GameStop Corp. (NYSE:GME) saw its shares go south Thursday on the latest quarterly financial results.
Net sales were $1.297 billion for the quarter, compared to $1.005 billion in the prior year’s third quarter.
Sales attributable to new and expanded brand relationships, such as Samsung, LG, Razer, Vizio and others, contributed to the Company's growth in the quarter.
GME said inventory was $1.141 billion at the close of the quarter, compared to $861 million at the close of the prior year’s third quarter, reflecting the Company’s focus on front-loading investments in inventory to meet increased customer demand and mitigate supply chain issues.
GameStop ended the period with cash and cash equivalents of $1.413 billion as well as no debt other than a $46.2 million low-interest, unsecured term loan associated with the French government’s response to COVID-19.
The firm also stablished new offices in Seattle and Boston, which are technology hubs with established talent markets.
It also secured a new $500-million ABL facility, which closed in November just after the end of the third quarter, with improved liquidity and terms, including reduced borrowing costs, lighter covenants and additional flexibility.
However, its longer-term strategy is raising worries. Jefferies analyst Stephanie Wissink says GME played it down the middle by providing just enough strategic visibility while leaving room for both dreamers and discounters. Wedbush Securities cut its price target on GameStop to $45 from $50 after the report while citing some of the same concerns over the long-term strategy.
GME shares doffed $8.18, or 4.7%, to $165.00
