June 4, 2019
GameStop, the world’s largest video game retailer, June 4 reported first-quarter (ended May 4) net income of $6.8 million, which was down almost 76% from income of $28.2 million in the previous-year period.
Revenue fell 13.3% to $1.54 billion, from $1.78 billion a year ago.
New hardware sales decreased 35%, with an increase in Nintendo Switch sales more than offset by a decline in Xbox One and PlayStation 4 console sales.
New software game sales decreased 4.3%, driven by weaker new title launches in the quarter compared to last year. Accessories sales increased 0.6% on the continued strength of controller sales.
Pre-owned game sales fell 20.3%, reflecting declines in hardware and software. Digital receipts decreased 6.7% to $255.4 million, driven by weaker title launches in the quarter compared to last year.
Meanwhile, collectibles sales increased 10.5% to $157.3 million, with continued growth of trend items in both domestic and international stores.
New CEO George Sherman, who joined the company in April, said he has been taking a “thorough” review of the business to improve operational and financial performance, address challenges and execute both “deliberately and with urgency.”
Indeed, to enhance organizational structure, GameStop May 30 announced the hiring of Frank Hamlin as chief customer officer and Chris Homeister as chief merchandising officer. The chain also hired James Bell as CFO. All three report to Sherman.
“We believe we will transform the business and shape the strategy for the GameStop of the future … driven by our go-forward leadership team that is now in place, a multi-year transformation effort underway, a commitment to focusing on the core elements of our business that are meaningful to our future, and a disciplined approach to capital allocation,” Sherman said in a statement.