GameStop sales slip as retailer continues exploring a sale
Collectibles and console hardware are bright points as company posts $24.9 million loss in a second quarter where revenues dipped 2.4%
GameStop's challenging 2018 continued today, as the retailer posted sagging sales and a net loss for the quarter ended August 4. While the numbers were in line with the company's guidance and GameStop reiterated its full year forecast of slightly lower sales and at least $3 in adjusted earnings per share, few areas of the business showed improvements year-over-year.
In a statement accompanying the results, GameStop COO and CFO Rob Lloyd pointed out that new hardware, accessories, and collectible sales showed growth, and alluded to tomorrow's release of Spider-Man for the PlayStation 4 kicking off a strong holiday season.
"The anticipation around the upcoming video games across several franchises is extraordinary and we remain well positioned to leverage our industry-leading position to drive growth in the second half," Lloyd said.
The company also provided an update on its exploration of a possible sale, saying it is continuing to evaluate its options.
GameStop executive chariman Dan DeMatteo said, "As our teams prepare for a busy and exciting holiday period, our board of directors, with the support of our financial and legal advisors, continues to conduct a comprehensive review of strategic and financial alternatives, including, but not limited to, a potential sale of the company."
For the second quarter, GameStop reported sales down 2.4% to $1.65 billion, with a net loss of $24.9 million. The Xbox One X, PS4, and Switch were all cited as contributing factors in pushing the retailers new hardware sales up 20.1% year-over-year, but pre-owned sales dropped 9.9%. On the digital front, revenues were down 13.5% to $40.2 million, though GameStop noted that was only due to the July 2017 sale of Kongregate.
As for the company's push to diversify into adjacent markets, it showed mixed results for the quarter. Collectible sales were up 15.7% to $141.7 million, but the Technology Brands division was down 10.3% to $168.9 million, which the company chalked up to a number of store closures since last fiscal year.