Key facts
- GameStop expects Q2 net sales to range from $780 million to $800 million.
- The decline in sales is attributed to planned store closures and the sale of its France operations.
- The company anticipates net income between $290 million and $310 million for the quarter.
- This includes approximately $238 million in net gains from an eBay derivative asset and equity investment.
- Cash, cash equivalents, and marketable securities are projected to be between $5.05 billion and $5.07 billion.
GameStop announced on Monday that it anticipates a decrease in its second-quarter net sales, projecting a range of $780 million to $800 million. This decline is attributed to strategic decisions including planned store closures and the divestiture of its operations in France. The company's previous year's second-quarter net sales stood at $972.2 million.
Despite the anticipated drop in sales, GameStop expects its net income for the quarter to be between $290 million and $310 million, a significant increase from the $168.6 million reported in the same period last year. This boost in profitability is largely due to approximately $238 million in net gains derived from an eBay derivative asset and equity investment, partially offset by a loss of roughly $75 million on digital assets and related receivables.
The videogame retailer also noted that its cash, cash equivalents, and marketable securities are expected to be in the range of $5.05 billion to $5.07 billion, down from $8.69 billion at the close of the prior year's second quarter. GameStop has been actively pursuing a takeover of eBay, holding a nearly 10% stake in the online auction site, though its proposal has faced skepticism from analysts regarding financing and business overlap. The company is scheduled to release its official second-quarter results on September 8.