Tag: Inc. (WBA)

AMZN Enters the Dow: What It Means for Investors and the Market

Posted on by The INO.com Team

The Dow Jones Industrial Average (DJIA), often referred to as the Dow, is one of the most enduring and esteemed price-weighted indices, overseeing 30 prominent publicly traded companies listed on both the NYSE and the NASDAQ.

Throughout its history, the Dow has functioned as a reliable gauge of the overall health of the U.S. stock market and economy. The companies featured in the Dow are often regarded as stalwarts in their respective industries.

However, over the past years, the absence of a few major tech giants within the index has led to its downfall. As the S&P 500 takes the lead, questions have been raised on Dow’s ability to correctly capture the essence of Artificial Intelligence’s (AI) impact on the U.S. economy.

In 2023, the Dow recorded a 13.7% increase, whereas the S&P 500 saw a 24.2% surge. Looking at year-to-date performance, the S&P 500 has risen by about 7%, compared to the Dow's increase of over 2%.

The performance gap between the indexes can be largely attributed to the S&P 500's heavier focus on big tech stocks, which have emerged as significant market winners. The anticipation surrounding the Federal Reserve's potential shift from rate hikes to cuts, coupled with the AI frenzy, propelled tech stocks to unprecedented heights last year.

Out of the few major big tech players, namely Alphabet Inc. (GOOGL), Amazon.com, Inc. (AMZN), Apple Inc. (AAPL), Meta Platforms, Inc. (META), Microsoft Corporation (MSFT), and NVIDIA Corporation (NVDA), only two tech titans MSFT and AAPL were included in the Dow up until last month.

However, considering the Dow’s lagging performance compared to the S&P 500 and its lack of exposure to big tech stocks, in a recent bold move to revitalize its performance and embrace the tech wave, Dow replaced pharmaceutical retailer Walgreens Boots Alliance, Inc. (WBA) with e-commerce giant, AMZN. Among the 30 blue chip companies listed in the Dow, AMZN holds the 17th position by weight.

But What Led to AMZN's Inclusion Into the Dow?

AMZN's inclusion in the Dow Jones index can be attributed to a three-for-one split implemented by Walmart, Inc. (WMT), also in the Dow. Companies within the Dow are weighted according to their stock price. Therefore, WMT's stock split, which effectively reduces its price and thereby its weight within the index, necessitated a rebalancing. Consequently, the Dow opted to incorporate AMZN into its listing.

S&P Dow Jones Indices indicates that this adjustment mirrors the evolving landscape of the American economy, which is expected to amplify consumer retail exposure alongside other business sectors within the Dow. Beyond AMZN's retail aspect, its addition to the Dow could elevate the index's performance, propelled by AMZN's increasing influence in the tech sector.

Commanding a market cap of over $1.80 trillion, AMZN has spread its wings across various industries over the past few years. While renowned for its remarkable retail operations, its substantial advancements in the entertainment landscape through Amazon Prime Video, Amazon Music, Prime Gaming, and Twitch underscore its versatility and impact.

Moreover, the company has also achieved notable progress in the tech space, particularly with its Amazon Web Services (AWS) segment, capitalizing on the surge in demand for Cloud and AI services. According to Statista, AWS generated $90.80 billion with its cloud services in 2023.

Additionally, buoyed by a record-breaking holiday shopping season, AMZN witnessed solid year-over-year growth in both its topline and bottom-line figures in the final quarter of 2023. Meanwhile, its AWS segment, which recorded a net sale of $24.20 billion, was more profitable than analysts had predicted and accounted for 14% of AMZN’s overall revenue in the same quarter.

With AMZN’s focus on fortifying its foothold in the realm of AI, the company, during the fourth quarter, launched the Q chatbot for developers and nontechnical corporate workers, alongside unveiling its partnership with chip kingpin NVDA to provide cutting-edge infrastructure, software, and services, aimed at supporting customers' advancements in generative AI.

On the earnings call, AMZN’s CEO Andy Jassy emphasized that generative AI remains a focal point for AMZN, with ongoing dedication and investment. He highlighted its potential to revolutionize numerous customer experiences and processes, foreseeing it as a significant driver of tens of billions of dollars in revenue for AMZN in the coming years.

