GameStop ups store closings

GameStop puts more locations on its store closings list.

The world’s largest video game retailer told analysts on its quarterly earnings call that it’s on track to close about 400 to 450 stores worldwide during its current fiscal year, which is more than the 320 stores GameStop said in March that it was planning to shutter. (At the end of the quarter, GameStop had 5,122 locations worldwide, 602 fewer than to last year.)

“These closures, along with the growth in our online business and expanded omnichannel capabilities will allow us to more efficiently and profitably service our customers," GameStop CFO Jill Bell said on the call.

Bell added that there are “more to do” (meaning store closings) in 2021 as well.

GameStop’s net sales fell 26.7% to $942.0 million in the quarter ended Aug. 1, with the decline reflecting the impact of a 13% reduction in total store operating days amid the pandemic and a reduction in the retailer’s store base. Analysts had expected revenue of $1.01 billion. 

Comparable store sales declined 12.7%, adjusting for fewer store operating days due to store closures. Global E-commerce sales surged 800%, accounting for 20% of total sales.

GameStop reported a loss of $111.3 million, or $1.17 a share, compared with a loss of $415.3 million, or $4.15 a share, in the year-ago quarter. The adjusted loss of $91.2 million, or $1.40 per share, was much higher than the $32 million shortfall, or 32 cents per share, a year ago. Analysts had expected an adjusted loss per share of $1.13. 

GameStop was struggling before the pandemic. Its sales have been on the decline in recent years as more game revenue goes digital. But hardware remains a key component and two hotly awaited new consoles – PlayStation 5 and Xbox Series X – are set to launch in time for the holiday season.

“While the ongoing pandemic continues to create a somewhat uncertain environment in the short term, we are very pleased by the consumer response at GameStop to the few recent video game product introductions and we believe we are ready, with expanded service and payment options, to handle the expected surge in demand and participate in a very significant way in the console launches later this year,” stated GameStop CEO George Sherman.