GameStop Corp.'s shares tumbled 14% in premarket trading Wednesday, after the videogame retailer and original meme stock missed analysts' top- and bottom-line estimates in its fourth-quarter results.
The company reported net income of $63.1 million, or 21 cents a share, compared with $48.2 million, or 16 cents a share, in the year-earlier quarter. On an adjusted per-share basis, GameStop earned 22 cents a share, whereas analysts surveyed by FactSet were expecting earnings of 30 cents a share.
Revenue in the fourth quarter was $1.794 billion, compared with $2.226 billion in the previous year's quarter. Analysts expected GameStop to report revenue of $2.050 billion.
During its 2023 fiscal year, GameStop's net sales in the United States, Canada and Australia decreased by 16.2%, 15% and 11.2%, respectively, compared to the prior year. Net sales in Europe increased by 14.1%.
The company exited the quarter with cash and cash equivalents of $1.199 billion, compared with $1.210 billion at the end of the previous quarter.
As of Feb. 3, GameStop had a total of 4,169 retail stores, down from 4,413 on Jan. 28, 2023.
GameStop is not hosting a conference call to discuss its results.
The company saw major leadership changes last year. GameStop fired CEO Matthew Furlong in June and announced that its board had elected activist investor Ryan Cohen as executive chair. Cohen was named CEO in September, the latest chapter in his attempt to breathe new life into the company.
Last year, GameStop's board of directors also approved a new investment policy that lets the company invest in equity securities, among other investments. GameStop's board has given Cohen the authority to manage the investment portfolio.
GameStop shares have fallen 11.6% in 2024 so far, compared with the S&P 500 index's gain of 9.1%.
