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GameStop reports $215 million loss in fiscal 2020, misses fourth-quarter expectations

GameStop reports $215 million loss in fiscal 2020, misses fourth-quarter expectations
GameStop reports $215 million loss in fiscal 2020, misses fourth-quarter expectations
Despite video games having a huge year in 2020, and two new consoles launching, GameStop's lost $215 million in fiscal 2020.
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  • After a huge year for video games, GameStop reported its Q4 and fiscal 2020 earnings on Tuesday.
  • The company missed estimates, with $5 billion in revenue and a $215 million loss for the year.
  • GameStop has struggled over the past few years as consumers increasingly turn to digital storefronts.
  • Visit the Business section of Insider for more stories.

Ailing video game retailer GameStop reported its fourth-quarter 2020 earnings on Tuesday afternoon, which also included the company's fiscal year results ending February 1, 2021.

The company's report came in shy of analyst expectations for the year, with $5 billion in revenue — a decrease from the previous fiscal year revenue of $6.4 billion dollars. For the fourth quarter, GameStop similarly missed expectations, with $2.1 billion in revenue. 

The company lost $215 million in the 12 months ending February 1, 2021.

Here are the key numbers to watch from GameStop's Q4/FY 2020 earnings:

  • Q4 2020 revenue: $2.1 billion. Analysts were expecting $2.2 billion.
  • FY 2020 revenue: $5.08 billion. Analysts were expecting $5.27 billion.

Despite the massive impact of the pandemic on video game sales in 2020, GameStop failed to reach analyst expectations.

"Our emphasis in 2021 will be on improving our E-Commerce and customer experience, increasing our speed of delivery, providing superior customer service and expanding our catalogue," GameStop CEO George Sherman said in a press release.

The company previously highlighted supply constraints with new game consoles from Sony's PlayStation and Microsoft's Xbox as a mitigating factor.

GameStop stores "experienced unprecedented demand for recently launched gaming consoles," the company said in January. "While consumer demand far outpaced constrained supply," the statement said, "these products will drive sales well into 2021 as console availability from our suppliers improves later in the year." Sony has said it expects to have a more steady supply of its wildly popular PlayStation 5 console by some time in the fall.

GameStop's ongoing "transformation"

Before becoming a "meme stock," GameStop was at the early stages of a "transformation" led by activist investor, board member, and Chewy cofounder Ryan Cohen. Cohen's investment firm, RC Ventures, owns 12.9% of GameStop — making Cohen the second-largest single shareholder. 

The company announced in early January that Cohen and two of his former Chewy lieutenants would become new members of the board. Pending a vote in June, the trio will make up one-third of the board's membership.

Soon after Cohen joined the board, major c-suite changes began as part of the "transformation."

Amazon vet Matt Francis was hired on as the CTO in early February. A former Amazon Web Services engineering lead, he's tasked with, "overseeing e-commerce and technology functions" for GameStop.

Then, in late February, CFO Jim Bell was suddenly forced out of his role at the company. The board of directors "lost faith" in Bell, according to a person familiar with the decision who spoke with Insider. This morning, ahead of the earnings release, another executive departed the company. And on Tuesday afternoon, another former Amazon exec was added to the company's c-suite: Jenna Owens, who previously worked for Amazon and Google.

Included in the release announcing Owens' appointment were two other executive hires: Zulily's former Vice President of Supply Chain Technology, Ken Suzuki, is joining GameStop as vice president of Supply Chain Systems. Neda Pacifico will become the company's vice president of e-commerce, the same title she held at Cohen's former company, Chewy, 

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

Read the original article on Business Insider
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