GameStop (GME.N) reported third-quarter net sales of $860.3 million, with profits exceeding Wall Street expectations.
In the company's latest financial report, GameStop's sales fell compared to the same period last year, below Wall Street's expectations, but this video game retailer unexpectedly turned a profit.
GameStop reported an adjusted earnings per share of 6 cents for the third quarter, with net sales of $860.3 million. Analysts surveyed by FactSet expected the company to lose 3 cents per share, with revenues of $888 million.
Compared to $1.08 billion in the same period last year, sales in the latest quarter decreased by 20%.
As usual, GameStop did not schedule a press conference or a call with analysts and investors to discuss the financial report.
Despite an initial drop in stock price due to the news, GameStop's stock price rose 10% in after-hours trading on Tuesday, possibly due to unexpected profits. The company reported a net profit of $17.4 million for the quarter, compared to a net loss of $3.1 million in the same period last year.
GameStop also stated that in this quarter, it completed the previously disclosed 'market offering' stock plan by selling 20 million shares of common stock. However, GameStop added that it does not expect any further stock offerings in the current fiscal year.
According to Dow Jones market data, GameStop's stock price has risen 54% this year as of Tuesday's close and is on track for its best annual performance since 2021, when the stock price soared 688%. During the same period, the S&P 500 index rose 27%.
Behind the rise in stock prices is news from mid-May that 'meme stock' celebrity Keith Gill (online nickname 'Roaring Kitty') returned to social media, reigniting hopes for a trading frenzy similar to that of 2021. Retail investors discussed buying GameStop stock on online forums, squeezing short sellers and driving the stock price soaring. After Gill's return, GameStop's stock price rose 74% on May 13 and another 60% on May 14, raising hopes for another short squeeze.
As of the close on Tuesday, GameStop's stock price had fallen about 43% from its 52-week closing high of $48.75, which occurred on May 14, as traders and investors weighed the potential for meme stock surges against the business challenges facing GameStop.
Article reposted from: Jin Shi Data