What’s happening with GameStop? The retailer’s stock price is on the rise after surprise profit
It’s game on for GameStop shares this morning. As of the time of this writing, GME stock is up over 51% in premarket trading, taking the share price to $26.70—its highest point since November 2022.
The reason? On Tuesday, GameStop posted a quarterly profit for the first time in two years. And it was for the all-important holiday quarter in which investors had hoped that parents would rush out to GameStop locations to get presents for under the tree.
But it doesn’t seem that scenario played out as much as hoped, given net sales were actually down year-over-year in Q4 2022 to $2.226 billion (from $2.254 billion a year before). However, net income was actually up year-over-year. During the quarter, GameStop’s income reached $48.2 million. The rising profits were helped in part by lowering expenses.
And sure, $48.2 million is a pittance for many larger companies, but a year earlier, GameStop had seen a Q4 net loss of $147.5 million. In other words, the company turned things around massively when comparing its holiday 2022 and holiday 2021 quarters.
As CNBC reports, GameStop CEO Matt Furlong said on the company’s financial call that he is continuing with plans to cut costs at GameStop. Furlong, an Amazon veteran, also said GameStop may move into becoming a toy store of sorts. The company is considering stocking toys and other high-margin products in its stores.
While today’s surge will be very welcome news to GME loyalists, GameStop stock has plummeted since its heyday of being a meme stock in the early pandemic years, when retail investors banded together on platforms such as Reddit’s WallStreetBets to push certain stocks skyward. Back in January 2021, the stock briefly hit a high of $120.75, according to data from Yahoo Finance.
Since then, the stock price has plummeted as meme stocks have gone out of fashion. However, the company’s latest quarterly profit shows that it’s not game over for the company yet.
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