GameStop shares fall more than 7% despite posting narrower loss and rising sales
- GameStop stock fell more than 7% in extended trading on Wednesday after the retailer posted a narrower loss than last year.
- The company reported a rise in sales during the quarter.
- The SEC requested additional documents from GameStop in the agency's investigation of trading activity in GameStop and other companies.
Shares of video game retailer GameStop fell more than 7% in extended trading on Wednesday after the company reported its second-quarter loss narrowed as sales rose from a year ago.
The retailer did not provide an outlook for the coming quarters or take questions from investors during its earnings conference call. It was the first call since CEO Matthew Furlong and CFO Mike Recupero joined its leadership.
The retailer also said that the U.S. Securities and Exchange Commission has requested additional documents for a probe into GameStop and other companies' trading activity, which the retailer had disclosed in May. GameStop said the inquiry is not expected to negatively impact the company.
GameStop shares have been caught up in the meme stock craze. The frenzy has pushed the value of its stock up 957% since the start of the year, and led to wild fluctuations in value as short sellers, options traders and retail investors bid on the stock. Although it's far below its 52-week high, GameStop's market cap has swelled to $14.28 billion, even though the company is still posting quarterly losses.
For the quarter ended July 31, the company reported a net loss of $61.6 million, or 85 cents per share, compared with a loss of $111.3 million, or $1.71 per share, a year ago. On an adjusted basis, GameStop lost 76 cents per share.
Sales rose to $1.18 billion from $942 million a year earlier.
According to Refinitiv, analysts were expecting the company to lose 67 cents a share on revenue of $1.12 billion.
GameStop has been trying to shift its business more toward e-commerce. In an effort to improve the delivery of online orders, the company announced it signed a lease for a 530,000-square-foot fulfillment center in Reno, Nevada. The site will help it to expand its fulfillment network across both U.S. coasts.
The retailer is also working to expand its customer care operations in the U.S. by leasing a center in Pembroke Pines, Florida.
Read the company's earnings release here.
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