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GameStop shares fell more than 5% in extended trading on Wednesday, after the video game retailer reported that its losses widened in the fiscal third quarter.
The video game retailer reported that its net loss grew to $105.4 million, or $1.39 per share, from a loss of $18.8 million, or 29 cents per share, a year earlier.
At least some of those losses are coming from bulked up inventory. GameStop said in a news release that it increased inventory to $1.141 billion at the close of the quarter, compared with $861 million at the close of the year-ago period as it gears up for the holidays and copes with supply chain challenges.
Total revenue grew to $1.30 billion from $1.00 billion a year earlier. The company said its sales grew as it expanded relationships with brands, including Samsung, LG, Razer and Vizio.
GameStop is one of the companies that has gotten fresh attention from investors, thanks to Reddit posts and the meme stock frenzy. Shares of the company have soared, along with other meme stocks including AMC and Bed Bath & Beyond. That attracted the scrutiny of the U.S. Securities and Exchange Commission, prompting the regulatory body to request documents about trading activity.
As GameStop tries to transform from brick-and-mortar chain into more of an e-commerce retailer, it has tapped a slate of new leaders. It enlisted Chewy co-founder Ryan Cohen to lead the company’s turnaround as chairman on the company’s board. He shook up top management by hiring former Amazon executives, Matthew Furlong, and Mike Recupero, as CEO and COO, respectively.
The Grapevine, Texas-based company said it has opened new offices in Seattle and Boston to draw talent in the tech hubs.
As of Wednesday’s close, GameStop shares are up 825% this year. Shares closed Wednesday at $173.65, down 2.34%. The company’s market value is $13.28 billion.
Read the company’s press release here.
This story is developing. Please check back for updates.