What Happened: GameStop reported second-quarter revenue down 26.7% year over year to $942 million. Lower store base and lower store operating days contributed to same-store sales down 12.7% in the second quarter.
“The second quarter saw strong progress toward our strategic initiatives, fueling an 800% increase in global e-commerce sales, a $133.7 million reduction in SG&A and a significant improvement in our balance sheet with $735.1 million in cash at quarter-end,” CEO George Sherman said.
Quarterly losses of $1.40 per share missed the analyst consensus estimate by 37 cents.
Why It’s Important: E-commerce growth of 800% year over year was the bright spot in the quarter and represented 20% of total net sales. GameStop was able to see 90% fulfillment rates within 24 hours of customer orders.
“We believe the actions we are taking to optimize the core operations of our business by increasing efficiencies and creating a frictionless digital ecosystem to serve our customers, wherever and whenever they choose to shop,” Sherman said.
What’s Next: Consoles from Sony Corporation (NYSE:SNE) and Microsoft Corporation (NASDAQ:MSFT) are coming in the fall, which could bring additional customers to GameStop stores. Microsoft announced a digital-only version called the Xbox Series S that could hurt game sales from physical retailers like GameStop.
GameStop shares closed Wednesday down 5% to $7.33. Shares were trading down another 11.7% in the after-hours session at $6.49.