Following the Reddit-influenced Wall Road battle over GameStop’s share worth earlier this 12 months, GameStop inventory at present stands almost 10 occasions greater than the place it began in 2021. That will look like a sign that the corporate is in a superb place after a tough 2020, however, it stays clear the inventory worth just isn’t instantly pushed by the corporate’s present efficiency, as evidenced by GameStop’s fourth quarter and monetary 2020 outcomes.
Web gross sales through the fourth quarter have been $2.122 billion. That is a slight decline from the identical interval through the prior 12 months, when internet gross sales have been $2.194 billion, and a miss in comparison with . For the complete 12 months, internet gross sales have been $5.090 billion, in contrast with $6.466 billion the 12 months prior. Comparable retailer gross sales dropped 9.5% for the complete 12 months (e-commerce gross sales, as you may anticipate, have been up considerably, rising by 191%).
These declines are notable for occurring throughout an ongoing pandemic, a interval which has led to an general spike in gross sales for the video games business, and the launch of a brand new era of consoles (PS5 and Xbox Collection X|S), which additionally normally results in a rise in recreation gross sales.
Amongst different issues, GameStop cites retailer closures as a cause for the decline–both everlasting closures it deliberate previous to COVID-19 and non permanent ones as a result of pandemic.
So sure, GameStop inventory remains to be high–$181.75 per share on the finish of Tuesday–but that is more than likely nonetheless a results of different components, not simply the efficiency of the enterprise. In after-hours buying and selling, the share worth rose to $197 earlier than dropping to $161 on the time of this writing.
GameStop, for its half, didn’t tackle the wild experience of its inventory worth in 2021 throughout its earnings name with traders, nor did it host the normal Q&A session. The corporate additionally declined to offer steerage for 2021.
GameStop CEO George Sherman tried to spotlight some positives within the earnings report, saying, “I’m happy with how our complete group got here collectively in 2020 to adapt to the difficult pandemic surroundings, successfully serve our prospects’ demand for gaming and leisure merchandise, and navigate by the 12 months with sturdy liquidity and a strengthened steadiness sheet. Our execution led to a worthwhile fourth quarter that included a 6.5% comparable retailer gross sales progress, a 175% improve in world E-Commerce gross sales and a $92.6 million discount in SG&A. The previous 12 months additionally noticed us take steps to speed up our de-densification efforts and streamline our retailer footprint, leverage our retail areas to offer same-day supply and curbside pickups, and proceed to boost our suite of E-Commerce platforms.”
Following the discharge of the earnings report, GameStop announced that Jenna Owens (beforehand Amazon’s director and normal supervisor for distribution and multi-channel achievement) has been employed to be GameStop’s new chief working officer.
Alongside Owens, GameStop is bringing on two executives: Neda Pacifico as senior vice chairman of e-commerce, and Ken Suzuki as vice chairman of provide chain programs. Pacifico beforehand labored because the Chewy vice chairman of e-commerce, whereas Suzuki was the Zulily vice chairman of provide chain expertise.