GameStop is back in the game! And this time, it isn’t a mysterious meme rally. The video game retailer posted a profit of $48.2 million (+0.16 EPS) in the holiday quarter, marking its first quarterly profit in two years. Compare that to a loss of $147.5 million (-$0.49) at this time last year.
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The news sent its shares soaring more than 40% during premarket trading.
Gamestop stock is bringing other meme-favorites along for the ride: AMC and BBBY are both up roughly 9% this morning.
To achieve this feat, GameStop had to take a page out of Meta’s playbook by aggressively cutting costs. The retailer’s selling, general and administrative expenses for the quarter came in at $453.4 million, down from $538.9 million in the same period last year. Recall that the video game retailer warned of 2023 layoffs in January.
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But GameStop isn’t resting on its laurels just yet. CEO Matt Furlong says the company plans to cut more excess costs, including in European markets, and is considering expanding into higher-margin categories like toys.
The video game industry may be moving towards online gaming, but GameStop is holding on to its brick-and-mortar stores like a koala to a eucalyptus tree. Still, the retailer is trying to find its digital identity. It even tried to launch an NFT marketplace and partnered with a crypto exchange, but let’s just say those were more like game overs than game changers.
Meanwhile, GME’s most notable nemesis, Gabe Plotkin (formerly of Melvin Capital) is still rich enough that he’s considering buying Michael Jordan’s stake in the Charlotte Hornets.
Despite a few missteps, GameStop is back in the winner’s circle. And with its new leadership team, the retailer is primed for success. So, buckle up and get ready for some exciting times ahead because GameStop is back in the game.
