GameStop rides on online pivot, videogame demand to beat estimates By Reuters

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GameStop rides on online pivot, videogame demand to beat estimates

Published Sep 07, 2023 06:12 Updated Sep 07, 2023 08:31

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GameStop rides on online pivot, videogame demand to beat estimates

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By Akash Sriram

(Reuters) -GameStop on Wednesday beat Wall Street estimates for quarterly revenue and posted a smaller-than-expected loss, buoyed by strong demand for videogames, collectibles and consoles.

The company's shares rose nearly 6% in extended trading as the results indicated that efforts to boost its digital presence were paying off.

Executive chairman and top shareholder Ryan Cohen has been steering GameStop (NYSE:GME) toward a more online-focused model as the chain, largely dependent on physical stores, strives to rebound from a recent slump in sales.

"GameStop's Q2 results show encouraging signs towards the company's on-going transformation plans to regain its presence in the video game retail industry under its new leadership," said John Oh, analyst at Third Bridge.

Sales of software and collectibles contributed to about 49% of total revenue in the second quarter, the company said.

Gamers have been splurging on popular titles such as Activision Blizzard (NASDAQ:ATVI)'s "Diablo IV" and Electronic Arts (NASDAQ:EA)' "F1 23".

Revenue rose about 2% to $1.16 billion for the quarter ended July 29, GameStop said, topping estimates of $1.14 billion, according to three analysts polled by LSEG.

The revenue rise was primarily due to a "significant software release", as well as increased sales of new gaming hardware in certain international segments, the company said, but did not elaborate on the software release.

On an adjusted basis, GameStop lost 3 cents per share, compared with analysts' estimates of a loss of 14 cents.

The company said it will not hold a post-earnings conference call.

In a top-rung shake-up, its finance chief stepped down last month in a second high-profile exit after the board in June ousted its fifth CEO in five years.

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GameStop rides on online pivot, videogame demand to beat estimates

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