GameStop reported Wednesday that its fiscal third-quarter sales fell, and its cash pile shrank sharply as the brick-and-mortar retailer worked to expand its digital presence.
GameStop’s total sales in the third fiscal quarter, which ended Oct. 29, were roughly $1.2 billion, down from $1.3 billion in the same period last year. The company’s cash equivalents also fell to nearly $804 million from around $1.4 billion the previous year.
The company’s stock rose nearly 3% in after-hours Wednesday after falling 4.8% during the regular session.
After what executives have described as years of underinvestment, GameStop has been working to become profitable also revamp its brick-and-mortar retail business. In recent months, the retailer has changed leadership and shifted its focus to initiatives to help it further establish itself in the digital world.
On a conference call with investors on Wednesday, GameStop CEO Matthew Furlong stated that the company “is attempting to accomplish something unprecedented in retail… seeking to transform a legacy business that was once on the verge of bankruptcy.”The company reported a net loss of nearly $95 million, a slight improvement from the same period last year’s loss of about $105 million.
Furlong added that the company has been working to strengthen its balance sheet and cushion its cash position to be in a place to pursue acquisitions of complementary businesses. The CEO also stated that the company would continue to cut costs, with layoffs in the second half of 2022.
Because so few analysts cover GameStop, its results cannot be compared to estimates.
GameStop did not provide a financial outlook, as it has done in previous quarters since the outbreak began.
The retailer’s inventory on its balance sheet remained high: $1.13 billion at the end of the quarter, down from $1.14 billion at the same time last year. GameStop, like other retailers, has been dealing with a backlog of inventory after intentionally stockpiling to meet increased customer demand and supply chain issues.
The company, also known as a meme stock, has been adapting its operations to a digital world.
