GameStop Corp. (NYSE: GME), today reported sales
and earnings for the fourth quarter and fiscal year ended February
1, 2020.
Fiscal Year 2019 Highlights:
- Generated $62.3 million in
adjusted operating income while exiting the year with
approximately $500 million in cash, despite a challenging sales
environment.
- Significantly improved
capital structure, deploying proceeds from sale of
non-core business units to reduce debt by $401 million, repurchase
38.1 million shares for $199 million to leverage the Company’s
market position as the pure-play, omni-channel leader in
gaming.
- Optimized
operations by improving inventory with a 31% reduction at
year end and implementing initiatives to accelerate GameStop’s
transformation with initiatives in digital, online, experiential
retail and its loyalty program and continuing to de-densify the
store base.
- Began fiscal 2020
with increased financial flexibility and continued focus on key
priorities to optimize, stabilize and transform GameStop to
achieve sustainable profitable long-term growth.
George Sherman, GameStop’s chief executive
officer, said, “We delivered profitability, on an adjusted basis,
ahead of our updated expectations, marking progress on our strategy
to evolve our operating model and position GameStop for long-term
profitable growth. We accomplished this, despite industry
challenges that led to an expected significant decline in sales.
Financially, we improved efficiency and effectiveness across our
enterprise during the year fueling a 160 basis point expansion in
gross margin and a $130 million reduction in adjusted SG&A. We
strengthened the balance sheet, including significant reductions in
inventory, accounts payable and debt. Operationally, we accelerated
our digital capabilities by elevating our web platform and further
optimizing our retail footprint through market de-densification
while setting up a laboratory in our Tulsa market to test
experiential elements in 12 stores with promising initial
results.”
Mr. Sherman, continued, “As we begin fiscal
2020, we remain focused on our key priorities, yet recognize that
we continue to face the temporary headwind of lower current
generation console hardware and software sales as consumers delay
purchases in anticipation of new platform launches expected later
in the year. The COVID-19 outbreak has led to changes in how
consumers work, play and learn and over the past few weeks, led to
increased demand for our products. While still early, we are
pleased with the progress we have made to date in our initiatives
to stabilize, optimize and transform the business, specifically the
strengthening of our balance sheet. As such, we will maintain
our focus on expense and inventory discipline so that we move
forward with a strengthened platform to capitalize on the
significant opportunities we see for growth.”
2019 Accomplishments: The
Company continues to execute its four strategic priorities.
Progress toward these goals in fiscal 2019 include:
Optimize the core business by improving efficiency and
effectiveness across the organization;
- Delivered expense reductions of
$130 million for the year on an adjusted basis;
- Decreased inventory by 31% compared
to fiscal 2018 that helped drive 160 bps gross margin expansion;
and
- Further optimized global store base
de-densifying locations and began the wind down of operations in
Denmark, Finland, Norway and Sweden.
Create the social and cultural hub of
gaming;
- Successful implementation of
experiential lab in the Tulsa market;
- Enhanced the PowerUp loyalty
program with new features leading to a 280 basis point improvement
in the conversion rate of transactions that include PowerUp
enrollment.
Build a frictionless digital ecosystem to reach GameStop
customers;
- Provided access to the best digital
content and products through the launch of an improved website and
the expansion of omnichannel features such as Buy Online Pick Up In
Store.
- Appointed chief digital officer to
further advance digital transformation activities.
Transform vendor and partner relationships for the
future of gaming;
- Expanded product penetration in PC gaming and private label
product categories;
- Optimized supply chain and vendor base to leverage scale and
new categories;
- Began testing digital revenue sharing with key
partners.
Fourth Quarter Results:(See reconciliation
table of GAAP results to adjusted results in Schedule II of this
press release.)
