GameStop's Collectibles Business Drives Stronger Profitability Despite Revenue Decline
In the second quarter of 2026, GameStop (GME) reported a significant increase in net income to $298.7 million from $168.6 million year-over-year, despite total revenue falling by nearly 19% to $790.2 million. The company attributed this improvement largely to its collectibles business and gains related to its equity stake in eBay (EBAY). Collectibles revenue surged 57%, reaching approximately $356.3 million, now accounting for over 45% of total sales. GameStop's gross margin nearly doubled from 29.1% to 43.7%, driven by the higher-margin collectibles segment. The company also raised its full-year adjusted EBITDA outlook above $650 million and reported a record second-quarter operating income of $160.2 million, reflecting improved financial flexibility after retiring about $1.4 billion in convertible notes. However, GameStop's core video-game business continued to decline sharply due to store closures, the French operations divestiture, and comparisons with last year’s Nintendo Switch 2 launch. While collectibles are helping offset this weakness, investors remain cautious as a significant portion of Q2 net income came from investment gains rather than retail performance.
Topics: Collectibles business EBITDA guidance GameStop Margin expansion Profitability