Shares of Gamestop Corp. ticked lower on Thursday’s extended trading as it swung to a loss in the holiday quarter.
The American video game retailer declined 8.04% or 7.05 points to $80.65 per share. It reversed a gain of 0.97% or 0.84 points to $87.70 per share during the regular hours market.
The downward movement slashed $535.45 million to the company’s market valuation.
Accordingly, Gamestop’s net loss was $147.50 million or $1.94 per share during the quarter. A year earlier, the company posted a profit of $80.50 million or $1.19 per share.
The holiday season is usually a strong one for the company, with the launch of Xboxes and Playstations and high demand.
Nevertheless, the firm explained that the significant drop is part of its transformational game plan.
Gamestop CEO Matt Furlong emphasized that the management plays the long game rather than targeting short-term profits.
Like many other retailers, he also noted that supply chain issues and the omicron variant hurt holidays’ earnings.
Nevertheless, Furlong stated that the company decided to lean in and absorb higher costs to meet customer demands.
The firm continuously strengthens relationships with gaming brands, including Alienware, Corsair, and Lenovo.
At the same time, it looks for new ways to make money. Its latest move includes the launch of a new marketplace for nonfungible tokens (NFTs) by the end of the second quarter.
The business also unveiled a redesigned app and hired dozens of people with experience in e-commerce, operations, and blockchain gaming.
GameStop’s share price has swung wildly over the past year. Its stock touched a 52-week low of $77.58 on Monday, one-fourth lower from its value last June.
Before Thursday’s after-hours, the firm declined 42.62% or 65.14 so far this year.
Gamestop delivers upbeat sales
Correspondingly, the surprise quarterly loss overshadowed the upbeat net sales of the company. It increased 6.20% to $1.88 billion, beyond expectations of $2.16 billion.
GameStop’s PowerUp Rewards Pro climbed by 32.00% on a year-over-year basis. The membership program currently has 5.80 million members.
Meanwhile, the firm has not released a financial outlook since the pandemic began in March 2020.
Earlier, GameStop was a target in the meme stock frenzy, benefitting its stock. It also got a fresh slate of executives who want to transform the brick-and-mortar chain into an e-commerce player.
For instance, Chewy co-founder Ryan Cohen led the company’s turnaround as chair of the board.
Subsequently, he hired former Amazon executives Furlong, and Mike Recupero, as CEO and CFO, respectively.
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