Financial Performance

GameStop Hardware Sales Jump 45% in Q4

Strong demand for Nintendo Switch, PS4 Pro, and Xbox One X consoles powered the retailer's 12.2% gain in same-store sales.
Matthew HellerMarch 29, 2018

GameStop’s revenue beat analysts’ estimates for a fourth straight quarter on strong demand for hardware, particularly the Nintendo Switch console.

The world’s largest video game and gaming console retailer reported a 12.2% jump in same-store sales, topping the average estimate of a 9.32% rise.

Total global sales increased 15.0% to $3.50 billion, with sales in GameStop’s core video game retail business rising 12.4% to $1.04 billion and sales in its hardware business leaping nearly 45% to $844 million.

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Only the smaller Technology Brands division struggled, posting a 14.2% decline in sales to $219.7 million, primarily reflecting a change in AT&T’s dealer compensation structure.

“Our strong sales performance over the holiday period and throughout the fourth quarter was driven by compelling Black Friday and holiday promotions, driving growth in hardware, particularly the Nintendo Switch,” CEO Michael Mauler said in a news release.

On an earnings call, he also cited demand for the PS4 Pro and the Xbox One X consoles. “Software also increased as we improved to be the destination of choice for customer to purchase video game software for the holidays, as well as strong title launches like Call of Duty: World War II and new software for Nintendo Switch,” he added.

GameStop’s pre-owned business was down nearly 5% in 2017 compared to the prior year but Mauler said he expects Nintendo Switch components and games “will work their way into our pre-owned ecosystem in the near future.”

“Only 30 percent of our customers trade-in games, so this presents a big opportunity” for pre-owned growth, he noted.

As far as Technology Brands, Mauler said AT&T is “a good partner and we are in discussions with them to improve the compensation plan. Both partners want the other to succeed and I believe we will find improvements that will be a win-win for both companies.”

GameStop reported a net loss of $105.9 million, or $1.04 per share, in the fourth quarter but excluding items, it earned $2.02 per share, beating analysts average estimate of $1.97 per share.