GameStop released its Q1 earnings report on Friday, earlier than expected, which included an earnings miss and showed continued sharp declines in sales.
Sales declined 29% to $881.8 million in Q1 2024, compared to $1.2 billion in Q1 2023. That was much worse than the nearly 20% sales decline the chain experienced in the holiday quarter (see “GameStop Sales Down Nearly 20%“).
Sales in GameStop’s Collectibles category were the bright spot, only down 21% to $136.8 million, from $173.0 million in the year ago quarter. The Collectibles category includes tabletop games (the chain carries four brands, some in considerable depth), some board games, and merch (see “Channel Check – GameStop“).
The chain recently started buying graded Pokemon TCG and Yu-Gi-Oh! TCG cards from its brick-and-mortar locations, to be sold on the website (see “GameStop Buying High Grade Cards“).
Despite the sharp sales decline, GameStop did manage to reduce its losses to $32.5 million, from $50.5 million in Q1 2023.
The GameStop meme stock phenomenon is once again predominant for investors, with online media driving wild gyrations in the stock price. The company is taking advantage of recent increases in its price to raise cash at a good valuation, announcing plans Friday to sell 75 million shares at the market price, which would raise over $2 billion at Friday’s closing price. Last month, the company announced raising $933.4 million by selling 45 million new shares.
The stock dropped nearly 40% on Friday, after the disappointing earnings, the announcement of the dilutive stock sale, and an underwhelming response to a mid-day livestream by Keith Gill, known online as Roaring Kitty, the day trader whose posts drove the initial short squeeze in GameStop’s stock.
Source: ICV2
