![]() However, from a relatively low-debt, retail-focused company perspective, the meaty portions of controllable costs are with the field teams and locations. This concept may seem somewhat counterintuitive, as each dollar of various costs savings appears to pass directly to the bottom line and each dollar of revenue is muted by the cost of goods sold. And as a traditional retailer, the earnings over time are predominantly dependent on its top line revenues and not as controlled by cost savings, improvements to the cash conversion cycle or changes in the capital structure. ![]() Put briefly, GameStop stock price will ultimately be driven by its future earnings. Sales Cure Allīut as with past catalysts, while they do sometimes drive the near-term narrative and the stock price, the positive significance or meaningfulness of the factors are usually exaggerated. The victory replaced two board members with activist candidates and increased pressure on GameStop’s management to focus more on shareholder return as opposed to the ongoing Reboot Plan. Quick on the heels of these material developments, the second week of the month saw activist investors win their proxy fight at the annual meeting. Some color was provided on asset sales, along with rough guidance and information about costs savings and improved inventory management. At the beginning of June, the embattled retailer announced both its first "COVID-19" quarter results and a $414 million bond exchange offer.ĭuring the Q1 results call, covering February to April, management provided a robust coronavirus update and explanation for its $527 million YoY net sales decline during the period. ![]() The company’s stock remained in the top spot of the NYSE high short interest list as its liquidity concerns continued to grow. The drama continued to heighten for GameStop ( NYSE: GME) during its second fiscal quarter.
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