The shares of GameStop Corp. were unresolved on Tuesday in the extended session, as the video game retailer at the center of the so-called meme-stock phenomenon said it laid the groundwork for its “transformation” and reported lower-than-expected adjusted earnings in the fourth quarter and sales.
GameStop GME,
shares initially increased by more than 8% after the report, but subsequently reduced earnings and last decreased by 3%. The retailer said it earned $ 80.5 million or $ 1.19 a share in the quarter, compared to 32 cents a share in the quarter a year ago.
Adjusted for unique items, GameStop earned $ 90.7 million or $ 1.34 per share, compared to $ 1.27 per share a year ago.
Sales fell to $ 2.12 billion from $ 2.19 billion in the fourth quarter of 2019, reflecting the closure of pandemic-related stores, the company said.
Analysts surveyed by FactSet expected the video game retailer to report adjusted earnings of $ 1.35 per share on sales of $ 2.21 billion.
GameStop said same-store sales rose 6.5% in the same quarter, with online sales up 175% in the quarter and 191% in fiscal 2020. Analysts surveyed by FactSet expected same-store sales to grow by 4.7% in that quarter.
The company said it “consolidated” its balance sheet and ended the year with $ 635 million in cash, “laying the groundwork for the transformation.”
In a separate press release, GameStop said it has appointed Jenna Owens as chief operating officer, starting on Monday, March 29th. Owens was the director and distribution manager of Amazon.com Inc. AMZN,
The company also named Neda Pacifico, who was CEO of Chewy Inc. CHWY,
as senior vice president of e-commerce. Pacifico starts on Monday.
Chewy co-founder Ryan Cohen and two of his allies joined GameStop’s board earlier this year, hoping to lead a review.
The GameStop stock is often cited as one of the meme stocks that has risen in recent months due to the frantic increases in Reddit comments and social media posts.
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GameStop shares have gained more than 800% in the last three months, compared to gains of about 7% for the S&P 500 SPX,