(Reporting by Akash Sriram in Bengaluru – Prepared by Mohamed for the Arabic Bulletin) Editing by Sriraj Kalovila
GameStop relies on its online hub, and demand for video games is exceeding estimates
Sept. 6 (Reuters) – GameStop Inc (GME.N) on Wednesday beat Wall Street estimates for quarterly revenue and posted a smaller-than-expected loss, boosted by strong demand for video games, collectibles and consoles.
Shares of the company rose nearly 6% in extended trading as results indicated that efforts to bolster its digital presence are paying off.
Executive Chairman and largest shareholder Ryan Cohen has been guiding GameStop toward a more online-centric model as the chain, which relies largely on brick-and-mortar stores, seeks to recover from a recent decline in sales.
“GameStop’s second-quarter results show encouraging signs toward the company’s ongoing transformation plans to reclaim its presence in the video game retail industry under its new leadership,” said Jun Oh, analyst at Third Bridge.
The company said that sales of software and collectibles contributed about 49% of total revenue in the second quarter.
Gamers have been spending their money on popular games like Activision Blizzard (ATVI.O) “Diablo IV” and Electronic Arts (EA.O) “F1 23”.
GameStop said revenue rose about 2% to $1.16 billion for the quarter ended July 29, beating estimates of $1.14 billion, according to three analysts surveyed by LSEG.
The company said the revenue increase was primarily due to a “significant software release”, as well as increased sales of new gaming hardware in certain international segments, but did not elaborate on the software release.
On an adjusted basis, GameStop lost 3 cents per share, compared to analyst estimates for a loss of 14 cents.
The company said it will not hold a conference call after the earnings announcement.
In a major shake-up, its chief financial officer resigned last month in the second high-profile exit after the board in June ousted its fifth chief executive in five years.
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