GameStop sales took another sharp drop in its most recent quarter ended August 3, but its $4.2 billion cash hoard served it well, turning an operating loss into a small profit due to interest income.
Sales were down 31% from $1.164 billion in the same quarter a year ago to $798 million this year, even worse than the 29% drop in the company’s fiscal first quarter (see “GameStop Worse than Expected”).
As was the case last quarter, sales in the collectibles category, which includes tabletop games and merch, held up the best; sales were down 18% to $139.4 million in the quarter. Software sales took the biggest hit, with a 48% decline, and hardware and accessories were down 24%.
The company showed an operating loss of $22 million, worse than the $16.6 million operating loss a year ago. After interest and taxes, GameStop showed a $14.8 million profit for the quarter. Most of the $4.2 billion in cash on the company’s balance sheet was raised in two offerings earlier this year; demand for the company’s stock continues to be driven by its meme stock status.
Source: ICV2
