GameStop’s quarterly sales drop in surprise early release of results By Reuters

(Reuters) -GameStop reported a drop in net sales and announced a more than $3 billion stock offer as it released its first-quarter report in advance, sending the shares of the video game retailer down over 5% before getting halted for volatility.

The company was set to post results on June 11, but published it on Friday morning, ahead of a highly anticipated livestream from meme stock influencer Keith Gill.

GameStop (NYSE:)’s net sales fell to $881.8 million compared with $1.24 billion a year ago and it missed analysts’ average estimate of $995.3 million, according to two analysts polled by LSEG.

Its net loss narrowed to $32.3 million from $50.5 million a year ago, while its adjusted loss per share of 12 cents was higher than expectations of 9 cents.

GameStop did not respond to a request for more details on its results, which was released four days in advance without giving a reason. It said it would not hold a conference call on Friday.

The company relies on brick-and-mortar stores and has been grappling with customers turning to e-commerce firms for buying video games and collectibles.

„The business model for GameStop is looking increasingly fragile to me, as it relies on people visiting physical stores whereas customers now are more likely to be looking to purchase games and the like online,” said Stuart Cole, head macro economist at Equiti Capital in London.

The company announced plans to sell up to 75 million shares, days after it made nearly $933.4 million by selling 45 million shares.

„They are taking advantage of the recent spike in share price to issue shares, which is a prudent move that takes advantage of the frenzy created by Roaring Kitty,” Wedbush analyst Michael Pachter said.

GameStop has been surging since the social media return meme stock influencer „Roaring Kitty” Keith Gill, who took the markets by storm in 2021.