GameStop shares jump 13% after strong quarterly earnings, $2 billion share buyback

Video game retailer GameStop saw its share price jump 13% on Wednesday, 3 June, reaching $23.68, after the company reported a strong performance for its fiscal first quarter and unveiled a $2 billion share buyback programme.

The company reported net income of $389.6 million for the first quarter on Tuesday after the closing bell, compared with $44.8 million a year ago. Its operating income rose to $143.3 million.

GameStop said this marked the highest quarterly net income in its history and its strongest-ever first-quarter operating income. Overall sales climbed 14% to $835.3 million. The results were supported by lower expenses and a 65% rise in its collectibles business, which continues to evolve into a surprisingly important business line for the retailer.

GameStop’s selling, general and administrative expenses fell to $201.6 million from $228.1 million a year ago, reflecting tighter cost controls.

The retailer has increasingly focused on selling items such as Pokémon cards and action figures as consumers continue shifting towards digital purchases and online gaming platforms instead of physical stores.

GameStop currently operates around 2,200 retail stores across the US, France, and Australia after shutting 227 locations last year. The company has gradually shifted its focus away from traditional hardware sales toward trading cards and collectibles as gamers increasingly move toward digital downloads and online purchases.

The company’s board also approved a $2 billion share repurchase authorisation through 2 June 2029, replacing a previous authorisation announced in 2019. A buyback allows a company to repurchase its own shares, reducing the stock available in the market and potentially boosting earnings per share.

In mid-May, GameStop offered to acquire eBay, consisting of 50% cash and 50% GameStop stock, despite eBay having a market value nearly four times larger than GameStop’s. However, eBay rejected the proposed $56 billion takeover offer, citing concerns over financing uncertainty and operational risks associated with combining the two businesses.

The unprecedented takeover bid for the much larger eBay drew scepticism from investors and analysts, especially after reports suggested that GameStop planned to borrow $20 billion to help finance the acquisition.

Stock continues to witness sharp swings

GameStop shares have struggled to gain momentum in recent months, closing the last month with a sharp fall of 15%.

Over the years, the stock has failed to establish a sustained trend, either upward or downward, and has remained highly volatile. The shares have often rallied sharply in certain months, only to surrender those gains in subsequent months before rebounding again. This pattern has persisted almost consistently since 2021.

In terms of yearly performance, the stock delivered a massive 78% return in 2024. However, in the following year, it erased nearly half of those gains after plunging 36%. So far in 2026, the stock has rebounded by 5%.

(With inputs from Bloomberg)

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