Bottom Line

Despite the Dow lagging behind the S&P 500 index, inclusion in the Dow serves as a clear signal to investors, analysts, and the financial media, indicating a company's status as a stalwart of the American economy.

That being said, AMZN’s inclusion among the top 30 blue-chip companies comes as no surprise, considering the company’s strong financial prowess, relentless success, and diverse portfolio spanning retail, entertainment, and technology.

In addition, AMZN's robust financial performance in its last reported quarter, along with its recent partnerships with industry giants such as NVDA and product launches to fortify its position in the realm of AI, underscore its potential for further expansion and innovation.

Looking forward, Wall Street is buzzing with high expectations for the company’s fiscal first-quarter earnings, forecasting an impressive 11.9% year-over-year revenue climb to $142.48 billion, alongside a remarkable 171.6% year-over-year EPS surge to $0.84.

Furthermore, driven by AMZN’s competitive advantages, including its strong positions in logistics, e-commerce, and cloud computing, Wall Street projects the company to achieve revenue growth close to 10% by 2028. Street also anticipates slight increases in its EBITDA margin, reaching 21.2% by the end of 2028, and predicts AMNZ's market cap will reach $3 trillion over the next five years.

With such bullish sentiment echoed by analysts for the company’s future prospects coupled with its inclusion in the prestigious Dow index, institutional investors are flocking to AMZN shares, with 2,532 holders ramping up their stakes, reaching a total of 312,340,167 shares. Moreover, 428 institutions have taken new positions (32,292,371 shares).

This surge in institutional investment speaks volumes about the growing confidence in AMZN's future prospects. In light of all the encouraging aforementioned factors, AMZN emerges as a compelling investment opportunity.

3 Stocks Benefiting From Rite Aid (RAD) Bankruptcy

Posted on by The INO.com Team

The public health crisis has considerably reshaped the landscape of the retail pharmacies and drug store industry. Despite significant supply chain disruptions and staffing shortages, the industry has seen a surge in demand due to the increasing need for remote medical services and patient care.

Mail-order pharmacies are experiencing growth, driven mainly by the rising prevalence of telehealth and remote monitoring services. In response to these changes, many retail industry players utilize digital technology to diversify their offerings beyond traditional brick-and-mortar stores. This shift has presented unique opportunities for industry heavyweights, investing strategically to simplify patient access to prescription and maintenance medications.

However, numerous challenges have weighed down these positives, including inflation, labor shortages, unfavorable drug pricing, reimbursement issues, and lawsuits facing the industry.

Among those significantly impacted is pharmacy giant Rite Aid Corporation (RAD). The company is preparing to file for Chapter 11 bankruptcy due to its considerable $3.30 billion debt as of June 3, 2023, and repercussions arising from pending litigation accusing it of contributing to the opioid epidemic through relaxed prescription policies for potent painkillers.

The company also faces adversity from the United States Justice Department, which sued RAD in March for purportedly filling 'unlawful prescriptions for controlled substances.' Officials have criticized the pharmaceutical retailer for disregarding "obvious red flags" related to potential misuse of prescribed medicines, including oxycodone and fentanyl.

As of June 3, 2023, RAD operated 2,284 pharmacy locations, representing a decline from previous years. The company closed 239 outlets since 2021, of which 145 came in 2022 and the remaining 27 in the last quarter ending June 3, 2023.

In its bankruptcy proceedings, RAD considers closing 400 to 500 stores out of more than 2,100 and transferring the remainder to creditors or willing buyers. Notwithstanding, a group of bondholders has preferred an even higher number of store closures, with discussions ongoing on the final count.

The company has been struggling with challenges beyond the opioid lawsuits as it seeks a path to profitability. For the fiscal first quarter that ended June 3, 2023, its revenues dropped 6% year-over-year to $5.65 billion. Its net loss nearly tripled from $110.19 million in the prior year quarter to $306.72 million.

RAD’s pharmacy services segment, Elixir, contributed to the overall loss. The pharmacy services segment revenues stood at $1.20 billion for the quarter, a decrease of 30.7% compared to the prior-year quarter.

The decrease in revenues was primarily the result of a reduction in Elixir Individual Part D Insurance membership due to a change in the company’s pricing structure and loss of commercial clients, partially offset by increased utilization and higher drug costs.

