GameStop reported a sharp improvement in first-quarter (Q1) earnings and operating performance, supported by continued growth in its collectibles business, which helped drive a 14% increase in net sales for the quarter ended 2 May 2026.
For the period, the US video game retailer reported net sales of $835.3m, compared with $732.4m in the same period a year earlier.
Net income climbed to $389.6m from $44.8m, boosted in part by an unrealised gain on a derivative asset of $268.4m, reflecting put and call option transactions linked to eBay common stock.
The company also recorded a gain on digital assets and related receivables of $1.1m and other income of $9.9m, against income tax expense of $116.8m.
Selling, general and administrative expenses fell to $201.6m from $228.1m, contributing to operating income of $143.3m against an operating loss of $10.8m a year earlier.
On an adjusted basis, operating income was $140.5m versus $27.5m in Q1 FY25, and adjusted net income reached $179.3m, compared with $73.1m in the prior-year period.
Basic earnings per share rose to $0.87 from $0.10 while diluted earnings per share increased to $0.66 from $0.09.
Geographically, the US was the dominant contributor, generating net sales of $651.1m and operating income of $144.6m.
Australia produced net sales of $99.6m and broke even at the operating level while Europe reported net sales of $84.6m and an operating loss of $1.3m.
On 2 June 2026, GameStop's board unanimously approved a new discretionary share repurchase authorisation of $2bn, effective through 2 June 2029, replacing an earlier authorisation dating to March 2019.
The results arrive against the backdrop of a failed takeover attempt.
The previous month, GameStop submitted an unsolicited, non-binding proposal to acquire eBay in a cash-and-stock transaction valued at approximately $55.5bn, at an offer price of $125 per share.
eBay's board subsequently rejected the approach, characterising it as "neither credible nor attractive".
In a letter addressed to GameStop chief executive Ryan Cohen, eBay chairman Paul S Pressler confirmed the board had completed a thorough review with independent financial and legal advisers before arriving at its decision.
