GameStop warns of big sales drop; 30 stores extensively damaged in recent unrest
GameStop Corp. said it expects first-quarter sales to drop by as much as a third as the majority of its stores were shuttered due to the pandemic.
The videogame retailer also said it has temporarily closed approximately 90 U.S. stores that were previously reopened to protect the safety of employees and customers amid “recent social unrest.” Approximately 30 the locations will be closed for the foreseeable future due to extensive physical damage.
GameStop said it expects global sales to fall 33% to 35% in the quarter ended May 2, down from $1.5 billion in the year-ago period. Same-store sales are expected to fall 30% to 31%.
Net (loss) income is expected to be in the range of ($172) million to ($162) million compared to approximately $6.8 million in the prior year.
At the end of May, approximately 85% of the company’s U.S. locations were open to limited customer access or curbside delivery, and approximately 90% of its international locations open.
"Despite the disruption caused by the pandemic, we are pleased to see our strategic investments in omnichannel capabilities allow us to deliver on the increased demand for gaming, entertainment and remote work products," said CEO George Sherman. "Our Buy Online Pickup in Store capabilities enabled many of our stores to safely open for contactless curbside pickup.”
The retailer noted that the U.S.-based stores with l curbside pickup were able to meet or exceed their sales plans during the second half of the quarter, “which is a true testament to our ability to fully capitalize on both our omnichannel capabilities and our leadership position in gaming,” Sherman said.
GameStop operates approximately 5,300 stores across 14 countries.