- GameStop shares fell as much as 10% on Thursday following its second quarter earnings report.
- The company offer no financial outlook during its earnings call.
- GameStop’s adjusted loss of $US0.76 ($AU1) a share was wider than an expected loss of $US0.67 ($AU1) a share.
- See more stories on Insider’s business page.
GameStop sharply dropped Thursday after the video game retailer at the center of this year’s meme stocks frenzy posted a quarterly adjusted loss that was wider than anticipated and opted not to offer specific financial guidance.
The company, which runs more than 4,800 stores worldwide, late Wednesday reported its second-quarter adjusted loss was $US0.76 ($AU1) a share, wider than the loss of $US0.67 ($AU1) a share expected in a Refinitiv survey of analysts. The company held a call about its quarterly results but CEO Matt Furlong, the sole participant according to a transcript, did not take any questions.
“In terms of our outlook, we are not providing formal guidance at this time,” said Furlong before ending the call. The former Amazon executive became GameStop’s CEO in June and is part of a new executive team tasked with overseeing turnaround efforts for the company.
Shares dropped as much as 10.5% to $US178 ($AU242) then pared the decline to 8%. The stock, which is a favorite of retail investors, has surged by roughly 880% during 2021.
Sales of $US1.18 ($AU2) billion did surpass expectations of $US1.12 ($AU2) billion. They increased by 26% from $US942 ($AU1,279) million a year earlier, with GameStop saying growth was possible even as it dealt with a 9% reduction in its global store fleet partially because the ongoing pandemic has forced some closures worldwide.
“We believe net sales is the primary metric by which stockholders should assess the company’s execution,” GameStop said in its analyst call.
GameStop also reiterated it raised more than $US1.1 ($AU1) billion in net proceeds by selling shares in an at-the-market equity offering in June, a move it said further strengthened its balance sheet and capital position.
Shares of GameStop, AMC and other meme stocks have surged this year as retail investors have hyped the shares on social media sites including Reddit’s Wall Street Bets. Those investors on multiple occasions have banded together to squeeze the shares of heavily shorted companies higher.