GameStop Corp. reported second-quarter sales that narrowly beat analyst’s estimates in its first report since the retail chain ousted its chief executive officer.
Sales rose to $1.16 billion in the quarter ended July 29, the Grapevine, Texas-based company said Wednesday, ahead of the $1.14 billion average projected by analysts. The company reported a loss, excluding certain items, of 3 cents per share, also ahead of expectations.
In June, GameStop ousted CEO Matt Furlong and elevated billionaire Ryan Cohen to chairman. Cohen, founder of online pet food retailer Chewy, acquired a stake in the company in 2020 and has overseen a number of executive shakeups. He’s the largest shareholder with a 12% holding, according to data compiled by Bloomberg.
GameStop has been hobbled by the video-game industry’s rapid shift to online distribution of games from physical discs. The company may have found a temporary reprieve thanks to this year’s lineup of blockbuster titles, such as The Legend of Zelda: Tears of the Kingdom, which sold 18.5 million units in two months. GameStop reported that its game software sales rose 26% in the period.
Still, the long-term outlook is shaky given the industry’s transformation. Console manufacturers Microsoft Corp. and Sony Group Corp. offer versions of the latest Xbox and PlayStation without disk drives.
Earlier this week, Cohen posted on X, formerly Twitter, that “disk drives should be required on consoles.”
In January 2021, GameStop became a so-called meme stock after small investors swarmed to pump up the share price despite its weak long-term outlook, in part to squeeze out hedge funds betting on a price decline. The shares hit a split-adjusted high of $86.89 that month before crashing. They closed Wednesday down 2.5% to $18.75.
Dumb Money, a movie about the stock craze that features Paul Dano and Seth Rogen, begins rolling out in theaters on Sept. 15.
In a note to investors ahead of earnings, Wedbush Securities analyst Michael Pachter said GameStop will be unable to “slow the gradual declines of its new and pre-owned software businesses in the face of digital, mobile, and subscription threats.”
