By Yasin Ebrahim
Investing.com -- GameStop (NYSE:GME) said it would focus on accelerating its digital transformation after reporting fourth-quarter results that fell short of Wall Street expectations.
The company reported a Q4 non-GAAP EPS of $1.34 on revenue of $2.12 billion compared with consensus estimates for EPS of $1.35 on revenue of $2.21 billion.
Comparable store sales grew 6.5%, compared with consensus for a 4.7% rise and a 24% decline in the prior quarter.
Gross margin declined 610 points from the prior-year period, driven by an expected mix shift toward consoles that carry a lower gross margin, the company said
E-Commerce sales increased 175% and represented 34% of net sales in the fiscal 2020 fourth quarter versus 12% of net sales in the fiscal 2019 fourth quarter.
Shares of GameStop initially rose, then fell 5% in after-hours trading.
GameStop captivated the world's attention earlier after tussle between the short-sellers and retail traders on Reddit intensified.
Since the start of the year, the stock up is up 900%, following several positive updates including the appointment of Chewy Inc (NYSE:CHWY) founder CEO Ryan Cohen to the board and a slew of senior management changes amid a move to speed up the company's transition into technology and e-commerce.
Looking ahead, GameStop said it has made a strong start in 2021 as February comparable store sales increased 23%, led by continued strength in global hardware sales.
"As we look ahead, we are excited by the opportunities that are in front of us as we begin prioritizing long-term digital and E-Commerce initiatives while continuing to execute on our core business during this emerging console cycle. Our emphasis in 2021 will be on improving our E-Commerce and customer experience, increasing our speed of delivery, providing superior customer service and expanding our catalogue,” George Sherman, GameStop’s chief executive officer.