Two months into the historic — and strange — Reddit-fueled stock boom, GameStop reported its fourth-quarter and full-year earnings for 2020.
The Texas-based retailer fell short of expectations with sales sliding more than 3% in Q4 while comparable store sales increased 6.5%. The company says that its 12% decrease in store locations coupled with 27% fewer operating days for its European stores were to blame for the decline. On the flip side, the company experienced a 175% spike in digital sales for the quarter amid a 21.1% decline in gross margin due to the notoriously thin margins on new console hardware.
For the full year, GameStop reported a 9.5% decline in same-store sales while total sales fell 21% to $5.090 billion. Digital sales grew 191% for the year to comprise nearly 30% of total sales.
Four months into the new console cycle, the Sony Playstation 5 and Microsoft’s Xbox Series S|X are doing big business while Nintendo Switch continues to rank as the top-selling hardware platform overall. GameStop CEO George Sherman says that the momentum of last year’s gaming boom is continuing.
“We are off to a strong start in 2021 as February comparable store sales increased 23%, led by continued strength in global hardware sales,” Sherman says. “As we look ahead, we are excited by the opportunities that are in front of us as we begin prioritizing long-term digital and e-commerce initiatives while continuing to execute on our core business during this emerging console cycle. Our emphasis in 2021 will be on improving our e-Commerce and customer experience, increasing our speed of delivery, providing superior customer service, and expanding our catalogue.”
On a call with investors and analysts, Sherman said that GameStop’s continued business transformation could include further store closures and that the company is looking to extend its reach into the world of PC Gaming, including “computers, monitors, game tables, mobile gaming, and gaming TVs.”
The increased influence of Chewy founder Ryan Cohen and his RC Ventures continues to reshape the GameStop leadership ranks with the addition of Jenna Owens as chief operating officer. Owens joins the company from Amazon where she served as director and general manager for distribution and multichannel fulfillment.
Additionally, Neda Pacifico joins the company as senior vice president of e-commerce and Ken Suzuki has joined as vice president of supply chain systems. Pacifico previously served as Chewy’s vice president of e-commerce and spent more than four years at Amazon while Suzuki previously served as Zulily’s vice president of supply chain technology.
The trio of new executives will start on March 29.