GameStop, known for its popularity among retail investors, reported its second-quarter earnings after the bell Wednesday, and as expected, it doesn't look good.
Losses per share were $0.38, up from $0.21 in the same quarter last year, while net sales were $1.136 billion for the quarter, down from $1.183 billion last year.
In addition, the company's inventory was $734.8 million at the close of the quarter. This is compared to $596.4 million at the close of last year’s second quarter. On the one hand, high levels of inventory can be a drag on earnings, but the company said it reflects a desire to maintain in-stock levels amid persistent supply chain issues.
One potential upshot: The company's expenses were 14.3 percent lower than the first quarter of this year, which it said reflects a focus on "right-sizing costs following a period of significant investment in long-term initiatives."
One such long-term initiative is a pivot into the cryptocurrencies and digital assets.
In line with the earnings release, GameStop also announced a new partnership with crypto exchange FTX. "The partnership is intended to introduce more GameStop customers to FTX’s community and its marketplaces for digital assets," the company said in a press release. "In addition to collaborating with FTX on new ecommerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores."
The company also touted the fact that the sale of collectibles, which it "intends to grow over the long-term," were $223.2 million for the quarter, compared to $177.2 million in the same quarter last year. This follows GameStop's launch in July of a non-fungible token (NFT) marketplace to capitalize on growing interest in digital collectibles.
The report caps off an eventful quarter for the retailer. Chief Financial Officer Michael Recupero stepped down in July, and soon after the company announced a round of layoffs to bring down costs.
More recently, GameStop board chair Ryan Cohen was named in a lawsuit alleging that he was involved in a "pump and dump" scheme with Bed Bath & Beyond executives. The home goods retailer, which Cohen previously had a 10 percent stake in, is currently reeling from the suicide of its Chief Financial Officer Gustavao Arnal, who was also named in the lawsuit.
Despite the downbeat report, GameStop shares were up 10 percent in after hours trading.
Updated September 9, 2022 at 2:30 p.m. ET to fix capitalization of GameStop in the headline.