GameStop braces for first earnings since Reddit ruckus, YouGov says numbers may not impress

YouGov PLC (LON:YOU) is one among the many mid-caps and small caps announcing results on Tuesday, with the online market researcher putting out numbers for the six months to end-January.

The company, whose shares rose over 50% last year and are up sevenfold over the past five, said back in a January update that investors should not to expect too much in these results, with most of its revenue growth and profit margin delivery likely to be weighted towards the second half of its financial year.

YouGov said it performed well during the period with underlying revenue growth across its three divisions, led by Data Services amid strong demand for more “tactical, fast turnaround projects”.

Following the recent acquisition of sports research agency Charlton Insights in Canada, broker Peel Hunt was looking to hear more, as this addition “should further support the growth of its Sports syndicated products, which have been growing very fast since the acquisition of SMG Insight back in 2018”.

GameStop’s new start?

Meanwhile, over in the US Reddit favourite GameStop Corp (NYSE:GME) will announce quarterly results on Tuesday, with its shares down 45% from January’s higher but still around 1,000% higher than at the start of the year.

Some might argue that the day-traders of Reddit’s WallStreetBets don’t really care about the financial fundamentals of the stumbling video games retailer, it’s more about the battle with short-selling hedge funds.

But for those that do, Wall Street analysts are forecasting earnings and revenues for the three months to end-January to be higher than this time last year.

Earnings per share are seen coming in at US$1.46, according to the Street consensus, up 15%, on revenues 2% higher at US$2.2bn.

While in its recent annual report, GameStop painted a gloomy picture for the future of bricks-and-mortar games retailing, saying it “may take significant time and resources” to respond to the moving of games purchases through digital channel, this month the company recruited major investor Ryan Cohen to join a strategic-planning committee to “identify initiatives that can further accelerate the company’s transformation”.

Cohen, the co-founder of online pet products retailer Chewy, has been known to move the company’s shares by tweeting pictures of ice cream cones or tog dogs, so harnessing his powerful influence seems a start.

This week will see if the GameStop frenzy has further legs.

UK unemployment numbers

The latest set of UK jobs figures on Tuesday will continue to provide an incomplete picture of the UK labour market with the furlough scheme still in place

UK unemployment is expected to rise to 5.2% in January after creeping up to 5.1% in December, and to continue rising until at least early next year, as job losses often do even as economies emerge out of recession.

The Office for Budget Responsibility recently tweaked its economic projections for unemployment down from a peak of 7.5% to 6.5% earlier this month but based on optimism around the rollout of COVID-19 vaccines, the reopening of schools and the staggered re-opening of other sectors from mid-April, number crunchers at Capital Economics reckon “the bulk of the falls in employment may now be behind us”.

Rather than rising to a peak of 6.5% as the OBR and many others are forecasting, Capital Economics now thinks the unemployment rate will peak at just over 6.0% early next year.

The claimant count is the more timely element of the ONS labour market report, so will show if much changed in February after hitting 2.6mln last time around. This measure shot up much faster than the headline unemployment figure but largely stopped rising in August.

It’s still worth keeping track of the monthly jobless claims numbers, says market analyst David Madden at CMC Markets, as he says these a much more accurate reflection of the labour market. They fell to 7.2% in January, down from 7.4% in December.

Significant announcements for Tuesday March 23:

Finals: Alliance Pharma PLC (LON:APH), Arrow Global Group PLC (LON:ARW), Cambridge Cognition Holdings PLC (LON:COG), DP Eurasia NV (LON:DPEU), Elementis plc (LON:ELM), Energean PLC (LON:ENOG), Ergomed PLC (LON:ERGO), H&T Group Plc (LON:HAT), Henry Boot PLC (LON:BOOT), Judges Scientific PLC (LON:JDG), Longboat Energy Plc (LON:LBE), LoopUp Group PLC (LON:LOOP), Luceco PLC (LON:LUCE), M.P. Evans Group PLC (LON:MPE), Mortgage Advice Bureau Holdings PLC (LON:MAB1), Old Mutual Limited (LON:OMU), Personal Group Holdings PLC (LON:PGH), The pebble Group PLC (LON:PEBB), Zotefoams PLC (LON:ZTF)

Interims: YouGov PLC (LON:YOU), Essensys PLC (LON:ESYS), MJ Hudson Group PLC (LON:MJH)

Economic data: UK unemployment, UK CBI industrial trends

Story by ProactiveInvestors