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GME Q2 Earnings & Revenues Beat Estimates, Hardware Sales Rise Y/Y

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Key Takeaways

  • GME reported Q2 sales of $972.2M, up 21.8% from last year, topping the $900M estimate.
  • Hardware sales rose 31.2% to $592.1M, while collectibles surged 63.3% year over year.
  • Adjusted EBITDA hit $75.7M, reversing an $18M loss in the prior-year quarter.

GameStop Corp. (GME - Free Report) posted impressive second-quarter fiscal 2025 results, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year. Collectibles and hardware sales improved significantly in the quarter under review. As a result, shares of this leading video game retailer increased 6.6% in the after-market trading session yesterday.

GameStop’s Quarterly Performance: Key Insights

GME posted adjusted earnings per share of 25 cents in second-quarter fiscal 2025, beating the Zacks Consensus Estimate of 19 cents. The company reported adjusted earnings of 1 cent per share in the prior-year quarter. 

GameStop reported net sales of $972.2 million, which surpassed the consensus estimate of $900 million. Also, the metric increased 21.8% from $798.3 million in the year-ago quarter. The increase in consolidated net sales was driven by stronger sales in hardware and collectibles, partly offset by lower software sales.

GameStop Corp. Price, Consensus and EPS Surprise

GameStop Corp. Price, Consensus and EPS Surprise

GameStop Corp. price-consensus-eps-surprise-chart | GameStop Corp. Quote

By sales mix, hardware and accessories sales rose 31.2% to $592.1 million from $451.2 million in the year-ago quarter. Software sales declined 26.6% to $152.5 million from $207.7 million in the year-ago quarter. Sales in the collectibles unit increased 63.3% to $227.6 million from $139.4 million in the year-ago quarter.

By region, United States sales rose 32.8% to $724.6 million from $545.6 million in the year-ago quarter. Australia sales increased 60.5% to $140.9 million from $87.8 million. Europe sales decreased 16.1% to $106.7 million from $127.2 million.

Insight Into GME’s Margins & Expenses

Gross profit increased 13.8% to $283.1 million from $248.8 million in the year-ago quarter. Gross margin contracted 210 basis points (bps) to 29.1% from 31.2% in the prior-year quarter.

Adjusted selling, general and administrative (SG&A) expenses declined 22.1% to $218.4 million from $280.4 million in the year-ago quarter. As a percentage of net sales, adjusted SG&A expenses were 22.5%, down from 35.1% in the year-ago period.

GameStop reported an adjusted EBITDA of $75.7 million against an adjusted EBITDA loss of $18 million in the same quarter last year. 

The company’s adjusted operating income was $64.7 million in the reported quarter against an adjusted operating loss of $31.6 million in the prior-year period.

GME Stock Past Three-Month Performance

Zacks Investment Research
Image Source: Zacks Investment Research

GME’s Financial Snapshot: Cash, Debt & Equity Overview

GameStop ended the fiscal second quarter with cash and cash equivalents of $8.69 billion, net long-term debt of $4.16 billion and stockholders’ equity of $5.18 billion. Net merchandise inventory totaled $484.9 million at the end of the fiscal quarter, down from $560 million in the same period last year.

In the 13 weeks ended Aug. 2, 2025, the net cash flow provided by operations was $117.4 million. The free cash flow for the period totaled $113.3 million, while capital expenditure amounted to $4.1 million.

At the end of the fiscal second quarter, Bitcoin holdings were worth $528.6 million.

In the past three months, shares of this Zacks Rank #3 (Hold) company have lost 17.4% against the industry’s 16.4% growth.

Key Picks

A few better-ranked stocks are Boyd Gaming Corporation (BYD - Free Report) , Accel Entertainment Inc. (ACEL - Free Report) and Super League Enterprise Inc. (SLE - Free Report) .

Boyd Gaming Corporation is a multi-jurisdictional gaming company. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Boyd Gaming's current financial-year earnings indicates growth of 5.2% from the 2024 reported figures. BYD delivered a trailing four-quarter average earnings surprise of 9.1%.

Accel Entertainment is a distributed gaming operator primarily in the United States. The company has a Zacks Rank #2 (Buy) at present. 

The Zacks Consensus Estimate for ACEL’s current financial-year sales indicates growth of 8.2% from the prior year’s reported figure. Accel Entertainment delivered a trailing four-quarter average earnings surprise of 14.9%.

Super League is a strategically integrated publisher and creator of games. It has a Zacks Rank of 2 at present. 

The Zacks Consensus Estimate for Super League’s current financial-year earnings and sales indicates growth of 85.8% and 2.6%, respectively, from the 2024 reported figures. SLE delivered a trailing four-quarter average negative earnings surprise of 17.8%.

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