GameStop Corp (NYSE: GME) reported a fiscal 2022 second-quarter loss that widened from last year. However, the bottom line reported by the retailer of games and other entertainment products was better than Wall Street estimates.
In an attempt to provide a platform for its customers to trade digital assets, GameStop has entered into a partnership with cryptocurrency exchange FTX. The stock of GameStop ended Thursday’s trading at $25.83, up $1.79 or 7.45% from its prior close. In the year to date, the company’s stock value has eroded by 36%. The stock, known for its volatility, recorded a high and low of $63.92 and $19.39, respectively, in the past year.
Grapevine, Texas-based GameStop reported second-quarter revenues of $1.136 billion, a decline from $1.183 billion in the similar period last year.
For the quarter ended July 30, 2022, the company posted a net loss of $108.70 million, or $0.36 per share, compared with a net loss of $61.60 million, or $0.21 a share, in the quarter ended July 31, 2021.
Excluding transformation costs and asset impairments, among others, the 2Q 2022 adjusted net loss widened to $107.10 million, or $0.35 per share, from $55 million, or $0.19 per share, in 2Q 2021. The reported figure reflects the sixth successive quarterly loss.
Analysts surveyed by FactSet anticipated GameStop to post a loss of $0.42 per share on revenues of $1.27 billion.
Segment wise,
- Hardware and accessories revenues fell by 2.10% to $596.40 million.
- Software revenues were $316.40 million, a decrease of 20.2% from last year.
- Collectibles revenues surged 25.90% to $223.20 million.
At the end of Q2 2022, the company had $957 million in cash, cash equivalents, and restricted cash, down almost 50% from $1.775 billion in Q2 2021. Inventory surged to $734.80 million, from $596.40 million last year.
In July, the company unveiled its NFT marketplace and is now undergoing a beta trial (opened to the public).
The firm also permits users to trade their NFTs for other digital goods by linking their digital asset wallets, including the GameStop Wallet. In this regard, GameStop has entered into a partnership with FTX. As per the agreement, customers of GameStop will have access to the FTX platform for trading digital assets. Furthermore, GameStop will start offering FTX gift cards in some of their chosen shops. Notably, GameStop will also be FTX’s favorite retail associate in the US.
The mixed quarterly results are expected to keep GameStop’s stock range-bound in the short term.
The historical price chart indicates that the stock of GameStop is trading near its support level at 25. The next resistance is anticipated only near 50. Additionally, the stochastics oscillator is near the bearish zone. Therefore, we are anticipating the stock to remain in an uptrend in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
