GameStop prepares to shutter even more stores after disappointing second quarter
Gamers look away!
GameStop has announced that it will be closing even more brick-and-mortar locations in the coming year, after a disappointing earnings report.
The company said it is struggling to sell hardware in its stores around the world as more and more games are downloaded digitally if not simply ordered online.
The next round of closures is set to be even more drastic than the shrinkage the company experienced this past year.
The once-vaunted retailer closed 287 stores worldwide over a 12-month period ending this past March.
That round of closures left only 4,000 total stores – a number that is set to dwindle even more. The company has not said how many locations it plans to shutter, but the number is expected to be significant.
The earnings report released Wednesday sent GME stock tumbling – losing 15% in one day. The company is down 7% in just the past month.
The latest report is a far cry from the height of the meme-stock craze, which saw GME’s share value skyrocket on the backs of motivated retail investors.
GameStop stock became a moral war for retail investors fighting against the overwhelming power of institutional investors.
Back in 2021, GME stock soared as lowly day traders put the screws to institutional investors who were caught with their shorts down.
This launched the era of meme-stocks and meme-coins – which are financial investments made not on the soundness of the asset, but done as part of a collection of interested amateur investors.
Earlier this year, one of the champions of GME, internet icon Roaring Kitty, returned to X and attempted to revive the stock battle.
Shares shot up 119% when news hit that Roaring Kitty was back and “hodling” — internet lingo for “holding on for dear life.”
However, that stock sugar rush was short-lived and the company’s stock swiftly crashed back down to baseline.
Now, as GameStop continues on its downward trajectory, those salad days seem long ago.
Revenue for this past quarter – which ended on Aug. 3 – was $798.3 million compared to last year’s $1.16 billion in the same quarter.
GameStop stock value is up 18.5% since the beginning of the year, though some analysts, like Jim Cramer, feel that the roughly $20 stock price is way overinflated.
Executives say that they hope closing underperforming stores will make the overall business more efficient.