Shares of RAD plunged by about 50% after reports unveiled that the drugstore chain is preparing to file for Chapter 11 bankruptcy. This marked its largest-ever intraday fall and the culmination of a significant decrease from over $26 at the beginning of 2021 to below $1, where it has remained for nearly a month. The stock has declined 81.1% year-to-date to close its last trading session at $0.59.

RAD’s poor financial health has pushed many institutional holders to adjust their RAD stock holdings. Institutions hold roughly 34.5% of RAD shares. Of the 163 institutional holders, 88 have decreased their positions in the stock. Moreover, 50 institutions have sold their positions (1,512,808 shares), reflecting dwindling confidence in the company.

Furthermore, for the fiscal year 2024, the company anticipates its net loss between $650 million and $680 million, while adjusted net loss per share is expected to be between $4.29 and $4.78.

Given this backdrop, let’s look at three other stocks which could benefit from RAD’s bankruptcy:

Walmart Inc. (WMT)

WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S.; Walmart International; and Sam’s Club.

WMT was exploring the purchase of a majority stake in ChenMed, a value-based care organization of more than 125 primary care clinics in 15 states focused on treating older adults.

Given WMT’s ambitious growth goals for its healthcare operations, expanding its reach with value-based care makes sense. This could lead to greater engagement with patients, payers, and providers while broadening the payment models in which the companies participate.

WMT’s board of directors approved an annual dividend for the fiscal year 2024 of $2.28 per share. The annual dividend would be paid in four quarterly installments of $0.57 per share.

The annual dividend translates to a 1.40% yield on the current price. Its dividends have grown at 1.8% and 1.9% CAGRs over the past three and five years. Its four-year average dividend yield is 1.60%. WMT has increased its dividend in each of the past 49 years. This reflects its shareholder payment abilities.

WMT’s revenue grew at CAGRs of 5.2% and 4.3% over the past three and five years, respectively. Its EBITDA grew at 3.3% and 2.7% CAGRs over the same period. Also, its EBIT grew at CAGRs of 4.6% and 3.4% in the same time frame.

WMT’s trailing-12-month ROCE, ROTC, and ROTA of 17.87%, 10.60%, and 5.50% are 58.5%, 63.7%, and 28.1% higher than the industry averages of 11.28%, 6.48%, and 4.30%, respectively. Its trailing-12-month cash from operations of $37.80 billion is significantly higher than the $505 million industry average.

WMT’s total revenues for the fiscal second quarter that ended July 31, 2023, increased 5.7% year-over-year to $161.63 billion. The company’s adjusted operating income rose 8.1% over the prior-year quarter to $7.41 billion.

In addition, its consolidated net income attributable to WMT increased 53.3% over the prior-year quarter to $7.89 billion. Also, its adjusted EPS came in at $1.84, representing an increase of 4% year-over-year. As of July 31, 2023, its long-term debt stood at $2.90 billion, compared to $4.19 billion as of January 31, 2023.

Analysts expect WMT’s revenue and EPS for the fiscal third quarter ending October 2023 to increase 4.5% and 0.6% year-over-year to $158.28 billion and $1.51, respectively. The company surpassed the consensus revenue and EPS estimates in each of the trailing four quarters, which is impressive.

The stock has gained 14.5% year-to-date to close the last trading session at $162.35.

Moreover, ownership data indicates institutional holders have a significant interest in WMT, accounting for approximately 34% of WMT shares. Of the 3,041 institutional holders, 1,381 have increased their positions in the stock. Moreover, 168 institutions have taken new positions (4,947,591 shares), reflecting confidence in the company’s trajectory.

Walgreens Boots Alliance, Inc. (WBA)

The Illinois-headquartered integrated healthcare, pharmacy, and retailing company WBA has recently partnered with Pearl Health, a pioneering tech platform for primary care physicians within value-based care setups.

The collaborative endeavor aims to enable community-based primary care practitioners to oversee value-based care within ACO Reach, Medicare’s accountable care scheme. Beginning in 2024, the objective is to broaden the initiative to encompass Medicare Advantage, potentially including commercial payers and Medicare in the future.

Should this partnership flourish, WBA could reap substantial benefits of wider retail opportunities and reduced reliance on fee-for-service volumes. Furthermore, WBA's offering of ancillary services, such as prescription fulfillment, medication adherence, immunizations, care gap closure, and diagnostic testing, complement this collaboration. They will also work alongside providers to aid patients transitioning from hospital environments to home-based recuperation.

