Blab Business
GameStop Forecasts Lower Sales but Higher Profits for Q2 2026
On August 31, 2026, GameStop Corp. (NYSE: GME) released its second‑quarter outlook, warning of a sales dip while celebrating a sharp rise in profitability.
The retailer projects net sales of $780 million to $800 million for the quarter, a decline from $972.2 million in the same period a year earlier. In contrast, operating income is expected to climb to $150 million–$170 million, up from $66.4 million last year, and net income is forecast at $290 million–$310 million versus $168.6 million previously.
The sales shortfall is largely a carry‑over effect from last year’s Nintendo Switch 2 launch, which had lifted revenue in the preceding quarter, and from planned store closures and the divestiture of its French operations. GameStop also cited a shift toward digital sales—up 27 % year‑over‑year—as a factor that mitigates the decline in physical store traffic.
Operating income is expected to more than double, driven in part by cost‑management initiatives and gains on the company’s investment in eBay. Net income, meanwhile, is projected to rise by roughly 73 % from the prior year’s quarter, reflecting both the higher operating margin and the positive impact of the eBay stake. The company’s adjusted EBITDA for fiscal 2026 is also expected to exceed $600 million, up from $345.4 million in the previous year.
GameStop’s stock is currently trading at $18.33 per share, 44.8 % above the intrinsic value estimate of $12.66 derived from GuruFocus’ GF Value metric. The company’s GF Score of 56 out of 100 reflects a mixed financial profile, with strengths in momentum (7/10) but weaknesses in growth (1/10), valuation (3/10), and profitability (4/10). The trailing‑12‑month price‑to‑earnings ratio of 13.88× is well below the 5‑year median of 64.3×, suggesting a discount on earnings multiples.
Insider activity over the past year shows net buying of $22.0 million in shares versus $1.5 million sold, indicating a degree of confidence among executives. Two senior executives hold positions in the company, and two other senior executives have recently increased their holdings. GuruFocus reports that two premium gurus currently hold GameStop shares, with two adding to and two trimming their positions in recent quarters, reflecting a cautious but engaged institutional interest.
GameStop’s retail footprint remains sizable, with 2,206 stores worldwide as of early 2026, including 1,598 in the United States, 300 in Australia and 308 in Europe. The company has closed more than 400 stores in January 2025, a pace twice the number closed in 2024, as part of a broader strategy to trim underperforming locations. The divestiture of French operations and the planned shuttering of nearly 30 New York stores are expected to reduce operating costs further.
Digital sales have become a larger share of GameStop’s revenue. The Other category, which includes digital products and services, grew 40.6 % to $330.8 million in the quarter, and mobile sales are on track to reach the forecast of $150–$200 million for the fiscal year. This shift to digital channels offsets some of the decline in physical store sales and supports the company’s profitability trajectory.
The company’s outlook signals a shift toward higher margins amid a declining top line, a trend that may attract investors focused on profitability rather than growth. However, the significant overvaluation implied by the GF Value metric and the low growth score suggest caution. GameStop will report its full‑year results on September 30, 2026, and investors will watch for guidance on store expansion, digital sales momentum, and the performance of its eBay investment.
The retailer projects net sales of $780 million to $800 million for the quarter, a decline from $972.2 million in the same period a year earlier. In contrast, operating income is expected to climb to $150 million–$170 million, up from $66.4 million last year, and net income is forecast at $290 million–$310 million versus $168.6 million previously.
The sales shortfall is largely a carry‑over effect from last year’s Nintendo Switch 2 launch, which had lifted revenue in the preceding quarter, and from planned store closures and the divestiture of its French operations. GameStop also cited a shift toward digital sales—up 27 % year‑over‑year—as a factor that mitigates the decline in physical store traffic.
Operating income is expected to more than double, driven in part by cost‑management initiatives and gains on the company’s investment in eBay. Net income, meanwhile, is projected to rise by roughly 73 % from the prior year’s quarter, reflecting both the higher operating margin and the positive impact of the eBay stake. The company’s adjusted EBITDA for fiscal 2026 is also expected to exceed $600 million, up from $345.4 million in the previous year.
GameStop’s stock is currently trading at $18.33 per share, 44.8 % above the intrinsic value estimate of $12.66 derived from GuruFocus’ GF Value metric. The company’s GF Score of 56 out of 100 reflects a mixed financial profile, with strengths in momentum (7/10) but weaknesses in growth (1/10), valuation (3/10), and profitability (4/10). The trailing‑12‑month price‑to‑earnings ratio of 13.88× is well below the 5‑year median of 64.3×, suggesting a discount on earnings multiples.
Insider activity over the past year shows net buying of $22.0 million in shares versus $1.5 million sold, indicating a degree of confidence among executives. Two senior executives hold positions in the company, and two other senior executives have recently increased their holdings. GuruFocus reports that two premium gurus currently hold GameStop shares, with two adding to and two trimming their positions in recent quarters, reflecting a cautious but engaged institutional interest.
GameStop’s retail footprint remains sizable, with 2,206 stores worldwide as of early 2026, including 1,598 in the United States, 300 in Australia and 308 in Europe. The company has closed more than 400 stores in January 2025, a pace twice the number closed in 2024, as part of a broader strategy to trim underperforming locations. The divestiture of French operations and the planned shuttering of nearly 30 New York stores are expected to reduce operating costs further.
Digital sales have become a larger share of GameStop’s revenue. The Other category, which includes digital products and services, grew 40.6 % to $330.8 million in the quarter, and mobile sales are on track to reach the forecast of $150–$200 million for the fiscal year. This shift to digital channels offsets some of the decline in physical store sales and supports the company’s profitability trajectory.
The company’s outlook signals a shift toward higher margins amid a declining top line, a trend that may attract investors focused on profitability rather than growth. However, the significant overvaluation implied by the GF Value metric and the low growth score suggest caution. GameStop will report its full‑year results on September 30, 2026, and investors will watch for guidance on store expansion, digital sales momentum, and the performance of its eBay investment.
