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United States GameStop Earnings Could Cap Off Solid Year for the Meme Stock
GameStop sales fell from a year ago in the company’s latest quarter, coming in below Wall Street estimates, but the videogame retailer also swung to an unexpected profit.
GameStop reported third-quarter adjusted earnings of 6 cents a share on net sales of $860.3 million. Analysts surveyed by FactSet expected the company to post a loss of 3 cents a share on revenue of $888 million.
Sales...
GameStop sales fell from a year ago in the company’s latest quarter, coming in below Wall Street estimates, but the videogame retailer also swung to an unexpected profit.
GameStop reported third-quarter adjusted earnings of 6 cents a share on net sales of $860.3 million. Analysts surveyed by FactSet expected the company to post a loss of 3 cents a share on revenue of $888 million.
Sales in the latest quarter were down 20% from the year-earlier period, when GameStop reported revenue of $1.08 billion.
GameStop, in its usual fashion, didn’t schedule a news conference or a call with analysts and investors to discuss the results.
After initially falling on the news, shares of GameStop were up 10% in after-hours trading on Tuesday, likely due to the surprise profit. The company reported net income of $17.4 million for the quarter, compared with a net loss of $3.1 million in the same period last year.
GameStop also said that during the quarter, it completed a previously disclosed “at-the-market” equity offering program by selling 20 million shares of its common stock. However, GameStop added that it doesn’t anticipate any more offerings involving its stock during the current fiscal year.
As of the stock market close on Tuesday, shares of the videogame retailer had risen 54% this year and were on pace for their best year since 2021, when they surged 688%, according to Dow Jones Market Data. The S&P 500 is up 27% this year.
What’s behind the jump is news in mid May that meme-stock celebrity Keith Gill, known online as Roaring Kitty, had returned to social media, reinvigorating hope for a trading frenzy like the one that launched the meme-stock phenomenon in 2021. Retailer traders, chatting in online forums, bought up the shares, squeezing short sellers and sending the stock through the roof. GameStop stock jumped 74% on May 13 and 60% on May 14 after Gill’s return raised hope for another short squeeze.
As of Tuesday’s close, the stock had fallen some 43% from its 52-week closing high of $48.75, hit on May 14, as traders and investors balance the possibility of a meme-stock surge against GameStop’s challenges as a business.
Write to Angela Palumbo at angela.palumbo@dowjones.com