- Total global comparable store sales
decreased 26.1%
- Gross margin expanded 280 bps from
the prior year fourth quarter
- SG&A was $511.7 million
compared to $552.5 million in the prior year fourth quarter
- Adjusted SG&A was $488.1
million, a reduction of $58.2 million from the prior year fourth
quarter
- Operating income of $75.2 million
compared to operating loss of ($232.1) million in the prior year
fourth quarter
- Adjusted operating income of $109.2
million compared to adjusted operating income of $202.5 million in
the prior year fourth quarter
- Net income of $21.0 million, or
$0.32 per diluted share compared to net loss of ($187.7) million,
or a loss of (1.84) per diluted share in the prior year fourth
quarter
- Adjusted net income of $83.8
million or $1.27 per diluted share, compared to adjusted net income
of $148.5 million, or $1.45 per diluted share in the prior year
fourth quarter
- Repurchased 3.5 million shares of
common stock for $20.1 million
Fiscal Year 2019 Results:(See reconciliation
table of GAAP results to adjusted results in Schedule II of this
press release.)
- Total global comparable store sales
decreased 19.4%
- Gross margin expanded 160 bps from
the prior year
- SG&A was $1.923 billion
compared to $1.994 billion from the prior year
- Adjusted SG&A was $1.846
billion, a reduction of $130.4 million from the prior year
- Operating loss of ($399.6) million
compared to operating loss of ($702.0) million in the prior
year
- Adjusted operating income of $62.3
million compared to adjusted operating income of $331.3 million in
the prior year
- Net loss of ($470.9) million, or
($5.38) per diluted share compared to net loss of ($673.0) million,
or ($6.59) per diluted share in the prior year
- Adjusted net income of $19.1
million or $0.22 per diluted share compared to adjusted net income
of $218.4 million, or $2.14 per diluted share in fiscal 2018
- Repurchased 38.1 million shares of
common stock for $199 million
Capital Allocation UpdateDuring
the quarter, the Company repurchased 3.5 million shares of its
common stock, for $20.1 million, or an average price of $5.74 per
share, bringing the fiscal 2019 repurchase activity to $199 million
for 38.1 million shares, or 37% of the shares outstanding, at an
average price of $5.21 per share. As of the end of the fourth
quarter, the Company had 64.3 million shares outstanding.
During fiscal 2019, the Company reduced its outstanding debt by
$401.0 million and had $419.8 million of long-term debt remaining
on the balance sheet at fiscal year-end.
2020 Strategic Initiatives: The
Company expects to progress its four strategic priorities,
including key objectives for fiscal 2020 including;
Optimize the core business by improving efficiency and
effectiveness across the organization.
- Further optimize inventory efficiency and cash flow from
working capital;
- Strategically and opportunistically evaluate markets for
continued store dedensification to maximize profit transfer;
Create the social and cultural hub of
gaming.
- Expand product offering and categories to enhance ability to
cater to customer needs;
- Identify and commercialize certain aspects of the Tulsa market
lab in select stores
Build a frictionless digital ecosystem to reach GameStop
customers.
- Optimize omni-channel capabilities and further grow PowerUp
loyalty base;
- Enhance GameInformer asset with interactive digital media
Transform vendor and partner relationships for the
future of gaming.
- Continue to explore and advance new revenue model
opportunities;
- Further leverage market leading position and scale to optimize
purchasing power
2020 Outlook (52-weeks ending January
30, 2021)The Company is closely monitoring the dynamic
situation around COVID-19 and potential impacts on its
business. Despite increased demand since the outbreak began
as millions of consumers look to GameStop for products that support
remote and virtual work and learn settings, given the uncertainty
around the evolving situation, the Company has suspended further
guidance at this time.
The Company continues to focus on maintaining
its balance sheet strength, prioritizing the allocation of
resources to areas of the business that produce strong cash flow,
reducing expenses across the business and intensifying inventory
discipline. The Company believes these combined efforts position it
well to manage through this unprecedented time.
