GameStop Corp. stock research
FY2024 Q3
GameStop (GME) Gross Margin — Quarter Ended Nov 2, 2024
In the current quarter, revenue and gross profit both increased compared to the prior quarter, but cost of revenue rose at a higher rate, causing gross margin to weaken. Relative to the same quarter last year, revenue and gross profit were lower, yet cost of revenue declined more sharply, resulting in an improved gross margin.
Gross margin takeaway
Quarter ended Nov 2, 2024 · FY2024 Q3
In the current quarter, revenue and gross profit both increased compared to the prior quarter, but cost of revenue rose at a higher rate, causing gross margin to weaken. Relative to the same quarter last year, revenue and gross profit were lower, yet cost of revenue declined more sharply, resulting in an improved gross margin.
- The strongest observable driver is the change in the relationship between cost of revenue and revenue. Compared to the prior year, cost of revenue declined at a greater rate than revenue, expanding gross margin; however, sequentially cost of revenue increased faster than revenue, compressing margin.
- Sequentially, gross margin weakened as revenue growth was outpaced by cost of revenue growth. Year over year, gross margin improved because the decline in cost of revenue was proportionally larger than the decline in revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
29.9%
Gross profit
$257.2M
Revenue
$860.3M
Cost of revenue
$603.1M
Quarter-over-quarter change
-1.3 pts
Year-over-year change
+3.8 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Feb 3, 2024 | $1.8B | $419.2M | $1.4B | 23.4% |
| May 4, 2024 | $881.8M | $244.5M | $637.3M | 27.7% |
| Aug 3, 2024 | $798.3M | $248.8M | $549.5M | 31.2% |
| Nov 2, 2024 | $860.3M | $257.2M | $603.1M | 29.9% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Aug 3, 2024
-1.3 pts
Year-over-year change
Oct 28, 2023
+3.8 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver is the change in the relationship between cost of revenue and revenue. Compared to the prior year, cost of revenue declined at a greater rate than revenue, expanding gross margin; however, sequentially cost of revenue increased faster than revenue, compressing margin.
Sequentially, gross margin weakened as revenue growth was outpaced by cost of revenue growth. Year over year, gross margin improved because the decline in cost of revenue was proportionally larger than the decline in revenue.
Monitor the trend of cost of revenue relative to revenue to assess the sustainability of margin direction.