As such, WBA strategically positions itself as the preferred ally for healthcare providers and systems eager to transition to value-based care and bolster community well-being. It will be worthwhile to monitor the speed at which this alliance progresses and its effects on patient referrals and hospital partnerships.

On September 12, WBA paid a quarterly dividend to its shareholders of 48 cents per share. It pays an annual dividend of $1.92 that yields 9.09% on the current market price, higher than the 4-year average dividend yield of 4.54%.

WBA’s revenue grew at CAGRs of 2.7% and 1.2% over the past three and five years, respectively. Its total assets grew at CAGRs of 4.5% and 7.1% in the same time frame.

WBA’s trailing-12-month asset turnover ratio of 1.42x is 56.4% higher than the industry average of 0.91x. Its trailing-12-month cash from operations of $1.30 billion is 158.4% higher than the $505 million industry average.

For the fiscal third quarter that ended May 31, 2023, WBA’s sales rose 8.6% year-over-year to $35.42 billion, with its U.S. Retail Pharmacy segment sales increasing 4.4% from the year-ago quarter to $27.90 billion. Its net earnings attributable to WBA and net earnings per share came at $118 million and $0.14, respectively.

As of May 31, 2023, WBA’s long-term debt stood at $8.84 billion, compared to $10.62 billion as of August 31, 2022.

Analysts expect WBA’s revenue for the fiscal first quarter ending November 2023 to increase 6% year-over-year to $35.38 billion. Its EPS is expected to come at $0.92 for the same quarter. The company surpassed the consensus revenue estimates in each of the trailing four quarters and EPS in three of the trailing four quarters.

Moreover, ownership data indicates institutional holders have made changes in WBA stock holding. Institutional holdings account for approximately 58.4% of WBA shares. Of the 1,315 institutional holders, 554 have increased their positions in the stock. Moreover, 83 institutions have taken new positions (3,286,184 shares), reflecting confidence in the company’s trajectory.

Wag! Group Co. (PET)

PET develops and supports a proprietary marketplace technology platform available as a website and mobile app that enables independent pet caregivers to connect with pet parents. It offers on-demand access to 5-star pet care, pet insurance options, premium pet products, and expert pet advice.

PET’s trailing-12-month gross profit and levered FCF margins of 74.79% and 41.37% are 111% and 712% higher than the industry averages of 35.45% and 5.09%, respectively. Its asset turnover ratio of 1.93x is 92.4% higher than the industry average of 1x.

For the fiscal second quarter that ended June 30, 2023, PET’s sales rose 55% year-over-year to $19.82 million. Its adjusted EBITDA stood at $107 thousand, compared to negative $875 thousand in the prior year quarter. Moreover, its cash, cash equivalents, and restricted cash for the six months that ended June 30, 2023, stood at $ 24.79 million, up 916.9% year-over-year.

For the fiscal year 2023, PET expects its revenue from $80 million to $84 million.

Analysts expect PET’s revenue for the fiscal third quarter ending September 2023 to increase 27.5% year-over-year to $19.60 billion. The company surpassed the consensus revenue estimates in each of the trailing four quarters.

Changes have been observed concerning institutions' holdings of PET shares. Approximately 54.2% of PET shares are presently held by institutions. Of the 31 institutional holders, 12 have increased their positions in the stock. Moreover, five institutions have taken new positions (99,056 shares).

Bottom Line

The escalating incidence of chronic diseases is boosting demand for healthcare products and medications, propelling growth in the retail pharmacy market. Increasing reliance from individuals for long-term medication management and disease-focused solutions on retail pharmacies underpins this growth momentum.

Technological advancements are expected to improve retail pharmacies' efficiency while attracting more consumers and facilitating market expansion. The global retail pharmacy is expected to reach $1.22 trillion by 2032, growing at a CAGR of 7.1%.

Meanwhile, RAD finds itself in precarious financial straits. Fueled by the few earnings from its regular business operations, the company is grappling with a debt burden of approximately $3.30 billion as of June 3, 2023. With liabilities outstripping assets by roughly $1 billion and only around $135 million cash-in-hand, RAD is at a financial crossroads.

The most viable solution appears to be filing for bankruptcy, enabling management to restructure their debt portfolio and possibly address any pending opioid settlements within one unified process.