Conference Call Information
A conference call with GameStop Corp.’s
management is scheduled for March 26, 2020 at 5:00 p.m. ET to
discuss the Company’s financial results. The phone number for the
call is 877-451-6152 and the confirmation code is 13699885.
This call, along with supplemental information, can also be
accessed at GameStop Corp.’s investor relations home page at
http://investor.GameStop.com/. The conference call will be archived
for two months on GameStop’s corporate website.
About GameStop
GameStop Corp., a Fortune 500 company
headquartered in Grapevine, Texas, is the world’s largest video
game retailer, operates over 5,500 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.
Non-GAAP Measures and Other Metrics
As a supplement to our financial results
presented in accordance with U.S. generally accepted accounting
principles (GAAP), GameStop may use certain non-GAAP
measures, such as adjusted SG&A, adjusted operating income,
adjusted net income, adjusted earnings per share, free cash flow
and adjusted free cash flow. We believe these non-GAAP financial
measures provide useful information to investors in evaluating our
core operating performance. Adjusted selling, general and
administrative expenses (“SG&A”), adjusted operating income,
adjusted net income and adjusted earnings per share exclude the
effect of items such as transformation costs, asset impairments,
store closure costs, severance, non-operating tax charges, as well
as divestiture costs. We define free cash flow as cash provided by
(used in) operating activities less cash used in additions to
property and equipment. We define adjusted free cash flow as free
cash flow plus the cash flow effect of significant rollover
accounts payable payments made in fiscal 2019 pertaining to fiscal
2018. Results reported as constant currency exclude the impact of
fluctuations in foreign currency exchange rates by converting our
local currency financial results using the prior period exchange
rates and comparing these adjusted amounts to our current period
reported results. Our definition and calculation of non-GAAP
measures may differ from that of other companies. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative for, the Company's reported GAAP financial results.
Non-GAAP financial measures should be viewed as supplementing, and
not as an alternative or substitute for, the Company’s financial
results prepared in accordance with GAAP. Certain of the
items that may be excluded or included in non-GAAP financial
measures may be significant items that could impact the Company’s
financial position, results of operations or cash flows and should
therefore be considered in assessing the Company’s actual and
future financial condition and performance.
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 2020, 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 2020
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; the
