{"id":187202,"date":"2023-03-23T11:00:00","date_gmt":"2023-03-23T15:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=187202"},"modified":"2023-03-23T10:50:08","modified_gmt":"2023-03-23T14:50:08","slug":"ceo-says-gamestop-is-a-much-healthier-business-today-as-shares-up-29-ytd","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/stocks\/ceo-says-gamestop-is-a-much-healthier-business-today-as-shares-up-29-ytd\/","title":{"rendered":"CEO Says GameStop is a \u201cMuch Healthier Business\u201d Today as Shares Up 29% YTD"},"content":{"rendered":"\n<p><strong>GameStop aims to increase profitability by cutting costs and moving beyond video games.<\/strong><\/p>\n\n\n\n<p>GameStop shares jumped on Wednesday after the video game retailer&nbsp;<a href=\"https:\/\/news.gamestop.com\/news-releases\/news-release-details\/gamestop-reports-fourth-quarter-and-fiscal-year-2022-results\" target=\"_blank\" rel=\"noreferrer noopener\">posted<\/a>&nbsp;a quarterly profit for the first time in two years. The company also reported a surge in sales above Wall Street expectations, with its CEO claiming GameStop is in a \u201cmuch healthier\u201d business position compared to the start of 2021.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-gamestop-earned-48-2m-in-q4-2022\">GameStop Earned $48.2M in Q4 2022<\/h2>\n\n\n\n<p>On Tuesday, GameStop posted its earnings report for the latest quarter of 2022. The company reported a quarterly profit after two years of earnings in the red, finishing its latest fiscal year on a high note thanks to the holiday season.<\/p>\n\n\n\n<p>More specifically, the video game retailer reported a $48.2 million net profit in Q4 2022, compared to a net loss of $147.5 million in Q4 2021. The company\u2019s net sales dropped slightly to $2.23 billion<strong>&nbsp;<\/strong>from $2.25 billion<strong>&nbsp;<\/strong>in last year\u2019s fourth quarter.<\/p>\n\n\n\n<p>The company posted an adjusted profit of 16 cents per share for Q4 2022, beating Wall Street expectations of negative 13 cents. The surprise profit led to a sharp jump in GEM shares, which gained 48% in Tuesday\u2019s extended session.<\/p>\n\n\n\n<p>Moreover, GameStop shares closed Wednesday up by 35.24%, trading at $23.87 per share. The recent rally has also helped the video game retailer bring its year-to-date (YTD) performance to&nbsp;<a href=\"https:\/\/www.ytdreturn.com\/gme\/\" target=\"_blank\" rel=\"noreferrer noopener\">29.31%<\/a>.&nbsp;<\/p>\n\n\n\n<p>GameStop has been working to steer itself back to profitability by cutting costs. The company has reportedly&nbsp;launched&nbsp;a series of corporate layoffs to reach its profitability and growth goals.<\/p>\n\n\n\n<p>Courtesy of such measures to cut costs, selling, general and administrative expenses came in at $453.4 million for the latest quarter of 2022 or 20.4% of sales. In comparison, expenditures were $538.9 million, or 23.9% of sales, in the year-earlier period.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">CEO Says GameStop is Much Healthier Now<\/h2>\n\n\n\n<p>GameStop CEO Matt Furlong said at the company\u2019s investor call after the results that the company is \u201ca much healthier business today than it was at the start of 2021.\u201d&nbsp;<\/p>\n\n\n\n<p>He added that the company is \u201caggressively focused on year-over-year profitability improvement while still pursuing pragmatic long-term growth.\u201d This includes further cuts, particularly in its European markets, where it has already been reducing its number of retail stores.&nbsp;<\/p>\n\n\n\n<p>The video game retailer also reduced its inventory to $682.9 million at the close of the quarter, compared with $915 million at the close of the fourth quarter of 2022. That reflected its \u201congoing focus on maintaining a healthy inventory position,\u201d Furlong said.<\/p>\n\n\n\n<p>However, the&nbsp;<a href=\"https:\/\/tokenist.com\/the-sec-has-referred-to-gme-amc-as-meme-stocks-in-legal-documents\/\">one-time meme stock<\/a>&nbsp;might have difficulty returning to profitability, considering the ongoing decline in used-game sales. One GameStop manager recently&nbsp;<a href=\"https:\/\/www.dailydot.com\/irl\/gamestop-corporate-layoffs\/\" target=\"_blank\" rel=\"noreferrer noopener\">claimed<\/a>&nbsp;that the retail chain is not performing well. \u201cNo one comes in anymore,\u201d the manager said.&nbsp;<\/p>\n\n\n\n<p>In response, GameStop is closing stores and moving beyond video games as it attempts a turnaround. Specifically, the company has&nbsp;<a href=\"https:\/\/tokenist.com\/gamestops-nft-marketplace-fails-to-impress-on-launch-but-can-it-spur-mainstream-adoption\/\">launched an NFT marketplace<\/a>&nbsp;and a suite of Web3 tools to digitize its business further.<\/p>\n\n\n\n<p>Nevertheless, the GameStop stock is currently down 2.35% in pre-market trading.&nbsp;<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted March 23, 2023 &#8211; <a href=\"https:\/\/tokenist.com\/ceo-says-gamestop-is-a-much-healthier-business-today-as-shares-up-29-ytd\/\">CEO Says GameStop is a \u201cMuch Healthier Business\u201d Today as Shares Up 29% YTD<\/a><\/p>\n\n\n\n<p><strong>Disclosure:<\/strong>&nbsp;Ruholamin Haqshanas has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our&nbsp;website policy&nbsp;for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>GameStop aims to increase profitability by cutting costs and moving beyond video games.<\/p>\n","protected":false},"author":830,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[6,8,9,22,26,3],"tags":[3351,44],"contributors-categories":[13710],"class_list":{"0":"post-187202","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-north-america","7":"category-region","8":"category-securities","9":"category-stocks","10":"category-text-articles","11":"category-traders-insight","12":"tag-gamestop","13":"tag-stocks","14":"contributors-categories-the-tokenist"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>CEO Says GameStop is a \u201cMuch 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