A powerful pivot to online business slowed the fall, but wasn't enough to completely offset what can only be described as a very complicated year for GameStop.
The game retail giant reported net sales of $5.09 billion for its financial year ending January 30, 2021, down from $6.47 billion in net sales the year prior. Sliding sales are nothing new to GameStop's reporting; the company is currently in the process of revamping and, hopefully, reinvigorating its business due to the precarious financial position it found itself in over the past few years.
For the 2020 financial year, GameStop says that the year-over-year decrease in net sales could've been worse if not for growth in its e-commerce department, a sector that grew 191 percent year-over-year but still only made up nearly 30 percent of overall net sales.
Meanwhile, the company places the blame for much of that decline understandably on the back of COVID-19 related temporary closures as well as declines due to an ending console generation and the fact that it permanently closed 12 percent of its stores as part of that larger revamp process.
Breaking down net sales by category, hardware and accessories brought in $2.53 billion, up from $2.72 billion the year prior. Software took a significant dip year-over-year, falling from last year's $3 billion to this year's $1.98 billion, while collectibles also declined from $737.5 million to $579.9 million.
All in all, for the full year GameStop reported a $215.3 million net loss during 2020, down year-over-year from a net loss of $470.9 million. However, GameStop does note that it ended 2020 with a stronger balance sheet than the year prior thanks to its revamp efforts (and despite complications from the yet-ongoing pandemic).
GameStop's Q4, however, captured the launch of the current Xbox Series X|S and PlayStation 5 console generation, and saw an upswing in hardware sales potentially as a result. Looking just at Q4 or the 13 weeks ending January 30, 2021, GameStop saw $2.122 billion in net sales, down just slightly from $2.194 billion the year prior.
Once again breaking that down by category, those net sales look like $1.162 billion in hardware and accessories (up from $964.8 million in Q4 2019), $731.2 million in software (down from $984.3 million), and $228.2 million in collectibles (down from $245 million). Net income for the quarter was positive, coming in at $80.5 million compared to $21 million the year prior.
In its earnings call, GameStop remains optimistic about the future. February's numbers alone were up thanks to the emerging console cycle, though the company has still opted to not share a 2021 outlook at this time. Instead, it offers investors a summary of how it plans to continue its business revamp during the year.
In GameStop's words, those next steps are:
- Investing in technology capabilities, including by in-sourcing talent and revamping systems, and evaluating next-generation assets;
- Building a superior customer experience;
- Expanding product offerings;
- Modernizing U.S. fulfillment operations to improve speed of delivery and service;
- Establishing a U.S.-based customer care operation, and;
- Leveraging the Company’s digital assets, including Game Informer and PowerUp Rewards, to increase market share within the growing online gaming community.