impact of the COVID-19 outbreak on capital markets and our
business; 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, COVID-19,
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 2020. 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.
GameStop Corp.Condensed
Consolidated Statements of Operations(in millions,
except per share data)(unaudited)
|
|
13 weeks ended February 1,
2020 |
|
13 weeks ended February 2,
2019 |
Net sales |
|
$ |
2,194.1 |
|
|
$ |
3,063.0 |
|
Cost of sales |
|
1,596.8 |
|
|
2,314.2 |
|
Gross profit |
|
597.3 |
|
|
748.8 |
|
Selling, general and
administrative expenses |
|
511.7 |
|
|
552.5 |
|
Goodwill impairments |
|
— |
|
|
413.4 |
|
Asset impairments |
|
10.4 |
|
|
15.0 |
|
Operating earnings (loss) |
|
75.2 |
|
|
(232.1 |
) |
Interest expense, net |
|
6.5 |
|
|
10.5 |
|
Earnings (loss) from continuing operations before income taxes |
|
68.7 |
|
|
(242.6 |
) |
Income tax expense |
|
43.8 |
|
|
25.9 |
|
Net income (loss) from
continuing operations |
|
24.9 |
|
|
(268.5 |
) |
Income from discontinued
operations, net of tax |
|
(3.9 |
) |
|
80.8 |
|
Net income (loss) |
|
$ |
21.0 |
|
|
$ |
(187.7 |
) |
|
|
|
|
|
Basic earnings (loss) per
share: |
|
|
|
|
Continuing operations |
|
$ |
0.38 |
|
|
$ |
(2.63 |
) |
Discontinued operations |
|
(0.06 |
) |
|
0.79 |
|
Basic earnings (loss) per
share |
|
$ |
0.32 |
|
|
$ |
(1.84 |
) |
|
|
|
|
|
Diluted earnings (loss) per
share: |
|
|
|
|
Continuing operations |
|
$ |
0.38 |
|
|
$ |
(2.63 |
) |
Discontinued operations |
|
(0.06 |
) |
|
0.79 |
|
Diluted earnings (loss) per
share |
|
$ |
0.32 |
|
|
$ |
(1.84 |
) |
|
|
|
|
|
Dividends per common
share |
|
$ |
— |
|
|
$ |
0.38 |
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
|
65.5 |
|
|
102.2 |
|
Diluted |
|
65.7 |
|
|
102.2 |
|
|
|
|
|
|
Percentage of Net Sales: |
|
|
|
|
Net sales |
|
100.0 |
% |
|
100.0 |
% |
Cost of sales |
|
72.8 |
% |
|
75.6 |
% |
Gross profit |
|
27.2 |
% |
|
24.4 |
% |
Selling, general and
administrative expenses |
|
23.3 |
% |
|
18.0 |
% |
Goodwill impairments |
|
— |
% |
|
13.5 |
% |
Asset impairments |
|
0.5 |
% |
|
0.5 |
% |
Operating earnings (loss) |
|
3.4 |
% |
|
(7.6 |
)% |
Interest expense, net |
|
0.3 |
% |
|
0.3 |
% |
Earnings (loss) from continuing operations before income taxes |
|
3.1 |
% |
|
(7.9 |
)% |
Income tax expense |
|
2.0 |
% |
|
0.9 |
% |
Net income (loss) from
continuing operations |
|
1.1 |
% |
|
(8.8 |
)% |
Income from discontinued
operations, net of tax |
|
(0.1 |
)% |
|
2.7 |
% |
Net income (loss) |
|
1.0 |
% |
|
(6.1 |
)% |
|
|
|
|
|
|
|
GameStop Corp.Condensed
Consolidated Statements of Operations(in millions,
except per share data)(unaudited)
|
|
52 weeks ended February 1, 2020 |
|
52 weeks ended February 2, 2019 |
Net sales |
|
$ |
6,466.0 |
|
|
$ |
8,285.3 |
|
Cost of sales |
|
4,557.3 |
|
|
5,977.2 |
|
Gross profit |
|
1,908.7 |
|
|
2,308.1 |
|
Selling, general and
administrative expenses |
|
1,922.7 |
|
|
1,994.2 |
|
