Retailer GameStop has reported its earnings for the fourth quarter and full-year for 2020. Q4 showed solid sales, but they weren’t enough to combat the full-year’s lackluster ones.
For the three-month period ending on January 30, 2021, net sales for GameStop were $2.12 billion, down by 3 percent year-on-year. However, net income was up at $80.5 million, almost four times the previous year’s numbers.
Considering the year that the retail industry has had in general, GameStop appears to have done well, all things considered.
For the fiscal year that ended on January 30, 2021, net sales for the company were $5.09, down by 21 percent year-on-year. Of these sales, the company posted a net loss of $215.3 million. This loss is an improvement over 2019 however when the company posted a loss of $470.9 million.
George Sherman, GameStop’s CEO, explained that he is incredibly proud of how staff throughout the company adapted to the challenges that 2020 brought. He added that 2020 was a year in which the de-densification process that the company is going through was accelerated. This saw the company’s retail footprint shrink as stores closed, and further investment come to its e-commerce arm.
Looking at 2021, GameStop expects to see similar financial results as 2020 given the impact of the pandemic. Store closures will also have an impact, though over the course of the year things may begin to look better as the economy recovers worldwide.
No mention of Frank Hamlin resigning as Chief Customer Officer was made in the report, but this has been confirmed by an SEC filing. Regardless, Hamlin is entitled to a severance package of $2.06 million and vesting of equity rewards of stock in GameStop.
GameStop’s stock still hasn’t recovered from the squeeze share prices saw in January. However, prices have begun to rise again, reaching $181.75 at the last check. This would see Hamlin walk away with between $40 million and $76 million in shares in the company.
Hamlin’s primary task was overhauling the in-store experience for GameStop stores. Now though, it appears as if the company is putting more investment into the technologies supporting the online business and overall customer experience wherever purchases are made.
In February 2021, comparable store sales increased by 23 percent year-on-year. This is thanks to the next-gen console launch and sales leading into this year, something that should continue for the next year or so. If GameStop continues to offer a better quality experience across a smaller number of stores and online, it could recover and start posting profits very quickly.