GameStop (GME)’s Collectibles Business is Quietly Rewriting its Profit Story

GameStop Corp. (NYSE:GME) reported a second-quarter net income of $298.7 million on September 8, 2026, up from $168.6 million a year earlier, despite a decline in revenue to $790.2 million from $972.2 million. The company's collectibles business is quietly rewriting its profit story as revenue from this segment jumped 57% year-over-year to about $356.3 million, accounting for 45.1% of total sales.

Gross margin surged nearly double to 43.7% from 29.1% a year earlier, boosting adjusted EBITDA to roughly $174 million from $75.7 million a year earlier. This improvement demonstrates that GameStop can generate stronger earnings even as its video-game business contracts. The company retired approximately $1.4 billion of convertible notes and reduced long-term debt to about $2.8 billion, providing greater financial flexibility.

Management also raised its full-year adjusted EBITDA outlook to more than $650 million, signaling confidence in the collectibles business. Despite lower revenue, the shift towards collectibles contributes to improved operating profitability. However, investors should distinguish between core retail operations and gains from investment holdings, like eBay.

GameStop's weaker video-game sales, store closures, and French operations divestiture contribute to its shrinking core business. The company must sustain collectibles growth and convert improved margins into recurring operating earnings to maintain durable value for shareholders.