A GameStop store operates in a strip mall on March 16, 2023 in Chicago, Illinois.
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GameStop on Tuesday posted a quarterly profit for the first time in two years, finishing out the year on a high note after grappling with sales declines, inventory woes and cash flow pressure.
Shares of the company jumped about 30% during after-hours trading.
For the quarter ended Jan. 28, net sales dropped slightly to $2.23 billion from $2.25 billion in last year’s fourth quarter. The video game retailer also posted a profit of $48.2 million, or 16 cents a share, compared to a loss of $147.5 million, or 49 cents, a year ago.
GameStop did not provide financial guidance and has not given guidance since the early days of the pandemic. Its results can’t be compared with Wall Street estimates because too few analysts cover the company.
The retailer has been working to steer itself back to profitability, and the holiday quarter’s results showed a benefit from a reduction in costs.
GameStop had previously been riding some short-term meme-stock momentum, but that has since leveled out. The stock traded around $18 on Tuesday, down dramatically from its 52-week high of nearly $50 about a year ago.
Its turnaround plan was reinvigorated by a leadership shake-up in 2021 that put CEO Matt Furlong, an Amazon veteran, at the helm and added Ryan Cohen, Chewy founder and former Bed Bath & Beyond activist investor, as board chair. The company also laid off staff and replaced its chief financial officer.
The company has been working to revamp its real estate portfolio and get more online as the video game industry heads in that direction.
For the full fiscal year, GameStop saw $5.93 billion in sales, down slightly from $6.01 billion in fiscal 2021, and saw increased revenues from its collectibles category, which the retailer is banking will bring long-term growth for the company.
Like many retailers, GameStop experienced supply chain delays that left it with a backlog of inventory…
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