Nevertheless, given the industry tailwinds, RAD’s competitors – WMT, WBA, and PET, stand to benefit.

 

Analyzing Walgreens Boots Alliance (WBA) Amid Massive Store Closures

Posted on by The INO.com Team

The fading of the Covid 19 pandemic couldn’t have come sooner for the vast majority of the economy, which is currently reaping the bounty of pent-up demand for the vast array of outdoor experiences that have been restricted for the greater part of the last three years.

However, one of the businesses that can be excused for not being as thrilled is Walgreens Boots Alliance, Inc. (WBA). In October 2022, the company announced a slew of store closures across states, such as New York, Kentucky, Florida, Massachusetts, and Colorado. More recently, WBA announced that it expects to close 150 of its almost 900 locations in the United States and 300 locations in the United Kingdom.

The second-largest pharmacy store in the U.S., which has been around since 1901, missed its earnings estimate for the first time in three years. Moreover, at $118 million, or $0.14 a share, its third-quarter earnings were actually lower compared to $289 million, or $0.33 a share, a year ago.

In addition to muted consumer spending due to a not-so-transitory inflation and borrowing costs which could climb higher by the end of this year, much of this slowdown could be attributed to a pullback in demand for Covid vaccines. Sales of covid vaccines during the quarter plummeted 83% to 800,000, down from 4.7 million in the same period last year.

Given the fading tailwind of covid vaccine demand, the Illinois-headquartered integrated healthcare, pharmacy, and retailing company slashed its full-year earnings guidance to a range of $4.00 to $4.05 per share, down from its previous forecast of $4.45 to $4.65 per share.

CEO Rosalind Brewer said the company is closely watching the end of fiscal stimulus and resumption of student loan payments as potential headwinds that could induce the cautious and value-driven consumer to cut back further on discretionary spending.

Consequently, WBA’s shares slumped 9% following the release. The stock is down 20.5% over the past six months, compared to a 13.3% gain for the S&P 500.

During its second-quarter earnings release, WBA announced its ongoing and long-term transition into a more health-care-oriented company that will involve opening hundreds of doctor’s offices, significant store remodels, and hiring more medical staff. To support the costly transition, the company is “taking immediate actions to optimize profitability” of its U.S. healthcare segment.

CFO James Kehoe told analysts the company will have saved $3.3 billion by the end of this year and is projecting to save “at least” $800 million in 2024. On May 26, WBA announced its decision to slash more than 500 roles or around 10% of its corporate and U.S. office support workforce.

The pharmacist has said that it’s driving further savings by leveraging technology and optimizing its business model to build the “pharmacy of the future” through its micro fulfillment centers, tech-enabled centralization of in-store activities, telepharmacy solutions, and launching initiatives, such as drone delivery.

However, the empowerment of each store to serve broader areas more remotely has come at the cost of a reduction in the total number of locations.

Bottomline

WBA is a company in transition, and transitions, if at all, are seldom linear and painless.

Hence, while the closure of 150 locations is significant, we should be careful not to be denominator-blind and over-react to WBA shedding less than 2% of its 900-strong domestic physical footprint in the interest of morphing from a pharmacist and retailer into a future-ready healthcare service provider.

With Major Retail Stores Closing Down in 2023, What’s Next for These Stocks?

Posted on by The INO.com Team

U.S. domestic consumption has been on a roller coaster ride over the past three years. People have gone from not being free enough to spend practically-free money like there’s no tomorrow.

That, in turn, led to a not-so-transitory inflation, the hottest since the 1980s, forcing the Federal Reserve to implement ten successive interest-rate hikes in a little over a year to take the Fed funds rate to a target range of 5% to 5.25%.

While the consumer price index only grew by 4% year-over-year, which is the slowest in 2 years, the picture wasn’t as optimistic when volatile food and energy prices were excluded. The core CPI was still 5.3% over the previous year, indicating that consumers still find their budgets stretched.
With the stash of stimulus cash fast dwindling, average American consumers have been forced to rein in their urge to splurge to prevent inflation from biting harder. The Survey of Consumer Expectations for April by the New York Fed showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest since September 2021.

This further explains why even a 0.4% recovery in retail sales for April, after two consecutive months of decline, still fell short of Dow Jones’ estimate of 0.8%.

