In what makes for a very notable turnaround for the company, GameStop announced a 25% increase in sales to $1.28 billion for their first fiscal quarter that ended on May 1, 2021. Naturally, GameStop’s infamous stock market rally from this year had a part to play, not to mention its pivot to e-commerce as the new company strategy.
GameStop’s financial report also revealed that the company saw a $200 million increase in profit compared to last year.
This is taking into account that all of the company’s European stores were closed due to the COVID-19 pandemic. The company also reported that its Net Loss shrank to $66.8 million from $165.7 million.
The real surprise in the report, however, was that most of the sales were attributed to consoles and other gaming paraphernalia, not games. To be specific, 55.1% of the total sales, equivalent to about $703.5 million, went to hardware, while 31.2%, or $397.9 million, went to software.
It’s difficult to say if this was due to GameStop beginning the sale of PC tech on its platform, but since a significant chunk of sales come from hardware, it’s not out of the realm of possibility.
GameStop has been making sweeping corporate changes to fuel its return to the glory days. The company recently poached a set of executives from Amazon to fill its CTO, CFO, and CGO (Chief Growth Officer) positions. Also, it brought in the co-founder of Chewy, Ryan Cohen, to lead the growth of its new digital store.
If fundamental human resource changes were not enough, the company is also making major infrastructural changes with a newly constructed 700,000 square foot building.
However, many financial analysts believe that GameStop’s prospects are far from promising. If the company’s stock volatility is anything to go by, most of the company’s predicted success is propped up on speculation.
But, as most gamers now download games online, a push for a digital storefront might just be what the company needs to keep itself propped up for the next few years, even though experts think it might be a little too late for the company to take that direction.
With the Covid-19 pandemic winding down ever so slowly, it will be interesting to see if these company-wide changes will bring any fruitful results for GameStop in the near future. Most importantly, it will be interesting to see what the folks at r/wallstreetbets have to say about these results.
GameStop Corp. is an American video game retailer that sells gaming merchandise like game titles, consoles, and accessories through digital and physical formats. It is a Fortune 500 company and owns over 5,000 stores across various countries.