Goodwill impairments |
|
363.9 |
|
|
970.7 |
|
Asset impairments |
|
21.7 |
|
|
45.2 |
|
Operating loss |
|
(399.6 |
) |
|
(702.0 |
) |
Interest expense, net |
|
27.2 |
|
|
51.1 |
|
Loss from continuing operations before income taxes |
|
(426.8 |
) |
|
(753.1 |
) |
Income tax expense |
|
37.6 |
|
|
41.7 |
|
Net loss from continuing
operations |
|
(464.4 |
) |
|
(794.8 |
) |
(Loss) income from
discontinued operations, net of tax |
|
(6.5 |
) |
|
121.8 |
|
Net loss |
|
$ |
(470.9 |
) |
|
$ |
(673.0 |
) |
|
|
|
|
|
Basic (loss) earnings per
share: |
|
|
|
|
Continuing operations |
|
$ |
(5.31 |
) |
|
$ |
(7.79 |
) |
Discontinued operations |
|
(0.08 |
) |
|
1.19 |
|
Basic loss per share |
|
$ |
(5.38 |
) |
|
$ |
(6.59 |
) |
|
|
|
|
|
Diluted (loss) earnings per
share: |
|
|
|
|
Continuing operations |
|
$ |
(5.31 |
) |
|
$ |
(7.79 |
) |
Discontinued operations |
|
(0.08 |
) |
|
1.19 |
|
Diluted loss per share |
|
$ |
(5.38 |
) |
|
$ |
(6.59 |
) |
|
|
|
|
|
Dividends per common
share |
|
$ |
0.38 |
|
|
$ |
1.52 |
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
Basic |
|
87.5 |
|
|
102.1 |
|
Diluted |
|
87.5 |
|
|
102.1 |
|
|
|
|
|
|
Percentage of Net Sales: |
|
|
|
|
|
|
|
|
|
Net sales |
|
100.0 |
% |
|
100.0 |
% |
Cost of sales |
|
70.5 |
% |
|
72.1 |
% |
Gross profit |
|
29.5 |
% |
|
27.9 |
% |
Selling, general and
administrative expenses |
|
29.8 |
% |
|
24.2 |
% |
Goodwill impairments |
|
5.6 |
% |
|
11.7 |
% |
Asset impairments |
|
0.3 |
% |
|
0.5 |
% |
Operating loss |
|
(6.2 |
)% |
|
(8.5 |
)% |
Interest expense, net |
|
0.4 |
% |
|
0.6 |
% |
Loss from continuing operations before income taxes |
|
(6.6 |
)% |
|
(9.1 |
)% |
Income tax expense |
|
0.6 |
% |
|
0.5 |
% |
Net loss from continuing
operations |
|
(7.2 |
)% |
|
(9.6 |
)% |
(Loss) income from
discontinued operations, net of tax |
|
(0.1 |
)% |
|
1.5 |
% |
Net loss |
|
(7.3 |
)% |
|
(8.1 |
)% |
|
|
|
|
|
|
|
GameStop Corp.Condensed
Consolidated Balance Sheets(in
millions)(unaudited)
|
|
February 1, 2020 |
|
February 2, 2019 |
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
499.4 |
|
|
$ |
1,624.4 |
|
Receivables, net |
|
141.9 |
|
|
134.2 |
|
Merchandise inventories, net |
|
859.7 |
|
|
1,250.5 |
|
Prepaid expenses and other current assets |
|
120.9 |
|
|
118.6 |
|
Assets held for sale |
|
11.8 |
|
|
— |
|
Total current assets |
|
1,633.7 |
|
|
3,127.7 |
|
Property and equipment,
net |
|
275.9 |
|
|
321.3 |
|
Operating lease right-of-use
assets |
|
767.0 |
|
|
— |
|
Goodwill |
|
— |
|
|
363.9 |
|
Other noncurrent assets |
|
143.1 |
|
|
231.4 |
|
Total assets |
|
$ |
2,819.7 |
|
|
$ |
4,044.3 |
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
380.8 |
|
|
$ |
1,051.9 |
|
Accrued liabilities and other current liabilities |
|
617.5 |
|
|
780.0 |
|
Current portion of operating lease liabilities |
|
239.4 |
|
|
— |
|
Current portion of debt, net |
|
— |
|
|
349.2 |
|
Total current liabilities |
|
1,237.7 |
|
|
2,181.1 |
|
