GameStop sees Q2 sales drop, loss widen; partners with crypto exchange
GameStop Corp. is taking a big step in cryptocurrency as its fiscal performance wobbles.
The videogame and electronics retailer reported net sales of $1.14 billion for the second quarter of fiscal 2022, down 3% from $1.18 billion in the prior year’s second quarter. Net loss grew to $108.7 million from $61.6 million.
However, in a more positive development, GameStop reported that sales attributable to collectibles, which is a segment the company intends to grow over the long-term, were $223.2 million for the quarter, up 26% from $177.2 million in the prior year’s second quarter.
In addition, inventory was $734.8 million at the close of the quarter, compared to $596.4 million at the close of the prior year’s second quarter, which GameStop said reflects its focus on maintaining adequate in-stock levels to meet customer demand and offset lingering supply chain headwinds. GameStop also implemented SAP enterprise systems.
GameStop enters cryptocurrency partnership
In its latest step toward becoming what GameStop Matt Furlong publicly termed a “customer-obsessed technology company” in a March 2022 earnings call, the retailer has entered into a partnership with cryptocurrency exchange FTX U.S. According to GameStop, the partnership is intended to introduce more of its customers to FTX’s community and its marketplaces for digital assets.
In addition to collaborating with FTX on new e-commerce and online marketing initiatives, GameStop will begin carrying FTX gift cards in select stores. During the term of the partnership, GameStop will be FTX’s preferred retail partner in the United States. The financial terms of the partnership are not being disclosed.
GameStop’s new cryptocurrency initiative follows its July 2022 launch of a beta version of an online platform where consumers and creators can buy, sell and trade NFTs, which are unique digital assets stored on a blockchain ledger that certifies the owner. There is no way for an NFT to have more than one owner, and only the certified owner can sell it.
The new NFT marketplace (nft.gamestop.com) is a non-custodial, Ethereum Layer 2 blockchain-based platform that enables users to own their digital assets, which are represented and secured on the blockchain. The marketplace also allows users to connect to their own digital asset wallets such as the recently launched GameStop Wallet.
Over time, GameStop says its NFT marketplace will expand functionality to encompass additional categories such as Web3 gaming, more creators, and other Ethereum environments.
Other notable activities during the second quarter included the company firing its CFO, Mike Recupero, who joined the company in June 2021. Recupero, the fifth person in four years to serve as GameStop CFO and a former Amazon executive, was replaced in the role by chief accounting officer Diana Jajeh. At the time it dismissed Recupero, GameStop also made corporate layoffs across its departments.