GameStop (GME) To Post Q1 Earnings: What Awaits The Stock?

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GameStop Corp. (GME - Free Report) is likely to register top-line growth when it reports first-quarter fiscal 2021 numbers on Jun 9, after the closing bell. The Zacks Consensus Estimate for revenues is pegged at $1,170 million, which indicates an increase of 14.6% from the prior-year quarter’s reported figure.

Speaking of the bottom line, the company is expected to report a loss for the quarter in review. The Zacks Consensus Estimate is currently pegged at a loss of 56 cents per share. The consensus mark has remained stable in the past 30 days. In the prior-year quarter, the company reported a loss of $1.61 per share. In the last reported quarter, the company’s bottom line outperformed the Zacks Consensus Estimate by 8.2%.

Key Aspects to Note

GameStop’s top line during the first quarter is expected to have gained from growth in e-commerce sales. The company’s online wing is gaining from investments made toward boosting omnichannel capabilities that includes the roll-out of same-day delivery option across stores. Also, its expanded search and navigation features, post-purchase services, mobile app capabilities as well as flexible payment options have been supporting digital expansion. Additionally, increased demand for consoles, owing the company’s transition from generation eight to generation nine console gaming products, has been fueling online sales.

Apart from these, the company’s strategic efforts to boost assortments, optimize inventory and manage costs are likely to have supported first-quarter performance. Markedly, the company is focusing on high-margin product categories such as PC gaming accessories, private label, and collectibles.

On Apr 5, 2021, management provided details regarding its sales performance for the nine-week period ended Apr 3, 2021. Month-wise, with respect to sales in February (for the four-week period ended on Feb 27, 2021) total global sales increased approximately 5.3% year on year. In March (for the five-week period ended Apr 2, 2021), total global sales increased approximately 18% year on year.

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