GameStop's Turnaround Plan Shouldn't Impress Investors
GameStop's (NYSE: GME) stock recently plunged after the video game retailer posted a big second-quarter miss. Its revenue fell 14% annually to $1.3 billion, missing estimates by $50 million, and its comparable-store sales declined 12%.
Sales dropped across all of its product categories except for collectibles, which rose 21% annually but only accounted for 13% of the company's top line. Sales of new video game hardware plunged 41% as it sold fewer consoles, sales of new video game software slipped 5% due to a lack of big game releases, and pre-owned product sales tumbled 17% with fewer trade-ins.
Sales of accessories, previously lifted by surging demand for gaming headsets, fell 9%. GameStop's digital revenue, which only accounted for 3% of its top line, fell 10%, indicating that it couldn't keep pace with first-party digital distribution platforms like Sony's (NYSE: SNE) PlayStation Store.
Source Fool.com
