December 8, 2020
GameStop, the world’s largest video game retailer, Dec. 8 reported a 30% decline in third-quarter (ended Oct. 31) revenue to $1 billion, from $1.4 billion during the previous-year period. Same-store sales from about 2,000 stores dropped 24.6%, due in part to a 11% decline in stores operating.
GameStop attributed the declines to a seven-year gap in new game consoles, coupled with the ongoing pandemic and mandated store closings earlier this year. The chain saw a 257% increase in global e-commerce sales, representing more than 18% of total net sales and nearly 25% year to date. Due to reduced operations and overhead costs, the retailer narrowed its net loss nearly 78% to $18.8 million from a net loss of $83.4 million.
“We begin the fourth quarter with unprecedented demand in new video game [PlayStation 5, Xbox Series X and Series S] consoles that launched in November, which drove a 16.5% increase in comparable store sales for the month, despite being closed on Thanksgiving Day and the impact of [pandemic] related store closures, which affected most of our European footprint,” CEO George Sherman said in a statement.
CFO Jim Bell anticipates, for the first time in many quarters, that the current fourth quarter will include positive year-on-year sales growth and profitability, reflecting the introduction of new gaming consoles, elevated omni-channel capabilities and continued benefits from cost and efficiency initiatives.
“Over the past 18 months, we have remained steadfast in focusing on creating a more efficient business model,” Bell said. “These efforts, despite the impacts of a global pandemic, have led to a stronger balance sheet.”