GameStop on Friday said that first quarter total global sales fell 5.5% year over year to $1.93 billion (or 7.5% in constant currency), resulting in a consolidated comparable store sales decrease of 5.3% (2.6% in the U.S. and 11.6% internationally).
First quarter net income was $28.2 million, down from net income of $59 million in the prior-year quarter, according to a company press release. Excluding store closure and other charges, adjusted net income was $39 million, down from $63.6 million in the prior-year quarter.
The company also announced that Shane Kim, a former Microsoft executive who has served on GameStop's board since 2011, has been named interim CEO, replacing executive chairman Dan DeMatteo during the search for a permanent chief. DeMatteo stepped up last month after the abrupt departure of Michael Mauler after just three months in the job.
Kim on Friday made clear that he's taking the chief executive slot on a strictly temporary basis, saying he's stepping up because he has "a real interest in helping the company at this time" but that he's enjoyed being retired. Mauler left the company abruptly after taking over following the illness and subsequent death of longtime CEO J. Paul Raines.
"I am not a candidate to fill the role on a permanent basis," Kim told analysts, according to a transcript from Seeking Alpha. "My job during this period is to provide the additional leadership, passion and focus needed to enable our associates to drive the company forward."
His focus will be in bringing additional "strategic thinking and decisiveness," he said, and noted the retailer has more to do in building up what it does well — including its loyalty program, its pre-owned sales, its overseas sales and its partnership with AT&T through its Technology Brands unit. He and the board will also look at "overall performance and profitability."
GameStop is getting hit on various fronts and suffered from a tough comparison to the year-ago quarter. New hardware sales in the first quarter fell 7.9% despite growth in both Xbox One and PlayStation 4 console sales. New software sales fell 10.3%. Pre-owned sales fell 5.8% and worldwide omnichannel sales fell 46%, due to limited allocation of the Nintendo Switch at launch, which drove a 92.9% increase in omnichannel sales in the year-ago quarter. On a reported basis, digital sales fell 2.5% to $43 million, while non-GAAP digital receipts rose 16.2% to $273.7 million.
Technology Brands sales fell 16.1% to $169 million, primarily due to less promotional activity. The company's move to increase sales of collectibles sales continues to pay off, however, as those sales rose 24.4% to $142.4 million.
All told, the quarter fell along executives' expectations, they said, so they've maintained their outlook for the full year. That means revenues are still expected to range between down 6% and down 2%, with same-store sales ranging from down 5% to flat.