Long-term debt, net |
|
419.8 |
|
|
471.6 |
|
Operating lease
liabilities |
|
529.3 |
|
|
— |
|
Other long-term
liabilities |
|
21.4 |
|
|
55.4 |
|
Total liabilities |
|
2,208.2 |
|
|
2,708.1 |
|
Stockholders’ equity |
|
611.5 |
|
|
1,336.2 |
|
Total liabilities and
stockholders’ equity |
|
$ |
2,819.7 |
|
|
$ |
4,044.3 |
|
|
|
|
|
|
|
|
|
|
GameStop Corp.Condensed
Consolidated Statements of Cash Flows(in
millions)(unaudited)
|
|
52 weeks ended February 1, 2020 |
|
52 weeks ended February 2, 2019 |
Cash flows from operating
activities: |
|
|
|
|
Net loss |
|
$ |
(470.9 |
) |
|
$ |
(673.0 |
) |
Adjustments to reconcile net loss to net cash flows from operating
activities: |
|
|
|
|
Depreciation and amortization (including amounts in cost of
sales) |
|
96.2 |
|
|
126.9 |
|
Goodwill and asset impairments |
|
385.6 |
|
|
1,015.9 |
|
Stock-based compensation expense |
|
8.9 |
|
|
10.7 |
|
Deferred income taxes |
|
61.4 |
|
|
(4.1 |
) |
Loss on disposal of property and equipment |
|
1.9 |
|
|
2.0 |
|
Loss (gain) on divestiture |
|
9.1 |
|
|
(100.8 |
) |
Other |
|
4.1 |
|
|
6.9 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Receivables, net |
|
(10.9 |
) |
|
(34.4 |
) |
Merchandise inventories |
|
361.1 |
|
|
12.6 |
|
Prepaid expenses and other current assets |
|
3.6 |
|
|
2.2 |
|
Prepaid income taxes and income taxes payable |
|
(75.9 |
) |
|
(18.7 |
) |
Accounts payable and accrued liabilities |
|
(792.8 |
) |
|
(26.0 |
) |
Operating lease right-of-use assets and liabilities |
|
4.1 |
|
|
— |
|
Changes in other long-term liabilities |
|
— |
|
|
4.9 |
|
Net cash flows (used in) provided by operating activities |
|
(414.5 |
) |
|
325.1 |
|
Cash flows from investing
activities: |
|
|
|
|
Purchase of property and equipment |
|
(78.5 |
) |
|
(93.7 |
) |
Proceeds from divestiture |
|
5.2 |
|
|
727.9 |
|
Proceeds from company-owned life insurance |
|
12.0 |
|
|
— |
|
Other |
|
0.4 |
|
|
1.3 |
|
Net cash flows (used in) provided by investing activities |
|
(60.9 |
) |
|
635.5 |
|
Cash flows from financing
activities: |
|
|
|
|
Repayments of senior notes |
|
(404.5 |
) |
|
— |
|
Repurchase of common shares |
|
(198.7 |
) |
|
— |
|
Dividends paid |
|
(40.5 |
) |
|
(157.4 |
) |
Borrowings from the revolver |
|
— |
|
|
154.0 |
|
Repayments of revolver borrowings |
|
— |
|
|
(154.0 |
) |
Repayment of acquisition-related debt |
|
— |
|
|
(12.2 |
) |
Tax withholdings on share-based awards |
|
(1.0 |
) |
|
(5.1 |
) |
Net cash flows used in financing activities |
|
(644.7 |
) |
|
(174.7 |
) |
Exchange rate effect on cash and cash equivalents and restricted
cash |
|
(6.9 |
) |
|
(24.7 |
) |
Decrease in cash held for sale |
|
— |
|
|
10.2 |
|
(Decrease) increase in cash and cash equivalents and restricted
cash |
|
(1,127.0 |
) |
|
771.4 |
|
Cash and cash equivalents and
restricted cash at beginning of period |
|
1,640.5 |
|
|
869.1 |
|
Cash and cash equivalents and
restricted cash at end of period |
|
$ |
513.5 |
|
|
$ |
