What to Expect from GameStop’s Quarterly Earnings Report
Introduction
GameStop (GME) is set to release its quarterly financial results after the closing bell on Tuesday, September 10th. Analysts are predicting lower revenue, a slightly larger net loss, and a decline in comparable store sales compared to the second quarter of fiscal 2023.
Projected Financials
According to estimates compiled by Visible Alpha, analysts project GameStop’s revenue to decline to $900 million from $1.16 billion in the same quarter a year ago. The video game retailer is also expected to post a net loss of $5.3 million, up from the $2.8 million loss in the second quarter last year. However, this net loss is significantly smaller than the $32.3 million loss reported in the first quarter.
It’s worth noting that GameStop unexpectedly released its first-quarter results early, which were posted before markets closed rather than after the bell as expected.
| Analyst Estimates for Q2 2024 | Q1 2024 | Q2 2023 | |
| Revenue | $900 million | $881.8 million | $1.16 billion |
| Diluted EPS (loss) | (1 cent) | (11 cents) | (1 cent) |
| Net Income (loss) | ($5.25 million) | ($32.3 million) | ($2.8 million) |
Key Metric: Comparable Store Sales
One of the key metrics to watch in GameStop’s earnings report is comparable store sales. After a rise of just over 2% in the second quarter last year, analysts expect a significant drop of nearly 23% year-over-year when GameStop reports on Tuesday.
This decline in comparable store sales aligns with the trend seen in other retailers, where spending on discretionary items, such as video games, has decreased. Many Americans are facing higher prices for essentials and are searching for the best value before making a purchase.
Business Spotlight: Stock Stability
GameStop’s stock had a tumultuous first half of 2024, largely due to the meme stock trend and the influence of Keith Gill, also known as “Roaring Kitty.” However, the stock has experienced much less volatility in recent months.
The retailer issued millions of new shares earlier this year, which contributed to a calmer stock performance. Additionally, GameStop announced plans to convert some of its stores into “retro” locations, focusing on selling older consoles and games, tapping into the concept of nostalgia among gamers.
Despite the stock’s stability, GameStop shares have risen more than 25% this year, but they are still well off the highs seen in May and June.
Conclusion
As GameStop prepares to release its quarterly earnings report, analysts are expecting lower revenue, a slightly larger net loss, and a significant decline in comparable store sales compared to the same period last year. However, the stock has shown more stability in recent months after a volatile first half of 2024. Investors will be closely watching the results and any updates on the retailer’s strategic initiatives, such as the conversion of stores into “retro” locations.
