GameStop has revealed that they’re expecting to report a net loss within the ranges of $162 to $172 million for the months of February, March, and April 2020. This is due to the coronavirus (COVID-19) pandemic, as well as growing civil unrest.
It’s important to note that these projections are a preliminary report that the company has made ahead of their official Q1 financials. Official Q1 financials will be made available on Tuesday the 9th of June for the period ending on the 2nd of May 2020.
The Q1 net loss that is projected for this year is a stark contrast to the company’s Q1 2019 financials, which saw income of $6.8 million.
GameStop cites the losses as the result of the temporary shutdown of 79 percent of their 1,802 stores around the world. In particular, every single store in the US, of which there are 3,526, have been shut down throughout March and April due to the coronavirus.
GameStop was told to close all stores in March, but they attempted to have some continued operations in certain states. These stores were quickly found and forced to close in accordance with lockdown rules.
In Australia and New Zealand, stores were allowed to remain open and operational. This drove sales in the region of 35 percent, which is comparable to last year’s Q1 financials.
Stores began to reopen towards the end of April. By May, 85 percent of US stores were operational, and 90 percent of international stores were open as well.
GameStop has noted that the protests in the US over the killing of George Floyd by police has led to 90 stores being closed up once again. 30 of these stores have been so badly damaged that they’ll be remaining closed for the foreseeable future.
It is expected that total global sales for the company will be down between the ranges of 33 and 35 percent from $1.5 billion in 2019. Comparable store sales are expected to be down by 30 to 31 percent. Store sales, excluding those that are closed, are expected to be down by 16 to 17 percent.
Finally, GameStop predicts that hardware sales will hold a larger percentage of their overall store sales compared to software and accessories.