GameStop Corp. (NYSE: GME), today reported sales
results for the nine-week holiday period ended January 4, 2020.
Total global sales from continuing operations
for the holiday period were $1.83 billion, a 27.5% decrease
compared to the 2018 nine-week holiday period ended January 5,
2019. Total comparable store sales for the nine-week period
decreased 24.7%, following a 1.5% increase in comparable store
sales for the similar period in fiscal 2018. Sales results during
the holiday period are indicative of overall industry trends
impacting the video game industry and driven by an accelerated
decline in new hardware and software sales, particularly in the
month of December.
George Sherman, GameStop’s chief executive
officer said, “We expected a challenging sales environment for the
holiday season as our customers continue to delay purchases ahead
of anticipated console launches in late 2020. However, the
accelerated decline in new hardware and software sales coming out
of black Friday and throughout the month of December was well below
our expectations, reflective of overall industry trends. On a
positive note, we continued to see growth in the Nintendo Switch
platform, which supports our view that our sales will strengthen as
new consoles and innovative technology are introduced.”
Mr. Sherman continued, “Given the deceleration
in sales trends, particularly in December, we are adjusting our
sales outlook for fiscal 2019 and now expect fiscal 2019 earnings
to be below guidance. While we expect the challenges that we faced
in the fourth quarter to continue into fiscal 2020, we believe we
have the right long-term action plans in place to optimize
profitability and increase new revenue streams in advance of new
console introductions for holiday 2020. We look forward to
delivering progress against our strategy as we move through the
year.”
Guidance UpdateComparable store
sales are now expected to decline in the range of 19% to 21% for
fiscal 2019. The Company, while not updating earnings per share
guidance at this time, now expects an adjusted net loss for the
fiscal year, with adjusted earnings per diluted share impacted by
the further deceleration in sales in December. Despite the sales
results, the Company continues to manage inventory effectively and
anticipates ending fiscal 2019 with inventory down approximately
26% as compared to the fiscal year end 2018. The Company now
expects capital expenditures for FY2019 to be in the range of $75
million to $80 million, and forecasts total cash and liquidity,
including availability under the revolving line of credit, at the
end of the fiscal year to be approximately $900 million.
The Company anticipates reporting fourth quarter and full fiscal
year 2019 results in late March.
Webcast of Fireside Chat at 22nd Annual ICR
Conference
The Company will webcast a discussion of the
business by George Sherman, chief executive officer, and Jim Bell,
chief financial officer, at the 22nd Annual ICR Conference. The
event will take place on Tuesday, January 14, 2020 at 10:30am ET.
The fireside chat discussion will be available live and for replay
on GameStop’s investor relations web page at
http://investor.GameStop.com/.
About GameStop
GameStop Corp., a Fortune 500 company
headquartered in Grapevine, Texas, is the world’s largest
video game retailer, operates over 5,600 stores across 14
countries, and offers the best selection of new and pre-owned video
gaming consoles, accessories and video game titles, in both
physical and digital formats. GameStop also offers fans a wide
variety of POP! vinyl figures, collectibles, board games and more.
Through GameStop’s unique buy-sell-trade program, gamers can trade
in video game consoles, games, and accessories, as well as consumer
electronics for cash or in-store credit. The company's consumer
product network also includes www.gamestop.com and Game
Informer® magazine, the world's leading print and digital video
game publication.
General information about GameStop
Corp. can be obtained at the company’s corporate website.
Follow @GameStop and @GameStopCorp on Twitter and
find GameStop on Facebook at www.facebook.com/GameStop.
Safe Harbor
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are based upon management’s
current beliefs, views, estimates and expectations, including as to
the Company’s industry, business strategy, goals and expectations
concerning its market position, future operations, margins,
profitability, capital expenditures, liquidity and capital
resources and other financial and operating information, including
expectations as to future operating profit improvement. Such
statements include without limitation those about the Company’s
expectations for fiscal 2019, future financial and operating
results, projections, expectations and other statements that are
not historical facts. All statements regarding targeted and
expected benefits of our transformation, capital allocation, profit
improvement and cost-savings initiatives, and expected fiscal 2019
results, are forward-looking statements. Forward-looking statements
are subject to significant risks and uncertainties and actual
developments, business decisions and results may differ materially
from those reflected or described in the forward-looking
statements. The following factors, among others, could cause actual
results to differ materially from those reflected or described in
the forward-looking statements: the uncertain impact, effects and
results of pursuit of operating, strategic, financial and
structural initiatives, including the Reboot strategic plan;
volatility in capital and credit markets, including changes that
reduce availability, and increase costs, of capital and credit; our
inability to obtain sufficient quantities of product to meet
consumer demand, including due to supply chain disruptions on
account of trade restrictions, political instability, labor
disturbances and product recalls; the timing of release and
consumer demand for new and pre-owned products; our ability to
continue to expand, and successfully open and operate new stores
for our collectibles business; risks associated with achievement of
anticipated financial and operating results from acquisitions; our
ability to sustain and grow our console digital video game sales;
our ability to establish and profitably maintain the appropriate
mix of digital and physical presence in the markets we serve; our
ability to assess and implement technologies in support of our
omnichannel capabilities; the impact of goodwill and intangible
asset impairments; cost reduction initiatives, including store
closing costs; risks related to changes in, and our continued
retention of, executives and other key personnel and our ability to
attract and retain qualified employees in all areas of the
organization; changes in consumer preferences and economic
conditions; increased operating costs, including wages; disruptions
to our information technology systems including but not limited to
security breaches of systems protecting consumer and employee
information or other types of cybercrimes or cybersecurity attacks;
risks associated with international operations; increased
competition and changing technology in the video game industry;
changes in domestic or foreign laws and regulations that reduce
consumer demand for, or increase prices of, our products or
otherwise adversely affect our business; our effective tax rate and
the factors affecting our effective tax rate, including changes in
international, federal or state tax, trade and other laws and
regulations; the costs and outcomes of legal proceedings and tax
audits; our use of proceeds from the sale of our Spring Mobile
business; and unexpected changes in the assumptions underlying our
outlook for fiscal 2019. Additional factors that could cause our
results to differ materially from those reflected or described in
the forward-looking statements can be found in GameStop's Annual
Report on Form 10-K for the fiscal year ended February 2, 2019
filed with the SEC and available at the SEC's Internet site at
http://www.sec.gov or http://investor.GameStop.com. Forward-looking
statements contained in this press release speak only as of the
date of this release. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as may
be required by any applicable securities laws.
ContactGameStop Corp. Investor Relations(817)
424-2001investorrelations@gamestop.com
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