GameStop released preliminary second-quarter 2026 results showing a sharp increase in profitability despite a substantial decline in sales, with approximately $238 million in gains from its eBay investment providing a major contribution to quarterly net income.
For the 13 weeks ended August 1, GameStop expects net sales of between $780 million and $800 million, compared with $972.2 million during the prior-year quarter. That represents an expected decline of approximately 18% to 20%.
GameStop attributed the revenue decline primarily to the prior-year launch of Nintendo Switch 2, planned store closures and the divestiture of its operations in France.
Profitability moved substantially higher despite the lower sales base.
Preliminary operating income is expected to reach between $150 million and $170 million, compared with $66.4 million a year earlier.
At the bottom end of the range, that would represent an increase of roughly 126%. At the high end, operating income would be approximately 156% above the prior-year result.
GameStop expects net income of between $290 million and $310 million, up from $168.6 million in the second quarter of 2025.
That implies year-over-year net income growth of approximately 72% to 84%.
However, a substantial portion of the increase reflects investment gains rather than the company’s underlying retail operations.
GameStop said quarterly net income includes approximately $238 million of net gains associated with its derivative asset and direct equity investment in eBay.
Those gains were partially offset by an approximately $75 million loss on digital assets and related receivables.
During the quarter, GameStop converted its previously disclosed eBay derivative position into direct ownership of eBay common stock.
As of August 1, the company held approximately 43.4 million eBay shares with a fair value of roughly $4.947 billion.
That conversion also helps explain a significant decline in GameStop’s reported cash, cash equivalents and marketable securities.
The company expects those balances to total between $5.05 billion and $5.07 billion at quarter-end, compared with $8.694 billion at the end of the prior-year second quarter.
GameStop specifically noted that converting the derivative position into its direct eBay equity investment reduced the amount reported within cash, cash equivalents and marketable securities.
The preliminary figures therefore show two different trends within GameStop.
The operating business is producing significantly higher operating income despite lower revenue, while the company’s increasingly important investment portfolio is having a major impact on reported net income and balance-sheet composition.
The concentration is significant. At quarter-end, GameStop’s eBay stake alone was valued at nearly $5 billion, making movements in eBay’s share price potentially meaningful to GameStop’s future reported investment results.
GameStop also continues to have exposure to digital assets, which generated a substantial quarterly loss in the preliminary results.
The company emphasized that the figures remain unaudited and preliminary and could change as normal quarter-end accounting and review procedures are completed.
Complete second-quarter results are scheduled to be released on September 8.
