GameStop Quarterly Report: Q2 2026

Key insights

7 takeaways

01
GameStop holds a significant equity position in eBay Inc., consisting of approximately 43.4 million shares with a fair value of $4.9 billion as of August 1, 2026.
02
Net sales for the quarter ended August 1, 2026, declined 18.7% year-over-year to $790.2 million, down from $972.2 million in the prior year period.
03
The company completed a debt exchange on September 3, 2026, issuing approximately 55.5 million shares of Class A common stock and paying $358.4 million in cash to settle existing notes.
04
GameStop recorded a $75.0 million loss on digital assets and related receivables during the quarter, driven by a decline in the market price of Bitcoin.
05
The Board of Directors authorized a new $2.0 billion share repurchase program, replacing the previous authorization, though no shares had been repurchased under this plan as of August 1, 2026.
06
Gross profit increased to $345.0 million (43.7% of net sales) compared to $283.1 million (29.1% of net sales) in the same quarter last year, despite the overall decline in revenue.
07
The company finalized its international streamlining efforts by completing the divestiture of its operations in France during the second quarter of fiscal 2026.

Summary

GameStop's second-quarter fiscal 2026 results, for the quarter ended August 1, 2026, show a company shrinking its retail footprint while redeploying capital into financial assets. Net sales fell 18.7% to $790.2 million from $972.2 million, as Video Games dropped 46.8% and Pre-Owned and Refurbished fell 31.7% against the prior year's Nintendo Switch 2 launch. Collectibles grew 56.5% to 45.1% of sales. That mix shift lifted gross margin to 43.7% from 29.1%, while SG&A fell 14.5% on store closures, international divestitures, and cost cuts. Operating income rose 141% to $160.2 million.

Net income reached $298.7 million, versus $168.6 million a year earlier, and six-month net income was $688.3 million, versus $213.4 million. Results were boosted by a $166.3 million derivative gain and a $72.1 million unrealized equity gain, partly offset by a $75.0 million Bitcoin-related loss. Tax expense rose sharply, with a 28.9% effective rate for the quarter, as net operating loss benefits were exhausted. The company completed the sale of its French operations, its last in Europe, and now reports two segments, the U.S. and Australia.

Capital allocation dominated the period. GameStop exercised paired put/call options and made open-market purchases to hold 43.4 million eBay shares, about 9.8% of the company, valued at $4.95 billion, after a non-binding $125 per share acquisition proposal. Cash and marketable securities fell to $5.06 billion from $9.01 billion at fiscal year-end, and investing outflows reached $1.87 billion. Operating cash flow rose to $399.8 million for six months.

Balance sheet and capital structure changes continue. Convertible notes of about $4.17 billion carrying value remain outstanding, though after quarter-end the company exchanged roughly $1.4 billion of them for about 55.5 million Class A shares plus $358.4 million in cash, with a non-cash charge expected. Shareholders approved raising authorized Class A shares to 2.5 billion, and a new $2.0 billion buyback authorization, with no repurchases yet, runs through June 2029. Warrants at $32.00 expire October 30, 2026.