GameStop reported second-quarter net income of $298.7 million, or 51 cents per share, on Tuesday, up from $168.6 million, or 31 cents per share, in the same period a year ago, as gains tied to its eBay stake bolstered the bottom line. The company raised its full-year adjusted EBITDA outlook to more than $650 million, from a prior target of more than $600 million set in June.
Quarterly revenue fell to $790.2 million from $972.2 million in the year-ago period. GameStop pointed to several headwinds behind the drop, including the absence of a Nintendo Switch 2 launch tailwind from the prior year, ongoing store closures, and the sale of its French business. Adjusted earnings per share came in at 27 cents.
Operating income reached $160.2 million, the highest second-quarter operating income in GameStop’s history, compared with $66.4 million in the prior-year quarter. Adjusted EBITDA was $174.0 million, up from $75.7 million a year earlier.
Collectibles — which include trading cards, apparel, toys, and pop culture merchandise — were the standout category, with net sales rising 57% to $356.3 million, representing 45.1% of total revenue compared with 23.4% a year ago. Video games revenue fell to $263.2 million from $494.6 million, and the pre-owned and refurbished segment slid to $170.7 million from $250.0 million.
The eBay investment played a significant role in the quarterly results. As of August 1, GameStop held roughly 43.4 million shares of eBay common stock with a fair value of approximately $4.9 billion. The income statement included a $72.1 million unrealized gain on that equity investment, as well as a $166.3 million gain on a derivative asset, though those items were excluded from the company’s adjusted figures.
GameStop’s results landed inside the profit range it had projected in August. That guidance, the company noted at the time, assumed roughly $238 million in net gains from its eBay position, according to the Wall Street Journal.
The results build on a busy stretch for the Grapevine, Texas-based retailer. In the first quarter, GameStop posted what it called the highest quarterly profit in company history, with net income of $389.6 million, boosted by a $268.4 million unrealized gain on options tied to eBay stock. The board also approved a $2 billion share repurchase authorization at that time.
GameStop disclosed preliminary second-quarter results in late August, showing the conversion of a derivative position related to eBay into a direct equity stake. The company also announced on September 3 that it completed exchanges retiring approximately $1.4 billion in convertible notes, reducing total long-term debt to approximately $2.8 billion, the company said.
