Net sales increased by 25.1 percent at GameStop during the first fiscal quarter to $1.28 billion from $1.02 billion, according to the company’s Q1 2021 financial report.
Hardware made up 55.1 percent of those sales, bringing in $703.5 million, with software and collectables pulling in the remaining $397.9 million (31.2 percent) and $175.4 million (13.7 percent), respectively.
The company, which also named former Amazon veterans Matt Furlong and Mike Recupero as its new CEO and CFO, said it overcame a nearly 12 percent reduction in its global store base due to strategic de-densification efforts and continued store closures across Europe resulting from the COVID-19 pandemic.
The report highlights a gross margin of 25.9 percent, a decline of 180 basis points compared to the fiscal 2020 first quarter. It also reveals GameStop made a net loss of $40.8 million in Q1 2021 compared to a loss of $108 million in Q1 2020, with an adjusted operating loss of $21.6 million compared to a loss of $98.8 million over the same period.
Looking ahead, GameStop indicated it may offer and sell up to 5 million shares of common stock and use the proceeds for “general corporate purposes as well as for investing in growth initiatives” — though it noted the sale of any shares would depend on a number of factors including market conditions.
“GameStop is continuing to suspend guidance at this time; however, it believes total net sales is the most appropriate metric to evaluate performance at this time,” concluded the company. “The Company’s second quarter sales trends continue to reflect momentum, with May total sales increasing approximately 27 percent compared to last year.”