All eyes are on GameStop (NYSE:GME) stock, as the video game retailer will report its first-quarter fiscal 2023 earnings in exactly one week, on June 7 after the market close. Earlier this month, CEO Matt Furlong released a letter to shareholders, detailing the company’s plan and focus for the year.
“In fiscal 2022, GameStop’s operating environment dramatically changed due to the onset of inflation, rising interest rates and macro headwinds,” said Furlong. “Rather than stand still, we pivoted to cutting costs, optimizing inventory and enhancing the customer experience.”
That’s exactly what the company has been doing. In Europe, for example, GameStop has placed an emphasis on cutting costs by initiating exits and partial wind-downs. GameStop has also focused on forming partnerships with other retail and gaming companies in order to accelerate efficient top-line growth. To drive revenue, the company has explored building market share in high-margin related businesses, like collectibles and toys.
Now, with earnings coming up, investors will get a preview of GameStop’s cost-cutting efforts. Let’s get into the details.
GME Stock: GameStop to Report Earnings on June 7
For the quarter, analyst have forecasted revenue of $1.358 billion, which would imply a year-over-year (YOY) decline of 1.45% and a quarter-over-quarter (QOQ) decline of about 39%. During the past few years, Q4 has been a strong quarter for GameStop, likely due to the holiday season. This can explain the QOQ decline.
Meanwhile, adjusted net income is expected to be a loss of $36 million, while adjusted EPS is expected to be a loss of 12 cents. Analyst believe that GAAP EPS will be a loss of 15 cents. A year ago, GameStop reported an adjusted net income loss of $158 million and an adjusted EPS loss of 52 cents.
Just as important, if not more important, than earnings is guidance. For the second quarter, analysts have forecasted revenue of $1.155 billion, which reflects YOY growth of 1.67% and a quarterly decline of about 15%. Adjusted net income is expected to be a loss of $62 million, which would equate to an adjusted EPS loss of 21 cents.
For the full year of 2023, analysts believe that revenue will be $5.908 million, down by 0.33% YOY. Adjusted net income is expected to be a loss of $91 million, while adjusted EPS is expected to be a loss of 30 cents.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
