GameStop (GME) -) shares slumped lower Thursday after the video game retailer and meme stock favorite posted stronger-than-expected second quarter revenues even as it bottom line remained firmly in the red.
GameStop said group revenues rose 2.5% from last year to $1.164 billion, topping Street forecasts, as its shift to online sales from a reliance on brick-and-mortar traffic continues to support its topline.
Profits, however, remain elusive and the Grapevine, Texas-based retailer posted a loss of 3 cents per share, down from a loss of 35 cents per share last year and inside the Street's 14 cent loss forecast. GameStop has only registered only two profitable quarters in the past three years.
"GameStop’s 2Q 2023 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 Third Bridge analyst John Oh. "The growth in software sales is encouraging to see as hardware sales remained steady."
"It will be interesting to see what the holiday season holds for GameStop and how the company will continue to implement cost-saving measures in their path to profitability," he added.
GameStop shares were marked 3.3% lower in early Thursday trading to change hands at $18.13 each, pushing the stock into negative territory for the past six months.
GameStop, which hasn't held an analysts call in more than two years, decline to speak to the media or investors last night, but said earlier this spring that it would explore further "strategic options", including further store closings and the exit of unprofitable businesses, over the coming months.
GameStop has also weathered a notable exodus of top executive talent, with CFO Diana Saadeh-Jajeh resigning last month, just weeks after the ousting of Matt Furlong, the fifth CEO to depart the Grapevine, Texas based group over the past five years.
Billionaire investor and chairman Ryan Cohen, however, as stuck with the group, buying around $10 million worth of shares in June to take his overall stake to around 12%.
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