1,640.5 |
|
|
|
|
|
|
GameStop Corp.Schedule
ISales
Mix(unaudited)
|
|
13 Weeks Ended February 1,
2020 |
|
13 Weeks Ended February 2,
2019 |
Net Sales (in millions): |
|
Net Sales |
|
Percent of Total |
|
Net Sales |
|
Percent of Total |
|
|
|
|
|
|
|
|
|
Hardware and
accessories(1) |
|
964.8 |
|
|
44.0 |
% |
|
1,429.6 |
|
|
46.7 |
% |
Software(2) |
|
984.3 |
|
|
44.8 |
% |
|
1,363.6 |
|
|
44.5 |
% |
Collectibles |
|
245.0 |
|
|
11.2 |
% |
|
269.8 |
|
|
8.8 |
% |
Total |
|
$ |
2,194.1 |
|
|
100.0 |
% |
|
$ |
3,063.0 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52 Weeks Ended February 1,
2020 |
|
52 Weeks Ended February 2,
2019 |
Net Sales (in millions): |
|
Net Sales |
|
Percent of Total |
|
Net Sales |
|
Percent of Total |
|
|
|
|
|
|
|
|
|
Hardware and
accessories(1) |
|
2,722.2 |
|
|
42.1 |
% |
|
3,717.8 |
|
|
44.9 |
% |
Software(2) |
|
3,006.3 |
|
|
46.5 |
% |
|
3,856.5 |
|
|
46.5 |
% |
Collectibles |
|
737.5 |
|
|
11.4 |
% |
|
711.0 |
|
|
8.6 |
% |
Total |
|
$ |
6,466.0 |
|
|
100.0 |
% |
|
$ |
8,285.3 |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
(1) Includes sales of new and
pre-owned hardware, accessories, hardware bundles in which hardware
and digital or physical software are sold together in a single SKU,
interactive game figures, strategy guides, mobile and consumer
electronics, and the operations of our Simply Mac stores, which
were sold in September 2019.(2) Includes sales of
new and pre-owned video game software, digital software and PC
entertainment software.
GameStop Corp.Schedule
II(in
millions)(unaudited)
Non-GAAP results
The following table reconciles the Company's
selling, general and administrative expenses ("SG&A"),
operating earnings, net income and earnings per share as presented
in its consolidated statements of operations and prepared in
accordance with Generally Accepted Accounting Principles ("GAAP")
to its adjusted SG&A, adjusted operating income, adjusted net
income and adjusted earnings per share. The diluted
weighted-average shares outstanding used to calculated adjusted
earnings per share may differ from GAAP weighted-average shares
outstanding. Under GAAP, basic and diluted weighted-average shares
outstanding are the same in periods where there is a net loss. The
tax adjustments below for the 13 and 52 weeks ended February 1,
2020, include provisions for deferred tax valuation allowances and
the tax effects of non-GAAP adjustments. The reconciliations below
are from continuing operations only.
|
|
13 Weeks Ended February 1,
2020 |
|
13 Weeks Ended February 2,
2019 |
|
52 Weeks Ended February 1,
2020 |
|
52 Weeks Ended February 2,
2019 |
|
|
|
|
|
|
|
|
|
Adjusted
SG&A |
|
|
|
|
|
|
|
|
SG&A |
|
$ |
511.7 |
|
|
|
$ |
552.5 |
|
|
|
$ |
1,922.7 |
|
|
|
$ |
1,994.2 |
|
|
Transformation costs |
|
(10.8 |
) |
|
|
— |
|
|
|
(37.9 |
) |
|
|
— |
|
|
Business divestitures |
|
(9.5 |
) |
|
|
— |
|
|
|
(10.8 |
) |
|
|
— |
|
|
Severance and other |
|
(3.3 |
) |
