Sales decreased by 2.4% to $1.65 billion, while comparable store sales declined by 0.5%. The company has been struggling to gain customers in stores due to an increase in online game-software downloads.
New hardware sales increased by 20.1% driven by the launch of the Xbox One X and continued strong sales of the Nintendo Switch and PS4. However, new software sales fell by 18.5% primarily due to the lack of significant title launches during the quarter. Pre-owned sales declined 9.9%.
Looking ahead into the full year 2018, the company reiterated its previously issued annual guidance. GameStop continues to expect adjusted earnings in the range of $3.00 to $3.35 per share and the total sales decline of 2% to 6%. Comparable-store sales are still estimated to be in the range of flat to down 5%. Capital expenditures are still projected to be in the $110 million to $120 million range.
The company confirmed that it continues to engage with third parties regarding a possible transaction as part of a comprehensive review of strategic and financial alternatives initiated by the board of directors. The ongoing process includes a thorough evaluation of a full range of alternatives to enhance shareholder value. GameStop has been working with Perella Weinberg Partners LP as financial advisor and Sullivan & Cromwell LLP and Pepper Hamilton LLP as legal advisors to assist in the review process.
For the second quarter, digital sales fell by 13.5% due to the sale of Kongregate. Collectibles sales increased 15.7% driven by continued expansion of licensed merchandise offerings, new and improved product offerings and the notable growth in apparel. Store closures hurt Technology Brands sales that dropped by 10.3%.
On September 4, the company’s board of directors declared a quarterly cash dividend of $0.38 per common share. The dividend is payable on October 2, 2018, to shareholders of record on September 18, 2018.
Shares of GameStop ended Thursday’s regular session down 0.74% at $16.14 on the NYSE. The stock has fallen by about 16% in the past year and 10% this year.