GameStop continues to post heavy losses amid pandemic, end of console cycle

With one challenging year following another, GameStop is still posting significant losses as it works to offset at least some of its declines by ongoing cost-cutting and restructuring measures amid a global pandemic.

In its quarterly financials, the company posted net sales of $942 million, down 27% year-over-year.

GameStop attributed the ongoing declines to unsurprising factors -- the ending of the console cycle, limited availability of hardware and accessories, a 13% reduction in total store operating days due to COVID-19, and a 10% reduction in the store base as part of its restructuring.

Broken down, hardware and accessory sales accounted for $441 million, software sales at $386 million, and collectibles at $114million.

The company said that despite widespread store closures over the last year, it has recaptured almost 40% of closed store sales through transfer to neighboring stores and online, and noted in its report that global e-commerce sales were up 800% year-over-year -- likely bolstered by pandemic-related lockdowns.

GameStop posted a net loss of $111 million, which is technically an improvement year-over-year from Q2 2019's net loss of $415 million.

However, during its Q2 financials last year, GameStop noted that its deep losses posted that quarter were dramatically impacted by impairment charges totaling $401 million, making its adjusted net loss for the period $32 million.

Meanwhile, this quarter saw an adjusted net loss of $91.2 million -- which is nonetheless better than Q1 of 2020's net loss of $165.7 million, when the majority of the company's stores were closed for a portion of the quarter.

GameStop additionally confirmed that it had reopened all of its locations worldwide that were closed due to COVID-19 to, at minimum, limited customer access or curbside delivery by the end of August 2020.

However, the company is continuing to suspend its future guidance, citing the ongoing uncertainty of the pandemic.