GameStop Falls Despite First Q2 Profit in Seven Years

September 11, 2024 09:32 PM AEST | By Team Kalkine Media
 GameStop Falls Despite First Q2 Profit in Seven Years
Image source: shutterstock

GameStop Corp (NYSE:GME) shares experienced a decline in aftermarket trading despite the company reporting its first profitable second quarter in seven years.

For the three months ending in June, GameStop achieved net income of $14.8 million, a significant turnaround from the $2.8 million loss recorded in the same period the previous year. Earnings per share (EPS) were reported at $0.01, surpassing analysts' predictions by $0.10.

The profitability was achieved despite a notable drop in net sales, which fell to $798.3 million from $1.164 billion year-over-year, missing revenue forecasts by $97.37 million. This decline in sales was a key point of concern.

A significant contributor to the positive net income was a reduction in selling, general, and administrative (SG&A) expenses. These expenses decreased to $270.8 million from $322.5 million last year. However, the proportion of SG&A expenses relative to net sales increased to 33.9%, compared to 27.7% in the previous year.

Additionally, GameStop's robust cash position, totaling $4.2 billion, provided a buffer through interest income generated from these reserves. This income helped offset some of the operating losses.

The achievement of profitability marks a significant milestone for GameStop, which has faced challenges over recent years due to shifts in consumer behavior and intensified competition from online platforms. Despite the positive financial results, GameStop's shares fell by 10.6% in premarket trading on Wednesday.




Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.