GameStop is taking a hit after its latest announcement regarding store closings. The video game chain is prepared to close upwards of 200 locations. The store announced minimally 180 of their accounts will shut down by the end of the year.
The news comes after GameStop revealed lower earnings than expected. There are 5,700 locations that span 14 countries. Approximately 195 stores have closed shop since the start of last year's second quarter.
There were no further details shared on what states will be hit with closures but it can be expected in the near future.
"While we experienced sales declines across a number of our categories during the quarter, these trends are consistent with what we have historically observed towards the end of a hardware cycle," said company CFO Jim Bell said in a statement.
"We will continue to manage the underlying businesses to produce meaningful cash returns, while maintaining a strong balance sheet and investing responsibly in our strategic initiatives."
The report notes that the adjusted earnings per share was expected at 21 cents when in reality it turned out at 32 cents. The revenue also fell short with the expected amount to be $1.34 billion compared to $1.29 billion. The stock market also saw GameStop take a hit on Wednesday with an 11.1% decline. The year-to-date is worse with the stock dropping 60%.
GameStop has fallen from grace over the past few years as Amazon continues to grow its video game reach. E-commerce as a whole has greatly impacted the chain. In addition, the individual consoles also act as its own store with customers able to buy games on PlayStation and Xbox, among others.
This is why the company plans to place more emphasis on its website and has a new 'buy now, pickup online' option. The company's chief executive officer, George Sherman, addressed the new vision in a statement.
"Our strategic plan is anchored on four tenets which include, optimizing the core business by driving efficiency and effectiveness, creating the social and cultural hub of gaming within each GameStop, building compelling digital capabilities, and transforming our vendor and partner relationships for an evolving video game industry. This is a compelling new strategic vision for the company, and we've already started to execute against all four pillars. We also remain committed to returning capital to shareholders and balancing that opportunity against the need to maintain a strong balance sheet to properly run our business and invest in responsible growth."