We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GameStop Corp. (GME - Free Report) has released preliminary financial results for the first quarter of fiscal 2024, highlighting a tumultuous period for the retailer, with a significant drop in sales and strategic financial maneuvers. According to the report, net sales for the quarter are expected between $872 million and $892 million, suggesting a stark decline from the $1.237 billion reported in the prior-year quarter. This drop reflects the ongoing challenges within the retail sector and shifts in consumer behavior affecting GameStop.
Cost Management & Loss Reduction
On a promising note, the company has managed to reduce its selling, general and administrative expenses (SG&A), which are projected between $290 million and $300 million, suggesting a dip from the $345.7 million reported last year. This indicates an aggressive approach to cost management, likely a response to the declining revenues.
Furthermore, GameStop expects the net loss for the quarter to narrow to $27-$37 million, suggesting an improvement from the net loss of $50.5 million reported in the prior-year quarter. This reduction in losses could be seen as a positive outcome of the company's ongoing restructuring efforts.
Image Source: Zacks Investment Research
Strategic Share Offering
In an important strategic move, GameStop announced the potential sale of up to 45 million class A shares.
The decision to issue additional shares follows a turbulent period in the stock market, wherein GameStop's shares have been highly volatile. After a recent spike in the share price, attributed partly to the resurgence of interest from meme stock enthusiasts, the company's stock price experienced a sharp decline, falling 19.7% during the trading session on May 17.
Market Reaction & Forward Outlook
As the market reacts to these developments, the impacts of the additional share offering and the ongoing adjustments in GameStop's business strategy are closely monitored. Investors are particularly attuned to how these changes might stabilize the company's financials and influence its stock price in an increasingly unpredictable retail environment.
Wrapping Up
GameStop's fiscal first-quarter preliminary results depict a company navigating through significant challenges but taking decisive steps to stabilize its financial health. The planned share offering, while dilutive, could provide the necessary capital to support GameStop's transformation in a rapidly evolving market. As the company continues to adjust its strategy, the coming quarters will be critical in determining its long-term viability and ability to return to profitability.
This Zacks Rank #5 (Strongly Sell) stock has declined 8.3% in the past year compared with the industry’s fall of 0.4%.
The Zacks Consensus Estimate for Skechers’ current financial-year earnings and sales indicates growth of 16.3% and 10.5%, respectively, from the year-earlier reported levels. SKX has a trailing four-quarter average earnings surprise of 34.1%.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.2%, respectively, from the year-ago reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 20.9% and 5.9%, respectively, from the prior-year actuals.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
GameStop's (GME) Preliminary Results Highlight Soft Q1 Sales
GameStop Corp. (GME - Free Report) has released preliminary financial results for the first quarter of fiscal 2024, highlighting a tumultuous period for the retailer, with a significant drop in sales and strategic financial maneuvers. According to the report, net sales for the quarter are expected between $872 million and $892 million, suggesting a stark decline from the $1.237 billion reported in the prior-year quarter. This drop reflects the ongoing challenges within the retail sector and shifts in consumer behavior affecting GameStop.
Cost Management & Loss Reduction
On a promising note, the company has managed to reduce its selling, general and administrative expenses (SG&A), which are projected between $290 million and $300 million, suggesting a dip from the $345.7 million reported last year. This indicates an aggressive approach to cost management, likely a response to the declining revenues.
Furthermore, GameStop expects the net loss for the quarter to narrow to $27-$37 million, suggesting an improvement from the net loss of $50.5 million reported in the prior-year quarter. This reduction in losses could be seen as a positive outcome of the company's ongoing restructuring efforts.
Image Source: Zacks Investment Research
Strategic Share Offering
In an important strategic move, GameStop announced the potential sale of up to 45 million class A shares.
The decision to issue additional shares follows a turbulent period in the stock market, wherein GameStop's shares have been highly volatile. After a recent spike in the share price, attributed partly to the resurgence of interest from meme stock enthusiasts, the company's stock price experienced a sharp decline, falling 19.7% during the trading session on May 17.
Market Reaction & Forward Outlook
As the market reacts to these developments, the impacts of the additional share offering and the ongoing adjustments in GameStop's business strategy are closely monitored. Investors are particularly attuned to how these changes might stabilize the company's financials and influence its stock price in an increasingly unpredictable retail environment.
Wrapping Up
GameStop's fiscal first-quarter preliminary results depict a company navigating through significant challenges but taking decisive steps to stabilize its financial health. The planned share offering, while dilutive, could provide the necessary capital to support GameStop's transformation in a rapidly evolving market. As the company continues to adjust its strategy, the coming quarters will be critical in determining its long-term viability and ability to return to profitability.
This Zacks Rank #5 (Strongly Sell) stock has declined 8.3% in the past year compared with the industry’s fall of 0.4%.
Stocks to Consider
Some better-ranked stocks are Skechers U.S.A., Inc. (SKX - Free Report) , The Gap, Inc. (GPS - Free Report) and Abercrombie & Fitch Co. (ANF - Free Report) .
Skechers designs, develops, markets and distributes footwear for men, women and children. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Skechers’ current financial-year earnings and sales indicates growth of 16.3% and 10.5%, respectively, from the year-earlier reported levels. SKX has a trailing four-quarter average earnings surprise of 34.1%.
The Gap is a premier international specialty retailer offering a diverse range of clothing, accessories and personal care products. It has a Zacks Rank #2 (Buy) at present.
The Zacks Consensus Estimate for GPS’s current fiscal-year earnings and sales indicates declines of 0.3% and 4.2%, respectively, from the year-ago reported figures. GPS has a trailing four-quarter average earnings surprise of 180.9%.
Abercrombie is a specialty retailer of premium, high-quality casual apparel. It currently has a Zacks Rank of 2. ANF has a trailing four-quarter average earnings surprise of 715.6%.
The Zacks Consensus Estimate for Abercrombie’s current fiscal-year earnings and sales indicates growth of 20.9% and 5.9%, respectively, from the prior-year actuals.