GameStop heads into earnings with video game sales in an improving trend

GameStop (NYSE:GME) is due to report Q2 earnings sometime during the first two weeks of September. For Q1, GameStop (GME) reported a 29% year-over-year decline in revenue. The retailer has posted an EPS loss in eight out of its last nine quarters. Investors will get an update on GameStop’s (GME) cash balance when the earnings report hits, amid speculation that it could still be over $4 billion.

There are some reasons to be optimistic that GameStop (GME) could surprise to the upside. Circana reported that EA Sports College Football 25 (EA) has seen strong sales numbers and is contributing to a lift in total video game sales across categories. “Video game content spending increased 10% in July compared to a year ago, as 29% growth in console content spending and an 8% increase in mobile was partially offset by a 6% drop in spending on PC, cloud and non-console VR content,” noted Circana analyst Mat Piscatella. “EA Sports College Football 25 debuted as the best-selling game of 2024 year-to-date and was the primary driver of both content and hardware growth on console platforms,” he added.

Despite constant speculation that CEO Ryan Cohen has a plan to shift GameStop’s (GME) business model, all indications are that video games are still a top priority. GameStop (GME) recently highlighted on social media site X that people will remember the midnight releases, picking up a new pre-order, and inserting the disc for the first time, but nobody will remember online stores, digital downloads, and game subscriptions. For his part, Cohen said the Grapevine, Texas-based company is looking for the best U.S.-based product and graphic designers.

Shares of GameStop (GME) are down 14% over the last six weeks and are hovering at just over the $20 threshold.