:GameStop Corp reported first-quarter revenue that exceeded market expectations on Wednesday, as the video game retailer pivots toward a more online-focused model amid increasing competition from large retailers such as Walmart Inc and Amazon.com Inc.
Store closures during the COVID-19 pandemic affected GameStop’s physical retail business, for which it is primarily known. The company has been bolstering its online sales capabilities as shopping trends towards e-commerce accelerated during the pandemic.
GamStop had in May launched its digital asset wallet to store, send, receive and use cryptocurrencies and non-fungible tokens (NFTs). The wallet could also be use for transactions on GameStop’s NFT marketplace, expected to go live later this year.
Wedbush analyst Michael Pachter called Gamestop’s NFT marketplace announcement “nonsense”, saying it will “have no NFTs for sale and no customers, and wallets they are providing will be empty.”
Pachter added there was no Q&A session in its earning calls for several quarters in a row and there was no opportunity to seek clarity on their NFT marketplace product and strategy.
GameStop said its inventory in the quarter ended April 30 rose to $917.6 million from $570.9 million a year earlier, amid higher customer demand and likelihood of supply chain disruptions.
Sales of software and collectibles contributed to over 50 per cent of total quarterly revenue for the first time since the third quarter of 2020.
GameStop’s shares soared 687 per cent last year as it was at the center of a battle between retail investors coordinating on online forums and Wall Street hedge funds that had taken short positions in the company, in what is called a “short-squeeze”.
The company’s net sales were $1.38 billion in the quarter, above analysts’ average estimate of $1.32 billion, according to Refinitiv data.
Net loss for the company widened to $157.9 million, or $2.08 per share, for the first quarter, from $66.8 million, or $1.01 per share, a year earlier.
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