Retailer GameStop has released its latest earnings report, and it was a record-breaker for the company. The Texas-based retailer’s biggest number for its fiscal Q2 quarter that ended August 1 was $160.2 million. That’s how much GameStop made in operating income for the period, and it was the highest Q2 operating income level since the company went public in 2002.
Net income was up, too, reaching $298.7 million, compared to $168.6 million last year.
GameStop benefitted from continued growth in its biggest sales category–collectibles–which saw net sales jump a whopping 57% year-over-year to $356.3 million. For this latest period, collectibles made up 45.1% of GameStop’s net sales.
GameStop was once primarily known as a video game retailer, and while it still sells games, consoles, and accessories, the company’s biggest revenue-driver today is collectibles. Anyone who has walked into a GameStop store recently can attest to how much shelf space is dedicated to collectibles.
GameStop’s next-largest revenue-driver was its “video game” category, which reached $263.2 million for the period, down sharply from $494.6 million during the same period last year that benefitted from the Switch 2 launch. Finally, GameStop’s pre-owned and refurbished business made up $170.7 million during the period, down from $250 million last year.
Some might have thought that Sony’s decision to end support for physical game discs, and GTA 6 not releasing on a disc, would be a death knell for a company like GameStop. However, physical video game sales are “irrelevant” to the company, CEO Ryan Cohen has said. He has also suggested GameStop could expand its business into the “live commerce” category that is popular on TikTok. The executive has also discussed the possibility of GameStop becoming a marketplace for re-selling digital gaming items.
While GameStop’s operating profit jumped, net sales for the company overall fell from $972.2 million in Q2 last year to $790.2 million this year. GameStop said the decreases was primarily attributable to the launch of the Switch 2 last June, an event that benefitted GameStop. The downturn in overall revenue was also attributable to store closures and GameStop getting out of its business operations in France, the company said. GameStop’s share price tumbled after the report came out.
GameStop also scaled back selling, general, and administrative (SG&A) costs during Q2 this year, with those expenses reaching $187.1 million, compared to $218.8 million during the same period last year.
GameStop is forecasting even rosier times ahead, projecting $650 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for its fiscal year ending January 30, 2027. That’s up from a previous forecast of adjusted EBITDA of $600 million.
In another move, GameStop is trying to buy the auction site eBay, but so far, its proposals have been rejected buy eBay’s board. GameStop owns more than 43 eBay shares, worth about $4.9 billion today.
