GameStop Expects $170 Million Q1 Loss, 35% Sales Decline Due to COVID-19

GameStop June 5 jumped ahead of fiscal bad news, announcing preliminary results for the first quarter (ended May 2). The world’s largest video game retailer said it expects to post a fiscal loss of $170 million for the period, compared to a loss of $6.8 million in the previous-year period.

Global sales are expected to drop upwards of 35% to $975 million from $1.5 billion in the prior year fiscal quarter. Comparable store sales are expected to decrease about 30% to 31%. Excluding stores that were closed as a result of the COVID-19 pandemic, comparable store sales are expected to decline from 16% to 17%.

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GameStop expects hardware sales to be a larger percentage, and software sales to be a smaller percentage, of total sales in the first quarter of fiscal 2020 compared to the prior year fiscal quarter.

GameStop was hit hard by the coronavirus, with about 76% of the chain’s 1,802 international stores temporarily closed beginning in March. On March 22, the company temporarily closed all 3,526 of its U.S. locations — with about 65% of the locations conducting a limited curbside pickup offering. During the final six-weeks of the fiscal quarter, about 10% of stores worldwide remained fully open and accessible to customers; about 42% remained open for limited curbside delivery and 48% remained fully closed.

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“Despite the disruption caused by the pandemic, we are pleased to see our strategic investments in omni-channel capabilities allow us to deliver on the increased demand for gaming, entertainment and remote work products,” CEO George Sherman said in a statement.

GameStop officially reports Q1 results on June 9.

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