GameStop has made a comeback, reporting its first profitable quarter in two years. The video game retailer raked in a net income of $48.2 million in the fourth quarter of the fiscal year that ended January 28, a significant improvement from the net loss of $147.5 million it suffered the previous year.
Despite this positive outcome, the company's net sales were down to $2.226 billion from $2.254 billion in the same quarter of the previous fiscal year, and its net sales for the year were also down, from $6.011 billion to $5.927 billion. Additionally, GameStop's inventory also decreased, from $915.0 million to $682.9 million.
But all is not lost, as the retailer did see an increase in cash and cash equivalents to $1.391 billion, up from $1.27 billion in the previous year. GameStop CEO Matt Furlong credits the economic rebound to cost-cutting measures implemented throughout the last year, including layoffs and increased sales of collectibles such as apparel, figurines, and toys.
Furlong went on to say that GameStop will prioritize the long-term growth of collectible sales, especially the wildly popular Funko Pops. Looking ahead, the company plans to continue its financial success by cutting excess costs, particularly in Europe, where it has already closed several stores. However, it remains in debt with France over an unsecured term loan associated with the country's response to the COVID-19 pandemic.
GameStop's recent turnaround is a promising sign for the retailer, as it adapts to changes in the industry and explores new avenues for growth. The company's focus on cost-cutting and increasing collectible sales seems to be paying off, and it will be interesting to see how it continues to evolve in the coming months and years.
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