$GameStop (GME.US)$ reported a significant decrease in net sales and an increase in operating losses for the quarter ended August 3, 2024. Net sales dropped by 31.4% to $798.3 million compared to $1,163.8 million in the same quarter of the previous year. The operating loss for the quarter was $22.0 million, a 32.5% increase from the $16.6 million loss reported in the prior year. The company's net income turned positive at $14.8 million, in stark contrast to the $2.8 million loss in the previous year, primarily due to higher returns on invested cash and marketable securities. Year-over-year, gross profit as a percentage of net sales increased to 31.2% from 26.3%, attributed to improvements in inventory management. Selling, general, and administrative expenses decreased by 16.0% to $270.8 million, reflecting the company's cost reduction efforts.
GameStop's strategic business development plan focuses on optimizing the core business and achieving profitability through omnichannel retail excellence and cost containment. The company exited operations in Ireland, Switzerland, and Austria during fiscal 2023 and is reviewing its store portfolio for potential closures. Plans include leveraging brand equity for growth and revising the investment policy to better manage the company's securities investment portfolio. Cash and cash equivalents stood at $4,193.1 million, with marketable securities at $11.1 million as of August 3, 2024.
SECOND QUARTER OVERVIEW
Net sales were $0.798 billion for the second quarter, compared to $1.164 billion in the prior year's second quarter.Selling, general and administrative (“SG&A") expenses were $270.8 million, or 33.9% of net sales for the second quarter, compared to $322.5 million, or 27.7% of net sales, in the prior year's second quarter.
Net income was $14.8 million for the second quarter, compared to a net loss of $2.8 million for the prior year’s second quarter.
Cash, cash equivalents and marketable securities were $4.204 billion at the close of the quarter.
