Wednesday

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<p class="has-drop-cap">GameStop shares jumped on Wednesday after the video game retailer <a href="https://news.gamestop.com/news-releases/news-release-details/gamestop-reports-fourth-quarter-and-fiscal-year-2022-results" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">posted</a> a quarterly profit for the first time in two years. The company also reported a surge in sales above Wall Street expectations, with its CEO claiming GameStop is in a &#8220;much healthier&#8221; business position compared to the start of 2021.</p>



<h3 id="gamestop-earned-48-2m-in-q4-2022">GameStop Earned $48.2M in Q4 2022</h3>



<p>On Tuesday, GameStop posted its earnings report for the latest quarter of 2022. The company reported a quarterly profit after two years of earnings in the red, finishing its latest fiscal year on a high note thanks to the holiday season.</p>



<p>More specifically, the video game retailer reported a $48.2 million net profit in Q4 2022, compared to a net loss of $147.5 million in Q4 2021. The company&#8217;s net sales dropped slightly to $2.23 billion<strong>&nbsp;</strong>from $2.25 billion<strong>&nbsp;</strong>in last year’s fourth quarter.</p>



<p>The company posted an adjusted profit of 16 cents per share for Q4 2022, beating Wall Street expectations of negative 13 cents. The surprise profit led to a sharp jump in GEM shares, which gained 48% in Tuesday&#8217;s extended session.</p>



<p>Moreover, GameStop shares closed Wednesday up by 35.24%, trading at $23.87 per share. The recent rally has also helped the video game retailer bring its year-to-date (YTD) performance to <a href="https://www.ytdreturn.com/gme/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">29.31%</a>. </p>



<p>GameStop has been working to steer itself back to profitability by cutting costs. The company has reportedly launched a series of corporate layoffs to reach its profitability and growth goals.</p>



<p>Courtesy of such measures to cut costs, selling, general and administrative expenses came in at $453.4 million for the latest quarter of 2022 or 20.4% of sales. In comparison, expenditures were $538.9 million, or 23.9% of sales, in the year-earlier period.</p>


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<h3 id="ceo-says-gamestop-is-much-healthier-now">CEO Says GameStop is Much Healthier Now</h3>



<p>GameStop CEO Matt Furlong said at the company’s investor call after the results that the company is &#8220;a much healthier business today than it was at the start of 2021.&#8221;&nbsp;</p>



<p>He added that the company is “aggressively focused on year-over-year profitability improvement while still pursuing pragmatic long-term growth.” This includes further cuts, particularly in its European markets, where it has already been reducing its number of retail stores.&nbsp;</p>



<p>The video game retailer also reduced its inventory to $682.9 million at the close of the quarter, compared with $915 million at the close of the fourth quarter of 2022. That reflected its “ongoing focus on maintaining a healthy inventory position,” Furlong said.</p>



<p>However, the <a href="https://tokenist.com/the-sec-has-referred-to-gme-amc-as-meme-stocks-in-legal-documents/" rel="dofollow" class="deco-link">one-time meme stock</a> might have difficulty returning to profitability, considering the ongoing decline in used-game sales. One GameStop manager recently <a href="https://www.dailydot.com/irl/gamestop-corporate-layoffs/" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">claimed</a> that the retail chain is not performing well. “No one comes in anymore,&#8221; the manager said. </p>



<p>In response, GameStop is closing stores and moving beyond video games as it attempts a turnaround. Specifically, the company has <a href="https://tokenist.com/gamestops-nft-marketplace-fails-to-impress-on-launch-but-can-it-spur-mainstream-adoption/" rel="dofollow" class="deco-link">launched an NFT marketplace</a> and a suite of Web3 tools to digitize its business further.</p>



<p>Nevertheless, the GameStop stock is currently down 2.35% in pre-market trading. </p>


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<p><strong><em>Do you think GameStop will remain profitable this year? Let us know in the comments below.&nbsp;</em></strong></p>
<p>The post <a rel="nofollow" href="https://tokenist.com/ceo-says-gamestop-is-a-much-healthier-business-today-as-shares-up-29-ytd/">CEO Says GameStop is a &#8220;Much Healthier Business&#8221; Today as Shares Up 29% YTD</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

CEO Says GameStop is a “Much Healthier Business” Today as Shares Up 29% YTD

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