Today GameStop reported a $673 million loss on $8.3 billion in global sales in its full-year earnings results, as sales of both new and pre-owned games and consoles declined year-over-year.
That big $673 million loss (GAAP) is one of the largest in the company's history, and quite a bit less than the $34.7 million profit the company reported during the same period a year prior.
GameStop claims the big reason for the loss is $964.2 million in "asset impairment charges and other items...primarily related to impairment of goodwill." Without that weight, the company claims it would have reported net income of $218.4 million for its 2018 fiscal year, which ended February 2nd.
The company says sales of new hardware fell 1.3 percent year-over-year, while sales of new software slipped 5.1 percent and sales of pre-owned games fell 13.2 percent.
It's a similar story if you look just at the company's fourth quarter, which included the holiday season and also saw year-over-year declines in sales of consoles and new/pre-owned games.
GameStop reportedly saw a year-over-year increase in Nintendo Switch console sales, but overall hardware sales were still pulled down 9.8 percent, in large part due to the decline in Xbox One X sales.
"As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model," stated GameStop CFO Rob Llod in the earnings report. "We will continue to leverage our powerful brand to drive growth and, with a new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability."
The company declined to provide specific numbers for what it expects to earn in 2019, noting that in its first fiscal quarter it expects not to report a profit and may report a loss of up to $0.05 per share, "consistent with the seasonally slower first half of the fiscal year."