GameStop shares surge as videogame retailer posts surprise profit
FILE PHOTO: A screen displays the logo and trading information for GameStop on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 29, 2022. REUTERS/Brendan McDermid
:GameStop Corp posted a surprise profit for the fourth quarter and surpassed revenue expectations as the videogame retailer trimmed costs and reduced headcount, sending its shares more than 32 per cent higher in extended trading.
The company has been shoring up its online sales capabilities in a bid to transform into a digital behemoth from its current mainstay of brick-and-mortar stores.
GameStop has also been targeting profitability by reining in expenses and focusing on higher-margin collectibles and pre-owned product categories. Its selling, general and administrative costs fell by about 16 per cent in the quarter.
The retailer posted an adjusted profit of 16 cents per share, compared with Wall Street expectations for a loss of 13 cents.
The stock, which is popular among retail investors, lost about half its value last year and has declined 4 per cent so far this year.
Net profit for the quarter ended Jan. 31, GameStop's first in eight quarters, was $48.2 million, compared with a loss of $147.50 million a year earlier.
It reported quarterly revenue of $2.23 billion, compared with analysts' average estimates of $2.18 billion, according to Refinitiv.
