Collectibles sales surged to nearly 42% of total revenue as net income rose to $389.6 million, the highest in company history
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GameStop $GME on Tuesday reported net income of $389.6 million in the first quarter ended May 2, the highest quarterly profit in the company's history, as collectibles sales drove a 14% rise in revenue. The company's board also approved a $2 billion share repurchase authorization.
Net sales reached $835.3 million, up from $732.4 million in the same period a year earlier. Collectibles — which include trading cards, apparel, toys, and pop culture merchandise — accounted for $348.9 million, or nearly 42% of total revenue, compared with $211.5 million, or about 29%, a year ago. Hardware and accessories fell to $333.7 million from $345.3 million, while software declined to $152.7 million from $175.6 million.
Operating income came in at $143.3 million, compared with an operating loss of $10.8 million in the prior-year quarter. Selling, general and administrative expenses fell to $201.6 million from $228.1 million. The record net income figure was boosted by a $268.4 million unrealized gain on options tied to eBay stock, as well as $83.7 million in interest income. Excluding those items and other one-time charges, adjusted net income was $179.3 million.
Set to expire on June 2, 2029, the $2 billion buyback supersedes an authorization GameStop had put in place back in March 2019, the company said. GameStop held $9.7 billion in total cash, marketable securities, digital assets and related receivables, and collateral pledged for a derivative asset at the close of the quarter.
GameStop stock rose more than 7% in after-hours trading.
The strong results come as GameStop pursues a bid to acquire eBay. GameStop CEO Ryan Cohen put forward a non-binding proposal to purchase all of eBay's outstanding shares at $125 apiece, split equally between cash and GameStop stock, valuing eBay's equity at roughly $55.5 billion. eBay's board rejected the offer, calling it "neither credible nor attractive," citing concerns about financing viability, debt burden, and governance. A recent Securities and Exchange Commission filing showed GameStop's eBay ownership had climbed to roughly 7.78%, The Wall Street Journal reported.
The buyback marks a notable shift in direction for a company that spent recent periods raising capital aggressively. GameStop carried $4.17 billion in long-term debt at the end of the quarter, up sharply from $1.48 billion a year prior, reflecting a string of convertible note issuances.
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