Video game retail empire GameStop has reached the end of the financial year with a disappointing shortfall in expectations.
The closing bell was not kind to the household name across the United States and would signal a shortfall of $432 million in net sales compared to the previous trading year.
GameStop has a drop in sales
Almost half a million drop in net sales compare for the previous trading year (net sales were $1.794 billion for the fourth quarter, compared to $2.226 billion in the fourth quarter of last year) was not the only unfavorable result of this financial year for the storefront.
After the closing bell, GameStop stock would take another 17% drop, with the share price falling to $12.81 and now sitting at $11.53. Shares for the company in 2024 have reached $16.69, but this is now recovering from an all-time low this week, down to $11.28.
The Company will also issue a Securities and Exchange Commission (SEC) 8K recording which would announce the departure of the current Chief Operating Officer (CEO) of the company.
CEO Nir Patel would be part of a severance deal with the games retailer, and the filing said:
“On April 4, 2024, GameStop Corp. (together with its subsidiaries, the “Company”) and Nir Patel, Chief Operating Officer, entered into a Separation Agreement and Mutual Release of Claims (the “Separation Agreement”). Separation Agreement provides for Mr. Patel's departure from the Company, effective April 4, 2024, as the Company's Chief Operating Officer.
Customary Separation Agreement Rules and Requirements
Other members of the company's management team are absorbing the responsibilities associated with the position. The Separation Agreement contains a customary general release of claims by Mr. Patel and the Company. It provides for the following: (i) a lump sum payment to Mr. Patel consisting of (a) ten weeks of base pay, (b) an amount equal to the applicable premiums for two months' COBRA continuation coverage, and (c) thirty percent of the remaining unearned portion of the sign-on bonus of Mr. Patel and (ii) accelerating the vesting of thirty percent of the portion of Mr. Patel's equity awards that were otherwise scheduled to vest in the ordinary course during the six-month period immediately following his separation date.”
So the retailer has had a financial year to forget, and it was a costly one with the departure of the current CEO, but absorbing Patel's responsibilities will undoubtedly mean new faces for the role, and the company too I would hope for a new path forward for fiscal 2025 results.
Featured image credit: Eva Bronzini; Pexels
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