GameStop narrowed its losses during the second quarter to $61.6 million, or 85 cents per share, compared to $111.3 million, or $1.71 per share during the same period a year ago. Adjusted for one-time items, the company posted a net loss of 76 cents per share.
While the video game retailer's loss came in wider than the 67 cents per share expected by Wall Street, the retailer's overall net sales increased by 25.6% of $1.18 billion during the quarter, beating analyst expectations of $1.12 billion.
GameStop's hardware and accessories segment accounted for more than half of the company's total net sales for the quarter, posting revenue of $609.6 million, compared to $441.6 million a year ago. Meanwhile, its software segment posted revenue of $396.6 million, up from $386.5 million a year ago, and its collectibles segment posted revenue of $177.2 million, up from $113.9 million a year ago.
The sales growth came despite a 9% reduction in its global store fleet due to "de-densification efforts" and ongoing store closures across select international markets due to the coronavirus pandemic.
According to a 10Q filing, the majority of GameStop's stores have returned to normal operations, though the retailer experienced some temporary closures in its Australian segment prior to the end of the second quarter.
"While the gaming industry has not been as severely impacted by the COVID-19 pandemic as certain other consumer businesses, store closures during the stay-at-home orders in certain countries continue to adversely impact our results of operations during the six months ended July 31, 2021," GameStop added. "In light of our strengthened balance sheet, we project that we will have adequate liquidity for the next 12 months and the foreseeable future to maintain normal operations."
The company ended the quarter with $1.78 billion in cash and no long-term debt outside of a $47.5 million low-interest loan associated with the French government's pandemic response.
During the quarter, GameStop raised more than $1.1 billion in net proceeds from an at-the-market offering of 5 million shares of common stock announced in June, added new talent with experience in e-commerce, UI, UX, operations and supply chain, and grew its catalog with new products and leading brands across consumer electronics, collectibles, toys and more.
The company also previously announced plans to open distribution centers in York, Pa., and Reno, Nev., to help expand its North American fulfillment network. The 700,000-square-foot York facility, which was expected to be operational by the fourth quarter of 2021, began shipping orders during the second quarter. Meanwhile, the 530,000-square-foot Reno facility is expected to be operational in 2022.
In addition, GameStop has entered into a lease for a new customer care center in Pembroke Pines, Fla., and has started building out its U.S.-based customer care operations.
"We are focused on positioning GameStop to scale, while obsessing over competitive pricing, expansive selection and fast shipping," GameStop's new chief executive officer, Matt Furlong, told analysts on the company's second quarter earnings call.
GameStop did not provide full-year guidance. Instead, Furlong reiterated that net sales are the "primary metric by which stockholders should accept the company's execution."
Shares have fallen about 8% in after-hours trading following Wednesday's announcement.