What happened
GameStop (GME +1.53%) shareholders lost ground to the market this week, with shares falling 16% through early Friday trading compared to a 1.6% decline in the S&P 500, according to data provided by S&P Global Market Intelligence. That move put the video game retailer's stock down over 30% so far in 2022 compared to an 11% drop in the wider market.
It came as investors braced for a potentially weak earnings report in just a few days.
NYSE: GME
Key Data Points
So what
GameStop will announce its fiscal fourth-quarter results on the afternoon of Thursday, March 17. That report will cover the critical holiday shopping season that accounts for a huge portion of the company's annual sales and earnings.
Image source: Getty Images.
Expectations are modest heading into the report. Sure, GameStop should see sales rise about 4% from last year. But that boost would only put the company about where it was in 2019. Annual revenue is still down sharply from its peak back in 2017.
Since then, GameStop has been struggling to find a path toward consistent sales growth as video-game spending shifts online. It likely didn't help that the industry's expansion slowed in late 2021, according to major retailers like Walmart and Best Buy.
Now what
Still, look for the management team to highlight progress in shifting toward e-commerce through late 2021. The stock won't be an attractive investment candidate, though, until GameStop can start showing consistent sales gains while reversing the downward trend in cash flow that has been hurting returns for over five years running.
