Retailer GameStop is continuing to make cutbacks as it tries to stay afloat this year. The company was already facing financial issues before the COVID-19 pandemic, but due to the current environment, they’re making further changes. Already planning to close 320 stores, another 100 more stores will be shuttered according to a CNN article (400 to 450 estimate). Not only that, but the struggling retailer is warning others of more closures next year during last Wednesday’s earnings call. Since many shoppers are shifting their focus to online shopping, GameStop and other retailers have had to cater to consumer’s buying habits and demands.
Following the meeting, GameStop issued a news release about the company’s second-quarter financials and included the following statistics:
George Sherman, GameStop’s chief executive officer, said, “The second quarter saw strong progress toward our strategic initiatives, fueling an 800% increase in global E-commerce sales, a $133.7 million reduction in SG&A and a significant improvement in our balance sheet with $735.1 million in cash at quarter-end and a 50% reduction in inventory, as compared to the second quarter last year. These achievements combined drove $181.9 million in free cash flow for the quarter.”
That increase in online sales is nothing to scoff at, as it accounts for 20% of its total sales during the quarter. Despite that push, GameStop’s revenue declined by 12.7%, falling below analysts’ expectations. GameStop has been struggling with selling physical copies of games since 2019, and the coronavirus seems to be sending the retailer into further disarray, but not into a complete and total nosedive compared to other retailers.
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