GameStop Corp. (NYSE: GME) announced financial results for the third quarter. Net sales amounted to USD 1 Billion, a 30.2% fall compared to the same period in fiscal 2019. Global Ecommerce sales increased by 257% as comparable store sales fell 24.6%. The company closed 74 stores to continue to minimize its physical store presence to cut costs and focus more on its digital store.
George Sherman, GameStop’s chief executive officer, said, “Our third quarter results were in-line with our muted expectations and reflected operating during the last few months of a seven-year console cycle and a global pandemic, which pressured sales and earnings. That notwithstanding, we continued to significantly advance our strategic objectives of creating a digital-first, omni-channel ecosystem for games and entertainment and optimizing our core operations. Leveraging our omni-channel capabilities, we increased E-Commerce sales 257% – demonstrating our ability to serve our customers, wherever, whenever and however they choose to shop. Investments in improving our web properties and mobile app and enhanced fulfillment capabilities contributed to our E-Commerce channel’s sales contribution rising to nearly 25% year to date, well-above historical mid-single digit levels. Moreover, as the result of our ongoing optimization of expenses, stores and inventory, we delivered a $316 million reduction in SG&A expenses through the third quarter, ending the period with $603 million cash and restricted cash after repaying $10 million in debt during the quarter, and saw a 33% reduction in inventory compared to the prior year.”
“We begin the fourth quarter with unprecedented demand in new video game consoles that launched in November, which drove a 16.5% increase in comparable store sales for the month, despite being closed on Thanksgiving Day and the impact of COVID-19 related store closures, which affected most of our European footprint. We anticipate, for the first time in many quarters, that the fourth quarter will include positive year-on-year sales growth and profitability, reflecting the introduction of new gaming consoles, our elevated omni-channel capabilities and continued benefits from our cost and efficiency initiatives, even with the potential further negative impacts on our operations due to the global COVID-19 pandemic. Overall, we remain confident in our strategy and look forward to executing in 2021 on the many exciting opportunities to leverage our brand, extensive loyalty member base, and increased digital capabilities to expand our addressable market and product offerings, providing growth in all things games and entertainment,” Sherman concluded.