GameStop Corp. (NYSE: GME) delivered its highest-ever quarterly net profit on Tuesday, fueled by a sharp rise in collectibles sales, and announced a fresh $2 billion share repurchase program. The results underscore the video game retailer's ongoing transformation under CEO Ryan Cohen, even as it navigates the fallout from a rejected $55.5 billion bid for eBay Inc.
Record Earnings and Revenue Growth
For the first quarter ended May 2, 2026, GameStop reported net income of $389.6 million, a dramatic increase from $44.8 million in the same period last year. Net sales rose 14% year-over-year to $835.3 million, up from $732.4 million. The company swung to an operating profit of $143.3 million, compared to an operating loss of $10.8 million a year earlier, helped by reduced selling, general and administrative expenses.
Collectibles Drive Sales Mix Shift
Collectibles—which include trading cards, toys, and other pop-culture merchandise—now represent 41.8% of net sales, up from 28.9% a year ago. This category has become the company's largest revenue driver, surpassing hardware and accessories, which fell to 39.9% of sales from 47.1%. Software also declined, dropping to 18.3% from 24.0%.
Capital Allocation and Buyback Plan
Directors authorized a new $2 billion share buyback program running through June 2, 2029, replacing the previous 2019 authorization. The repurchase is discretionary, with the company stating it may buy back Class A shares based on market conditions and legal limits, with no firm commitment to a specific amount. GameStop ended the quarter with $9.7 billion in cash, marketable securities, digital assets, and related receivables, plus collateral tied to derivative assets.
Earnings Quality and Derivative Gains
A significant portion of the reported profit was non-cash. Net income included a $268.4 million unrealized gain on a derivative asset linked to eBay shares, which fluctuates with market movements, and a $1.1 million gain from digital assets. Adjusted net income, excluding these gains and impairments, stood at $179.3 million.
eBay Bid and Market Reaction
GameStop's results come amid its ongoing pursuit of eBay. The company offered $125 per eBay share in cash and stock, valuing the deal at approximately $55.5 billion, and has built a 5% economic stake in eBay through derivatives and common stock. eBay rejected the bid on May 12, with board chairman Paul Pressler calling it "neither credible nor attractive," citing concerns over financing, leverage, operational risks, and GameStop's governance.
Analysts remain skeptical of a hostile takeover. Don Bilson at Gordon Haskett told Reuters there is "zero chance" a tender offer would succeed, while Mark Cohen, former director of retail studies at Columbia Business School, noted that Cohen "had enough money to make the claim but not enough money to make his claim stick."
Outlook and Risks
GameStop cautioned that future performance depends on sustained demand for trading cards, its ability to anticipate pop-culture trends, and the timing of share buybacks. The company also highlighted risks from concentrated bets, derivative positions, and digital asset holdings. Shares rose 7.4% in after-hours trading following the earnings beat and buyback announcement, according to Reuters.
