GameStop profit dips 23% in Q2

Retail giant GameStop saw year-on-year profit fall from $40.3m to $30.9m during its fiscal quarter ending July 30th.

Total sales dipped 3.1 per cent to $1.74bn for the quarter from the $1.8bn generated during the same period last year. Digital sales increased 69 per cent.

However, profit before tax and operating expenses was up year-on-year for the period at $543.2m. This is up from last year’s $516.8m. General and administrative expenses rose from $405m to $442.5m for the period.

Pre-owned made up 36 per cent of total sales, while 34 per cent came from new game sales and 16 per cent from hardware. The rest was generated from ‘other’ sales which include digitally downloaded games.

GameStop’s share price fell five per cent after the financial results were released.

The US retail chain recently closed its two UK stores but opened an e-store at GameStop.co.uk.

GameStop’s resilient retail model enabled us to achieve our earnings plan despite a challenging period for the industry,” said GameStop’s CEO Paul Raines. Through the back half of the year, we expect industry software sales to accelerate based on an exciting title line-up.

Meanwhile, the digital and loyalty programs we have brought to market continue to gain traction with consumers and position us as a leading partner with publishers.”

CFO Rob Lloyd added: Continued strength in pre-owned sales, improved gross margins, tight cost controls and capturing a high rate of sales transfers all contributed to our financial results.”