We knew that video games have been booming during the COVID-19 era of stay-at-home orders, but now we know how GameStop has fared through all of it.
The company, which has been in the midst of a turnaround effort, was one of the retailers hit hard due to store closures this spring and faced criticism for its handling of employee safety and claims of being an “essential retailer” during the early weeks of the pandemic.
During the company’s first-quarter earnings report, GameStop reported that comparable same-store sales fell 17% for stores that were able to remain open in some capacity this year. When factoring in the stores that closed, total sales for the first quarter declined more than 30% to $1.02 billion compared to $1.54 billion last year.
As the shutdown in the U.S. and beyond spread, GameStop was able to offset some declines by a shift to a “Delivery@Door” curbside pickup model in some locations. The big win came in digital sales which grew more than 500%.
“During this unprecedented time, our priority is focused on ensuring the safety and well-being of our employees, customers and business partners as we continue the process of opening our stores as restrictions are lifted, in our ongoing effort to meet our customers’ needs,” says GameStop CEO George Sherman. “We are proud of our team’s ability to quickly adapt to meet the increased demand for our product offerings. As the pandemic spread, we leaned in on our upgraded omnichannel capabilities to fulfill customer orders through curbside pick-up where available, we reduced discretionary spending and enhanced our liquidity while continuing to advance our strategic priorities. While we delivered a loss for the quarter in total, our performance included total sales just shy of our original expectations, even as stores closed due to the COVID-19 pandemic and key video game titles shifted to the second and third quarters, exacerbating the headwind from operating in the final stage of a console cycle. Even more impressive is that our e-commerce sales grew 519% in the first quarter and over 1,000% during the six weeks that our store base temporarily closed to customer access. We believe this reflects the loyalty of the GameStop customer and the confidence they place in us as their preferred place to shop.”
Somewhat surprisingly, the COVID-19 pandemic fueled a spike in current generation consoles that are at the end of their cycle. Sherman believes that the early sell-through on these products benefits the company as it readies to stock next-generation consoles such as Playstation 5 and Xbox Series X and their accessories later this year.
