GameStop Unveils New Share Offering, Announces New CEO/CFO, Sales Below Street High Est.

At the retailer’s annual meeting today, former Chewy exec Ryan Cohen became its chairman and warned excited investors that he isn’t going to unveil a new strategy during the earnings call tonight.

“We are trying to do something that nobody in the retail space has ever done,” Cohen said at the gathering, held in GameStop’s hometown of Grapevine, Texas.

“But we believe we’re putting the right pieces in place and we have clear goals: delighting customers and driving shareholder value for the long term.”

While some investors had hoped Cohen would lay out a detailed plan for turning GameStop around, “that’s not going to happen,” he said.

“You won’t find us talking a big game, making a bunch of lofty promises or telegraphing our strategy to the competition.”

So that doesn't leave much for investors to panic-buy on after the bell from earnings (and the call) except the numbers.

GME announced that today it has appointed Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer.

  • New CEO Matt Furlong most recently was a Country Leader and oversaw Amazon’s Australia business and previously was a Technical Advisor to the head of Amazon’s North America Consumer business.
  • New CFO Mike Recupero spent more than 17 years with Amazon supporting growth across global geographies and product categories. Most recently he was Chief Financial Officer of the North American Consumer business.

Which obviously signals the pivot to e-commerce:

“These appointments reflect the refreshed Board’s focus on building a technology company and investing in growth.”

Then the data hit (notably there is very little analyst coverage for this stock so estimates are a little noisy at best):

  • Net sales grew 25.1% to $1.277 billion, that’s higher than consensus for $1.17 billion but lower than the Street-high which called for $1.24 billion. (but bear in mind that no one was spending anything a year ago so this is not very impressive a jump).
  • Gross margin of 25.9% is a 180 basis point decline from the year prior but slightly better than expectations for 25.8%.
  • Operating loss was $40.8 million compared to $108 million year-over-year.
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