GameStop Corp. (NYSE:GME) stock rose 7.24% (As on September 8, 11:26:10 AM UTC-4, Source: Google Finance) after the company posted mixed result for the second quarter of FY 22 as consumers cut back on discretionary spending amid decades-high inflation. The company’s earnings came in at -$108.7 million compared with -$61.6 million, in last year’s second quarter. Sales attributable to collectibles, which is a segment the Company intends to grow over the long-term, were $223.2 million for the quarter, compared to $177.2 million in the prior year’s second quarter. Inventory was $734.8 million at the close of the quarter, compared to $596.4 million at the close of the prior year’s second quarter, reflecting the Company’s focus on maintaining adequate in-stock levels to meet customer demand and offset lingering supply chain headwinds. The company has Ended the period with cash and cash equivalents of $908.9 million as well as no debt other than a low-interest, unsecured term loan associated with the French government’s response to COVID-19. GameStop’s results come at a time when gaming companies are facing a slowdown in demand for video games from pandemic highs, raising doubts about their ability to weather an economic downturn.
GME in the second quarter of FY 22 has reported the adjusted loss per share of 35 cents, missing the analysts’ estimates for the adjusted loss per share of 38 cents. The company had reported 3.4 percent fall in the adjusted revenue to $1.14 billion in the second quarter of FY 22, beating the analysts’ estimates for revenue of $1.27 billion. Selling, general and administrative expenses were $387.5 million for the quarter, representing a sequential decline of 14.3% from the first quarter of 2022 and reflecting, in part, the Company’s focus on right-sizing costs following a period of significant investment in long-term initiatives.
On the other hand, GameStop also announced that it has entered into a partnership with crypto exchange FTX US. The partnership is intended to introduce more GameStop customers to the FTX community and its marketplaces for digital assets. In addition to working with FTX on new ecommerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores. During the term of the partnership, GameStop will be FTX’s preferred retail partner in the United States. The financial terms of the partnership are not being disclosed.