Video game retailer GameStop Corp. reported a net loss for the fourth quarter as it absorbed high costs from supply constraints and also increased spending to turn most of its business towards e-commerce.
The company's net sales rose 6.2 percent to US$ 1.88 billion. Meanwhile, the company posted a net loss of US$ 147.5 million, or US$ 1.94 per share, during the quarter, compared to a profit of US$ 80.5 million, or US$ 1.19 per share, a year earlier.
"The combination of supply chain issues and the Omicron variant had a sizeable impact on last year's holiday season," said Chief Executive Officer Matt Furlong.
Though, the holiday quarter is a moment for the company as Xbox and Playstation are newly launched and demand is high. But component shortages and other supply chain issues afflicting console makers like Sony and Microsoft are affecting GameStop's business.
Like many other retailers, GameStop has suffered as the pandemic wreaked havoc with restrictions leading to store closures. The spread of the Omicron variant further exacerbates the situation.
"Probably lower-than-usual sales of used games and lower-than-usual margins and higher-than-usual hardware sales." said Wedbush Securities analyst Michael Pachter
GameStop has also increased spending to recruit talent, expanded capacity, grew its e-commerce presence and also introduced new products to increase its digital presence.
The company also said it will launch its marketplace for non-exchangeable tokens or NFTs by the end of the second quarter of the 2022 fiscal year.
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