Online retailer GameStop has posted disappointing results for the second quarter of the 2018/19 financial year. The company reported that overall sales were down 2.4% to $1.65 billion, with a resulting net loss of $24.9 million.
Though the company reported growth in a few sectors – notably hardware, accessories and collectible sales – the figures are unlikely to cheer shareholders.
GameStop expected a tough 2018 – the company forecast lower sales this year and $3 in adjusted earnings per share – but the poor performance in Q2 is still likely to be a concern, particularly as the company continue to seek investment and perhaps even a sale of the business.
GameStop COO and CFO Rob Lloyd was at pains to point out that the picture isn’t all bleak, particularly with the holiday season coming up and packed with a raft of highly anticipated games like Red Dead Redemption 2, Shadow of the Tomb Raider and FIFA 19.
“The anticipation around the upcoming video games across several franchises is extraordinary,” Lloyd said, “and we remain well positioned to leverage our industry-leading position to drive growth in the second half.”
As regards the long-term future of GameStop, executive chairman Dan De Matteo noted that the board “continues to conduct a comprehensive review of strategic and financial alternatives, including, but not limited to, a potential sale of the company.”`
Going forward the company will doubtless hope to build on two apparent areas of success in Q2. While hardware sales can often be outside of the control of businesses – the 20.1% year-on-year increase in GameStop hardware sales reflects the ongoing success of the Nintendo Switch, Xbox One X and PS4 – collectibles are an area GameStop have prioritised in recent months and 15.7% year-on-year growth has been the reward.
Nonetheless, drops in pre-owned sales, the Technology Brands division and, perhaps most alarmingly, digital sales, indicate that this is a challenging period for GameStop.