(Reuters) – GameStop on Wednesday beat Wall Street estimates for quarterly revenue and posted a smaller-than-expected loss, buoyed by strong demand for videogames, collectibles, and consoles.
The company’s shares jumped nearly 10% in volatile extended trading as the results indicated that efforts to boost its digital presence were paying off.
Executive chairman and largest shareholder Ryan Cohen has been steering GameStop toward a more online-focused model as the chain, largely dependent on physical stores, strives to rebound from a recent slump in sales.
Sales of software and collectibles contributed to about 49% of total revenue in the second quarter.
Gamers have been splurging on popular titles such as Activision Blizzard’s “Diablo IV” and Electronic Arts’ “F1 23”.
Revenue rose about 2% to $1.16 billion for the quarter ended July 29, GameStop said, topping estimates of $1.14 billion, according to three analysts polled by LSEG.
The revenue rise was primarily due to a “significant software release,” as well as increased sales of new gaming hardware in certain international segments, the company said, but did not elaborate on the software release.
On an adjusted basis, GameStop lost 3 cents per share, compared with analysts’ estimates of a loss of 14 cents.
The company said it will not hold a post-earnings conference call.
In a top-rung shake-up, its finance chief stepped down last month in a second high-profile exit after the board in June ousted its fifth CEO in five years.
“Leadership transitions can be inherently difficult to manage, and failure to timely or successfully implement transitions may cause disruption,” the company said in a quarterly regulatory filing.
(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)
Credit: The Star : Tech Feed
