GameStop (GME) shattered earnings forecasts for the first quarter and announced new top executives, while the election of a new chairman is expected to bring more changes to the former Redditt favorite. GME shares fell late due to plans to sell more shares.
Estimates: Analysts expect video game retailer Grapevine, Texas, to report a loss of 82 cents a share, compared to a loss of $ 1.61 a year ago, according to FactSet. Revenue increased 14% to $ 1.16 billion, and sales at the same store increased 24%.
Results: Loss of 45 cents per share in revenue of $ 1.28 billion, an increase of 25%, although the number of stores is 12% lower.
The company also said it could sell up to 5 million shares from time to time, such as marketing. GameStop already raised $ 551.7 million from an offer in April.
As of May 1, the company had $ 770.8 million in cash, compared to $ 635 million on January 30.
The income statement is as follows Chewing CHWY co-founder Ryan Cohen takes over as chairman of GameStop. He insisted on speeding up the company’s overhaul of e-commerce, but declined to offer details at Wednesday’s GameStop annual meeting.
“You won’t find us talking about a big game, making a bunch of high promises, or telegraphing our strategy for the race,” Cohen said.
Meanwhile, C-suite’s top executives, including the CEO, are leaving or have already left, and the board has also been upgraded.
But on Wednesday, GameStop appointed Matt Furlong as chief executive and Mike Recupero as chief financial officer. Both have previously worked at Amazon (AMZN). The current CEO, George Sherman, had already announced plans to step down.
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Shares fell 8% late after closing 0.85% today at 302.56 on the stock market. Analysis of the MarketSmith chart shows that GME shares have jumped almost 10-fold since the frenzy of short-squeeze trading released the shares into the stratosphere in January.
Among other stocks of memes. AMC Entertainment (AMC) fell by 10.4%, BlackBerry (BB) losses of 4%, Bed Bath & Beyond (BBBY) fell 6.9% and Kos (KOSS) sold out 7.1%.
But Wedbush analyst Michael Pachter has a low GME stock rating and a 12-month share price of 39.
“The high-profile short pressures and continued enthusiasm of small investors (too, in our opinion) observed in recent months have raised the share price to levels that are completely detached from the basics of the business,” he wrote in a note from clients.
Hours later: GME falls, this leader flashes a buy signal; Basic data on inflation
Return to GameStop?
Still, retail investors remain bullish with GME shares as GameStop tries to return as a global e-retailer. Of course, user preferences for subscription-based games make GameStop’s bundled software and the in-house gaming business less relevant over time.
FactSet data shows that half of GameStop’s sales come from hardware and accessories, while 39% come from software and 11% from collector’s value.
Pahter says GameStop sales of game consoles will continue to lag behind, as new consoles from Microsoft (MS) and Sony (SONY) remain limited in supply, while Switch sales will eventually decline, with Nintendo (NTDOY) has yet to present a successor.
“Potential transformation strategies, illustrated by the company’s new push for indispensable symbols, have silenced this negativity in recent months and may continue to do so in the foreseeable future,” he wrote.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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