GameStop (NYSE:GME) had a merry Christmas after all as the video game retailer reported comparable sales in its physical stores rose almost 5% during the nine-week holiday period, and online sales more than quadrupled.
The company also said it was expanding its board of directors from 10 to 13 members, appointing three directors recommended by RC Ventures, the activist investor that has increased its stake in GameStop to about 13%, making it one of the video game retailer's largest shareholders.
Playing the long game
While GameStop's total sales actually declined 3.1% for the period, that was due to 11% of its stores having either been closed permanently or shut down temporarily because of the COVID-19 pandemic. Store traffic toward the end of December was particularly impacted by the coronavirus outbreak, which ended up hurting sales by high-single-digit to low-double-digit percentage points.
Even so, the retailer cited "unprecedented demand" for new gaming consoles from Microsoft and Sony as the reason for its big sales lift.
RC Ventures, which is managed by Ryan Cohen, previously excoriated GameStop for its business practices and is demanding the retailer sell most of its stores, keeping only the most profitable.
Cohen said he feared GameStop would justify maintaining the status quo because of the bounce it received from the video game console upgrade cycle.
The three new directors have expertise in e-commerce, online marketing, finance, and strategic planning. They will serve on GameStop's board until the June annual shareholder meeting, when they will stand for election alongside the rest of the video game retailer's slate.