GameStop Q2 Earnings Sees Net Loss Of $111 Million, Stock Drops 4%
The video game retailer GameStop's Q2 earnings are better than they were a year ago, but still missed investor expectations.
GameStop is the biggest video game retailer in the world, but the publicly-traded company has experienced instability in recent years due to shifts in games consumption, particularly the decline of the used game market. The company released its official earnings report for Q2 (June-August in this case) today, and while the numbers aren't quite as dismal as last year, they're still not promising either.
Overall, GameStop reported a net loss of $111 million, compared to $415 million from the same period last year. However, net sales dropped from $1.2 billion to $900 million--a decrease of 26.7%--which can likely be attributed in part to store closures caused by the ongoing coronavirus crisis. There was a 13% reduction in total store operating days due to COVID-19, and a 10% reduction in the overall number of stores. The company did champion a 800% increase in e-commerce sales, which represents 20% of its net sales. The company's stock decreased by more than 4% due to the report.
GameStop made national headlines back in March when the retailer tried to declare itself an essential business, with the company's management ordering staff to resist efforts by authorities to close their stores. GameStop later went back on this claim, closing stores to in-person retail and offering curbside pickup instead. The retailer plans to close more than 300 stores this year. The upcoming launch of the PS5 and Xbox Series X will be a boon to the company in the short-term, but it's still unclear what effect that will have in the long-term.
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