Retail investors took all of Wall Street by storm a couple of years ago. Coordinated from Reddit to knock out the bears, who make money when the shares fall, they began to buy and hold the titles of companies with more short investors, triggering the valuations of companies in crisis or with little future. The most iconic was Gamestop.
Today he refocuses the spotlight. The company earned 40% on the stock market after the market closed when announcing a return to profit two years later. Profits amounted to 48.2 million dollars -45 million euros- in its last fiscal quarter, between November and January, for the 148 million lost in the previous year.
The figures are achieved with better efficiency, since sales fell 1.2%, to 2,230 million dollars in the quarter, some 2,070 million euros. Despite the decline, they were above analysts' forecasts.
“GameStop is a much healthier business today than it was at the start of 2021,” CEO Matt Furlong said on a call with analysts. “We have a path to profitability for the full year,” he said. In any case, the company did not offer a perspective for 2023.
The store chain has struggled to return to profitability in recent years, as sales of physical games have given way to digital downloads. Added to that are difficulties in the console supply chain and a somewhat less attractive release schedule last year. According to the market analyst NDP Group, video game sales fell by 5% in 2022 in the US.
Hence, secondary businesses have more and more weight. GameStop saw the sale of collectibles grow by 12%, to 313 million dollars or 290 million euros. Sales of hardware and accessories also rose 5% to 1,240 million dollars -1,150 million euros. Those of software fell 15%, to 670 million dollars or 620 million euros.
At the head of the group is the activist investor Ryan Cohen, president since 2021, who after taking the reins decided to fire the financial manager and announce layoffs.
