GameStop anticipates a second-quarter net profit between $290 million and $310 million, a significant jump from the $168.6 million reported in the same period last year.

The video game retailer released preliminary results for the fiscal second quarter on Monday, forecasting an increase in profitability even as sales are expected to decline. For the 13-week period ending August 1, the company projects net income of $290 million to $310 million, compared with $168.6 million in the year-ago quarter.

GameStop attributes the expected profit to approximately $238 million in net gains from eBay-related derivative assets and equity investments, partially offset by a roughly $75 million loss tied to digital assets and related receivables. The company noted that converting previously disclosed eBay-related derivative positions into direct equity investments during the quarter reduced its cash, cash equivalents, and marketable securities.

Earlier this year, GameStop CEO Ryan Cohen made an unsolicited offer of about $56 billion to acquire eBay, stating he had a plan to transform the e-commerce platform into a more formidable competitor against Amazon. eBay subsequently rejected the proposal, calling it "not credible and unattractive," but Cohen has publicly stated he remains committed to pursuing the acquisition talks. According to a May filing with the U.S. Securities and Exchange Commission, GameStop had accumulated a 7.78% stake in eBay.

For the second quarter, GameStop expects net sales between $780 million and $800 million, down from $972.2 million in the same period last year. The company cited a high comparison base from last year's Switch 2 console launch, planned store closures, and the divestiture of its French operations as key factors behind the anticipated revenue decline. In pre-market trading, shares rose 1.7% to $18.17.

Additionally, GameStop announced Monday that it has amended its previously disclosed exchange agreements with holders of certain zero-coupon convertible senior notes due 2030 and 2032. Approximately $1.4 billion in notes will be exchanged and retired. Under the original terms, the exchange was to be settled entirely in GameStop Class A common stock, with the number of shares based on the volume-weighted average price during a 35-trading-day reference period starting August 3. The company said the amended agreements terminate the remainder of the reference period immediately; consideration for the elapsed portion will be settled in stock, while the remaining consideration will now be settled in cash.