We had discussed earlier the implications of this slowdown for mid-tier retailers and the prospects of the retail industry vis-à-vis travel and hospitality.

Given the fact that legacy retailers such as Bed Bath & Beyond Inc. couldn’t be rescued (and has subsequently filed for Chapter 11 on April 23), and retailers are encouraging gamified shopping on Livestream, we will look at a few embattled retail stocks in the context of the accelerated pace of store closures with the ascent of online retail.

On May 26, the Illinois-headquartered integrated healthcare, pharmacy, and retailing company Walgreens Boots Alliance, Inc. (WBA) announced its decision to slash its corporate staff by about 10% in an effort to streamline operations.

The second-largest pharmacy store in the United States has been around since 1901. However, the financial hardships it has faced during the pandemic resulted in lost market share, which the retailer has begun clawing back with acquisitions of healthcare services operator VillageMD and urgent-care provider Summit Health and the launch of initiatives, such as drone delivery.

However, the empowerment of each store to serve broader areas more remotely has come at the cost of a reduction in the total number of locations. In October, the company announced a slew of store closures across states, such as New York, Kentucky, Florida, Massachusetts, and Colorado.

WBA’s stock has lost more than 22% of its value over the past six months, relative to an almost 9% gain for the S&P 500 over the same period.

Diversified health solutions company CVS Health Corporation (CVS) has been busy aligning itself with the pandemic-catalyzed trend of patients using digital technologies to manage their health. To this end, the retailer has acquired the well-known home healthcare agency Signify Health to further its medication delivery reach.

However, this reorganization has also been accompanied by store closures. While the economic stagnation caused by the pandemic caused CVS to lose over 20 stores towards the end of 2021, the company has since decided to proactively close 300 locations each year for the next three years as it hones in on digital strategy and implements a "new retail footprint strategy aligned to evolving consumer needs."

With the strategic realignment yet to bear fruit, store closures in Pennsylvania, North Carolina, Maryland, California, Florida, Texas, and Georgia, among other states, have also been accompanied by around 29% slump in CVS’ stock price, compared to 9% gain for the S&P 500.

The muted retail outlook discussed earlier has also been reflected in the first quarter earnings of Macy's, Inc. (M). Although the mid-tier retailer surpassed its earnings estimates for the quarter, a spring pullback has caused it to miss its revenue estimates and slash its top- and bottom-line guidance for the entire year.

Moreover, in February 2020, the retailer announced its three-year restructuring plan, pursuant to which it had decided to close 125 of “its least productive stores.” With closures in 2020, 2021, and 2022, M has, in the words of CEO Jeff Gennette, begun its ‘final stretch’ of store closures with four stores: one each in Los Angeles, California; Fort Collins, Colorado; Gaithersburg, Maryland; and Kaneohe, Hawaii.

Given the prevailing demand softness in the unfavorable macroeconomic environment, M expects sales of $22.8 billion to $23.2 billion for the year, down from a previous range of $23.7 billion to $24.2 billion, while expected earnings per share of $2.70 to $3.20 is a major reduction from the previous guidance of $3.67 to $4.11.

M stock has plummeted by around 24% over the past six months, compared to the S&P500’s 9% gain over the same period.
Games and entertainment retailer GameStop Corporation (GME) was at the center of an unprecedented hype created by retail investors on social media forums when money was practically free, and inflation was ‘transitory.’

The hype created by an army of amateur traders in 2021 had less to do with the fundamentals of the company and more to do with the excitement of trading and a desire to short-squeeze professional speculators who were betting against it.

With online gaming more a norm than an exception, GME, which has been around since the 1980s, has seen a dramatic decrease in sales, resulting in many stores closing down and the company’s decision to transition into an exclusively online retailer.

In the fiscal first quarter that ended April 29, GME reported revenue of $1.24 billion, down from $1.38 billion in the year-ago period. Sales in the United States, Canada, and Australia dropped by 16.4%, 18.5%, and 8.9%, respectively, compared to the year-earlier period. This coincided with CEO Matthew Furlong's sudden firing and Ryan Cohen's appointment as executive chairman.

Since many e-commerce platforms offer viable alternatives for purchasing merchandise and hardware sold by the company, it is unclear how GME, with its own platform and fleet of e-commerce stores, would be able to differentiate itself from other players in this space and find its path to profitability.