GameStop Corp. stock fell in the extended session Tuesday as the videogame retailer at the center of the so-called meme-stock phenomenon said it had laid the groundwork for its “transformation” and reported lower-than-expected adjusted fourth-quarter earnings and sales.
shares initially rose by more than 8% after the report, but sank soon after, and were last down 11%. The retailer said it earned $80.5 million, or $1.19 a share, in the quarter, compared with earnings of 32 cents a share in year-ago quarter.
Adjusted for one-time items, GameStop earned $90.7 million, or $1.34 a share, compared with $1.27 a share a year ago.
Sales fell to $2.12 billion, compared with $2.19 billion in the fiscal 2019 fourth quarter, reflecting store closures related to the pandemic, the company said.
Analysts polled by FactSet expected the videogame retailer to report adjusted earnings of $1.35 a share on sales of $2.21 billion.
GameStop said same-store sales rose 6.5% in the quarter, with online sales rising 175% for the quarter and 191% for fiscal 2020. The analysts surveyed by FactSet had expected same-store sales to rise 4.7% in the quarter.
The company said it “strengthened” its balance sheet and ended the year with $635 million in cash, “laying the foundation for transformation.”
In a separate press release, GameStop said it had appointed Jenna Owens as chief operating officer, with a start date of Monday, March 29. Owens was a director and distribution manager Amazon.com Inc.
The company also named Neda Pacifico, who was an executive at Chewy Inc.
as senior vice president of e-commerce. Pacifico also starts on Monday.
Chewy co-founder Ryan Cohen and two of his allies joined GameStop’s board earlier this year, leading to hopes he’d direct an overhaul.
GameStop’s stock is often cited as one of the meme stocks that have skyrocketed in recent months thanks to frenzied boosts from Reddit comments and social-media posts.
Shares of GameStop have gained more than 800% in the past three months, compared with gains around 7% for the S&P 500 index