New consoles and games bolster GameStop’s profits in Q2
Solid performance of GameStop’s business units, including technology brands, as well as sales of new consoles and games bolstered the company’s profits and overall second quarter results.
Total global sales for the quarter were $1.73 billion, a better-than-expected 25.1% increase from $1.38 billion in the prior year quarter, which reportedly prompted shares to go up 6.2%. Consolidated comparable store sales increased 21.9%.
During the quarter, new hardware sales increased 124.8%, as worldwide demand for Microsoft’s Xbox One and Sony’s PlayStation 4 remains very high. New software sales grew 15.6% driven by the strong performance of recently released new titles, such as Ubisoft’s Watch Dogs and Nintendo’s Mario Kart 8. Each of these categories outperformed the overall market, leading to 200 basis points of total market share gain. The pre-owned/value category saw positive growth of 5.5% for the second consecutive quarter.
Sales in the mobile and consumer electronics category surged 85.1%, led by the ongoing expansion and strong results of Spring Mobile and Simply Mac. The technology brands segment contributed 19% of the company’s second quarter’s operating profit.
Global multichannel sales (mobile, web-in-store, pickup at store, e-commerce) advanced 49.3% as customers utilized all the channels the company offers to purchase video gaming and mobile electronic products.
GameStop’s net earnings for the second quarter were $24.6 million, a 134.3% increase compared to net earnings of $10.5 million in the prior year quarter. Diluted earnings per share were $0.22, a 144.4% increase compared to diluted earnings per share of $0.09 in the prior year quarter.
“The second quarter demonstrates the power of the new console cycle and all of our business units, including technology brands, positively contributing to the company’s sales and profits,” CFO Rob Lloyd said. “The back half of the year is filled with exciting games and products coming to market and I am confident that we are prepared to capitalize on these opportunities.”