GameStop Q3 Earnings Takeaways: Revenue Up 29% YoY, Inventory Ramp, SEC Subpoena And More

Video game retailer GameStop Corp GME reported third quarter financial results after market close Wednesday.

What Happened: GameStop reported net sales of $1.3 billion in the third quarter, up 29% year-over-year. Revenue beat the consensus estimate of $1.19 billion.

The company credited new and expanded partnerships with brands including Samsung, LG, Razer and Vizio Holding VZIO to helping quarterly growth.

GameStop ramped up its inventory, which was $1.14 billion at the end of the third quarter, compared to $861 million in the prior year’s period. Inventory was increased to meet customer demand and help with supply chain issues as a front-loading method, the company said.

GameStop ended the third quarter with $1.4 billion in cash and only a $46.2 million unsecured term loan related to COVID-19 as debt.

In a 10Q filing, GameStop said it was issued a subpoena by the SEC.

"On August 25, 2021, the SEC issued a subpoena calling for additional documents, as a follow up to the inital request," GameStop said.

The company was subject to a request from the SEC previously on May 26, 2021. GameStop said it's in the process of producting the documents and plans on cooperating fully with the SEC.

Related Link: 5 Most Upvoted Reddit Posts Of 2021: Did GameStop Make The Cut? 

Why It's Important: Third-quarter revenue beat street consensus for the third straight quarter, according to Benzinga Pro. The company reported revenue of $1.28 billion and $1.18 billion in the first and second fiscal quarters, respectively.

GameStop missed analyst revenue estimates for nine straight quarters prior to the now three consecutive beats.

GME Price Action: Shares are down 4% to $166 in after-hours trading. Shares closed down 2% in the regular trading session.

GME shares are up over 840% year-to-date.