Following the Reddit-influenced Wall Street battle over GameStop’s share value earlier this year, GameStop stock currently stands nearly 10 times higher than where it started in 2021. That may seem like an indication that the company is in a good place after a rough 2020, but, it remains clear the stock price is not directly driven by the company’s current performance, as evidenced by GameStop’s fourth quarter and fiscal 2020 results.
Net sales during the fourth quarter were $2.122 billion. That’s a slight decline from the same period during the prior year, when net sales were $2.194 billion, and a miss compared to analyst expectations. For the full year, net sales were $5.090 billion, compared with $6.466 billion the year prior. Comparable store sales dropped 9.5% for the full year (e-commerce sales, as you might expect, were up significantly, increasing by 191%).
These declines are notable for occurring during an ongoing pandemic, a period which has led to an overall spike in sales for the games industry, and the launch of a new generation of consoles (PS5 and Xbox Series X|S), which also usually leads to an increase in game sales.
Among other things, GameStop cites store closures as a reason for the decline–both permanent closures it planned prior to COVID-19 and temporary ones due to the pandemic.
So yes, GameStop stock is still high–$181.75 per share at the end of Tuesday–but that’s most likely still a result of other factors, not just the performance of the business. In after-hours trading, the share price rose to $197 before dropping to $161 at the time of this writing.
GameStop, for its part, did not address the wild ride of its stock price in 2021 during its earnings call with investors, nor did it host the traditional Q&A session. The company also declined to provide guidance for 2021.
GameStop CEO George Sherman tried to highlight some positives in the earnings report, saying, “I am proud of how our entire organization came together in 2020 to adapt to the challenging pandemic environment, effectively serve our customers’ demand for gaming and entertainment products, and navigate through the year with strong liquidity and a strengthened balance sheet. Our execution led to a profitable fourth quarter that included a 6.5% comparable store sales growth, a 175% increase in global E-Commerce sales and a $92.6 million reduction in SG&A. The past year also saw us take steps to accelerate our de-densification efforts and streamline our store footprint, leverage our retail locations to provide same-day delivery and curbside pickups, and continue to enhance our suite of E-Commerce platforms.”
Following the release of the earnings report, GameStop announced that Jenna Owens (previously Amazon’s director and general manager for distribution and multi-channel fulfillment) has been hired to be GameStop’s new chief operating officer.
Alongside Owens, GameStop is bringing on two executives: Neda Pacifico as senior vice president of e-commerce, and Ken Suzuki as vice president of supply chain systems. Pacifico previously worked as the Chewy vice president of e-commerce, while Suzuki was the Zulily vice president of supply chain technology.
