GME Stock – GameStop (GME) Down 13.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for GameStop (GME). Shares have lost about 13.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is GameStop due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
GameStop Q1 Loss Narrower-Than-Expected, Sales Up
GameStop reported better-than-expected first-quarter fiscal 2021 results. The company was able to achieve significant top-line growth, while the bottom line loss contracted on a year-over-year basis. Notably, the company witnessed sales growth across all categories.
Management remains impressed with growth witnessed in the quarter, despite store closures that were undertaken as part of the companys de-densification efforts. Also, temporary store closures in Europe due to pandemic were a drag. Progressing on its growth endeavors, the company has been on track with strengthening balance sheet. This includes noteworthy steps undertaken to eliminate long term debt. Also, the company intends to sell more shares under its at-the-market equity offering program (the ATM Offering) for bolstering financial position as well as aiding business transformation. Further, the company announced new inclusions to its board.
Moving on, management highlighted that second-quarter sales trend continue to reflect growth. Total sales in May increased nearly 27% year on year. However, the company continues to suspend the guidance for the fiscal year.