GameStop Corp. posted a surprise profit for the fourth quarter and surpassed revenue expectations as the videogame retailer trimmed costs and reduced headcount, sending its shares more than 32% higher in extended trading.
The company has been shoring up its online sales capabilities in a bid to transform into a digital behemoth from its current mainstay of brick-and-mortar stores.
GameStop has also been targeting profitability by reining in expenses and focusing on higher-margin collectibles and pre-owned product categories. Its selling, general and administrative costs fell by about 16% in the quarter.
The retailer posted an adjusted profit of 16 cents per share, compared with Wall Street expectations for a loss of 13 cents.
The stock, which is popular among retail investors, lost about half its value last year and has declined 4% so far this year.
Net profit for the quarter ended Jan. 31, GameStop's first in eight quarters, was $48.2 million, compared with a loss of $147.50 million a year earlier.
It reported quarterly revenue of $2.23 billion, compared with analysts' average estimates of $2.18 billion, according to Refinitiv.
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