A year ago, they were trading at $5.44. In trading early Wednesday, shares were up, trading at $5.38.

In March the retailer temporarily closed all 3,526 of its U.S. locations – with approximately 65% of these locations offering limited curbside pickup. During the final six weeks of the quarter, approximately 90% of the global store fleet was closed to customers, with about 42% open for limited curbside delivery and 48% fully closed.
GameStop said it had approximately 85% of its U.S. locations open at the end of last month, with limited customer access or curbside delivery. About 90% of its international locations opened in May. However, the company said it has since had to temporarily close approximately 100 U.S. stores due to nationwide protests. It anticipates keeping about 35 of those locations closed for the foreseeable future given extensive physical damage.

George Sherman, GameStop’s chief executive officer said, “During this unprecedented time, our priority is focused on ensuring the safety and well-being of our employees, customers and business partners as we continue the process of opening our stores as restrictions are lifted, in our ongoing effort to meet our customers’ needs.”

Sherman said the company felt they did a good job in handling changing market conditions.

“While we delivered a loss for the quarter in total, our performance included total sales just shy of our original expectations, even as stores closed due to the COVID-19 pandemic and key video game titles shifted to the second and third quarters, exacerbating the headwind from operating in the final stage of a console cycle,” he said.

Sherman noted e-commerce sales grew 519% in the first quarter and over 1,000% during the six weeks during which stores were closed.

“We believe this reflects the loyalty of the GameStop customer and the confidence they place in us as their preferred place to shop,” he said.

Sherman noted the company has continued to move forward on strategic initiatives.

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This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on GME at https://www.zacks.com/ap/GME

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