Source: Zhitong Finance
Author: Zhao Jinbin
$GameStop (GME.US)$The third quarter earnings report, which fell short of expectations in terms of revenue, was announced. Consumers cut spending amid economic uncertainty, hindering the video game retailer's transition to a more web-based model. As of press release, the stock fell more than 5% after the market.
Financial reports show that the company's Q3 revenue was US$1,078 million, lower than US$1,186 billion in the same period last year and market expectations of US$1,182 billion.
Continued inflation and high borrowing costs have contributed to uneven spending in the gaming industry. Recently, including$Take-Two Interactive Software (TTWO.US)$Both major companies, including, gave disappointing predictions.
According to Gaming Station, net sales in Australia, the US and Canada fell by 16.8%, 13.3% and 9.7%, respectively, while net sales in Europe increased by 12.8% during the same period, mainly due to reduced supply restrictions.
However, the net loss narrowed, from $94.7 million in the same period last year to $3.1 million. The adjusted earnings per share were $0, which was better than analysts' expectations of a loss of 8 cents due to lower costs.
The results are the company's first earnings report since senior investor Ryan Cohen took office as CEO and Chairman at the end of September. The executive strengthened his control over the underprivileged company.
Cohen initially tried to steer gaming stations towards e-commerce, but he later abandoned some plans and relied more on physical stores as places for customers to pick up online orders.
The company also pointed out in its financial report that its board of directors approved a new investment policy on Tuesday, which allows the company to invest in stocks, securities and other investments. The Board of Directors has authorized Chairman and CEO Cohen to manage the portfolio.
The company said its traditional approach is to invest surplus cash in investment-grade short-term yield securities. As of the end of the quarter, the company's cash and cash equivalents were $1,210 million.