GameStop Q4 Profit Skyrockets, Driven by E-Commerce
March 23, 2021
GameStop on March 23 disclosed fiscal results for the fourth-quarter, ended Jan. 30, which saw net income skyrocket 391% to more than $80 million, from a profit of $21 million in the prior-year period.
The increase was driven by a 175% rise in e-commerce sales, which represented 34% of net sales in the quarter versus 12% of in the previous-year quarter. Same-store sales increased 6.5%.
GameStop, the nation’s largest video game retailer, has been on a rollercoaster ride this year, the result of being in the crosshairs of third-party speculators manipulating the company’s stock price based little on actual performance and more on mob rule.
Revenue in the quarter dropped less than 4% to $2.122 billion, compared with $2.194 billion last year, reflecting an operating environment that included a 12% decrease in the store base due to the company’s “de-densification” efforts and a reduction of approximately 27% in European store operating days during the quarter in response to the COVID-19 pandemic. The company wound down operations in Denmark, Finland, Norway and Sweden.
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For the fiscal year, GameStop narrowed its fiscal loss nearly 55% to $215 million, from a loss of $471 million in 2019. Revenue declined more than 21% to $5.09 billion, from $6.5 billion.
“I am proud of how our entire organization came together in 2020 to adapt to the challenging pandemic environment, effectively serve our customers’ demand for gaming and entertainment products, and navigate through the year with strong liquidity and a strengthened balance sheet,” CEO George Sherman said in a statement.
Sherman said the retailer is off to a strong start in 2021, with same-store sales up 23% in February, led by global hardware sales.
“Our emphasis in 2021 will be on improving our e-commerce and customer experience, increasing our speed of delivery, providing superior customer service and expanding our catalog,” he said.