GameStop Corp. (GME) Q1 2026 Earnings Summary

Executive Summary

• Q1 2026 (13 weeks ended May 3, 2025): Net sales $0.73B, down 16.9% YoY; GAAP diluted EPS $0.09; Adjusted diluted EPS $0.17. EPS beat consensus ($0.04*) but revenue missed ($754.23M*), driven by weaker hardware/software and mix shift toward collectibles . Results vs estimates from S&P Global; values marked with *.
• Operating loss of $10.8M reflected $35.5M in impairment tied to international restructuring; excluding items, Adjusted Operating Income was $27.5M, a material improvement vs prior year’s adjusted operating loss .
• Balance sheet liquidity surged (cash and equivalents $6.39B Q1), aided by convertible notes issuance; management disclosed 4,710 Bitcoin purchased between May 3 and June 10, 2025, introducing earnings variability from crypto and investment portfolio marks .
• Strategic actions: divested Canada (May 4, 2025) and continued realignment across Europe; later quarters show warrant dividend distribution and sizable convertible debt raises, reinforcing liquidity optionality .
• Potential stock reaction catalysts: meaningful EPS beat, ongoing cost discipline, investment portfolio/Bitcoin exposure, and corporate actions (convertible notes, warrants) that can influence sentiment and valuation volatility .

What Went Well and What Went Wrong

What Went Well

• Cost discipline and restructuring: SG&A fell to $228.1M from $295.1M YoY; excluding impairments, Adjusted Operating Income improved to $27.5M vs prior-year adjusted operating loss of $55.0M .
• Earnings outperformance: GAAP net income of $44.8M vs prior-year net loss; Adjusted net income $83.1M vs adjusted net loss last year, and an EPS beat versus Wall Street consensus* .
• Liquidity strength: Cash and equivalents of $6.39B; later quarter cash rose further via convertible notes and financing activities, providing flexibility for strategy and investment portfolio management .

“GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy.”

What Went Wrong

• Top-line softness: Net sales declined 16.9% YoY to $732.4M, with hardware/software down sharply; revenue missed consensus* by ~$21.8M .
• Impairment and regional headwinds: $35.5M impairments related to planned divestitures in Canada and France; Europe showed operating losses, reflecting footprint rationalization and restructuring costs .
• Mix and margin variability: Gross margin improved YoY to 34.5%, but earnings showed sensitivity to investment and crypto marks (e.g., later unrealized digital asset gains) and interest income swings, implying future volatility .

Financial Results

Core P&L and Margins (oldest → newest)

Actual vs Wall Street Consensus (S&P Global)

Values retrieved from S&P Global.*

Segment Net Sales (Q1 2026 vs Q2 FY2025)

Sales Mix (KPIs)

Guidance Changes

Note: GameStop typically does not issue formal quarterly guidance; Q4 FY2024 release explicitly noted no conference call , and the Q1 2026 8-K/press release contains no guidance disclosures .

Earnings Call Themes & Trends

Note: No Q1 2026 earnings call transcript available; the company did not hold a call in Q4 FY2024 and provided results via press releases/8-Ks .

Management Commentary

• Strategic portfolio actions: “Completed the divestiture of Canada on May 4, 2025.”
• Financing/investment policy: “GameStop expects to use the net proceeds from the offering for general corporate purposes, including the acquisition of Bitcoin in a manner consistent with GameStop’s Investment Policy.”
• Risk disclosure tone: Press releases and 8-Ks emphasize potential variability from investment holdings and cryptocurrency exposure, as well as restructuring transitions impacting operating results .

Q&A Highlights

• The company did not provide a Q1 2026 call transcript; prior quarter materials noted no conference call in Q4 FY2024 . No Q&A/guidance clarifications available for Q1 2026; information is sourced from the 8-K 2.02 and press releases .

Estimates Context

• Q1 2026 EPS beat: Actual $0.09 vs consensus $0.04*; revenue miss: Actual $732.4M vs $754.23M* .
• Consensus depth was limited (2 estimates for EPS and revenue*), suggesting potential for larger realized deviations and revision sensitivity post-print.
• Drivers for beat/miss: EPS benefited from lower SG&A and net interest income; revenue headwinds in hardware/software and restructuring drag; non-GAAP adjustments (impairments, transformation costs) meaningfully impacted adjusted metrics .

Values retrieved from S&P Global.*

Key Takeaways for Investors

• EPS beat with tightened cost structure: despite top-line pressure, SG&A reductions and non-GAAP adjustments yielded stronger profitability; watch sustainability as footprint rationalization progresses .
• Revenue softness and mix volatility: hardware/software weakness persisted; collectibles’ rising share can support margins but may not offset broader gaming cycle headwinds quarterly .
• Liquidity optionality and capital markets: substantial cash build and convertible issuance provide flexibility for operations, investments, and potential strategic actions; monitor dilution mechanics and warrant/convert dynamics .
• Crypto/investment exposure is a swing factor: Bitcoin purchases and unrealized gains highlight earnings variability beyond retail operations; expect higher volatility in OI&E lines .
• Regional restructuring ongoing: Canada divestiture done; Europe/France-related actions and impairments continue; near-term costs should subside as portfolio rationalization completes .
• No formal guidance: trading will anchor to realized results, cost execution, and investment line items; limited estimate depth magnifies surprise risk and post-print revisions .
• Near-term strategy: focus on monitoring SG&A trajectory, gross margin stability, investment/crypto marks, and segment performance in the U.S. vs international as restructuring progresses .