|
|
(6.2 |
) |
|
|
(27.6 |
) |
|
|
(17.4 |
) |
|
Adjusted SG&A |
|
$ |
488.1 |
|
|
|
$ |
546.3 |
|
|
|
$ |
1,846.4 |
|
|
|
$ |
1,976.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended February 1,
2020 |
|
13 Weeks Ended February 2,
2019 |
|
52 Weeks Ended February 1,
2020 |
|
52 Weeks Ended February 2,
2019 |
|
|
|
|
|
|
|
|
|
Adjusted Operating
Income |
|
|
|
|
|
|
|
|
Operating earnings (loss) |
|
$ |
75.2 |
|
|
$ |
(232.1 |
) |
|
|
$ |
(399.6 |
) |
|
|
$ |
(702.0 |
) |
|
Transformation costs |
|
10.8 |
|
|
— |
|
|
|
37.9 |
|
|
|
— |
|
|
Business divestitures |
|
9.5 |
|
|
— |
|
|
|
10.8 |
|
|
|
— |
|
|
Goodwill impairments |
|
— |
|
|
413.4 |
|
|
|
363.9 |
|
|
|
970.7 |
|
|
Property, equipment and other asset impairments |
|
8.1 |
|
|
2.1 |
|
|
|
19.4 |
|
|
|
2.1 |
|
|
Intangible impairments |
|
2.3 |
|
|
12.9 |
|
|
|
2.3 |
|
|
|
43.1 |
|
|
Severance and other |
|
3.3 |
|
|
6.2 |
|
|
|
27.6 |
|
|
|
17.4 |
|
|
Adjusted operating income |
|
$ |
109.2 |
|
|
$ |
202.5 |
|
|
|
$ |
62.3 |
|
|
|
$ |
331.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
13 Weeks Ended February 1,
2020 |
|
13 Weeks Ended February 2,
2019 |
|
52 Weeks Ended February 1,
2020 |
|
52 Weeks Ended February 2,
2019 |
Adjusted Net
Income |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
21.0 |
|
|
|
$ |
(187.7 |
) |
|
|
$ |
(470.9 |
) |
|
|
$ |
(673.0 |
) |
|
(Income) loss from discontinued operations |
|
3.9 |
|
|
|
(80.8 |
) |
|
|
6.5 |
|
|
|
(121.8 |
) |
|
Net income (loss) from
continuing operations |
|
24.9 |
|
|
|
(268.5 |
) |
|
|
(464.4 |
) |
|
|
(794.8 |
) |
|
Transformation costs |
|
10.8 |
|
|
|
— |
|
|
|
37.9 |
|
|
|
— |
|
|
Business divestitures and other |
|
9.5 |
|
|
|
— |
|
|
|
10.8 |
|
|
|
— |
|
|
Goodwill impairment |
|
— |
|
|
|
413.4 |
|
|
|
363.9 |
|
|
|
970.7 |
|
|
Property, equipment and other asset impairments |
|
8.1 |
|
|
|
2.1 |
|
|
|
19.4 |
|
|
|
2.1 |
|
|
Intangible impairments |
|
2.3 |
|
|
|
12.9 |
|
|
|
2.3 |
|
|
|
43.1 |
|
|
Severance and other |
|
3.3 |
|
|
|
6.2 |
|
|
|
27.6 |
|
|
|
17.4 |
|
|
Tax effect of non-GAAP adjustments |
|
(6.8 |
) |
|
|
(18.3 |
) |
|
|
(30.9 |
) |
|
|
(50.4 |
) |
|
Other tax charges(1) |
|
31.7 |
|
|
|
0.7 |
|
|
|
52.5 |
|
|
|
30.3 |
|
|
Adjusted net income |
|
$ |
83.8 |
|
|
|
$ |
148.5 |
|
|
|
$ |
19.1 |
|
|
|
$ |
218.4 |
|
|
|
|
|
|
|
|
|
|
|
(1) Other tax charges includes an increase in the valuation
allowance for the 13 and 52 weeks ended February 1, 2020 and a
non-operating tax charge for the 13 and 52 weeks ended February 2,
2019. |
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per
Share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.28 |
|
|
|
$ |
1.45 |
|
|
|
$ |
0.22 |
|
|
|
$ |
2.14 |
|
|
Diluted |
|
$ |
1.27 |
|
|
|
$ |
1.45 |
|
|
|
$ |
0.22 |
|
|
|
$ |
2.14 |
|
|
|
|
|
|
|
|
|
|
|
Dividend per common share |
|
$ |
— |
|
|
|
$ |
0.38 |
|
|
|
$ |
0.38 |
|
|
|
$ |
1.52 |
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in
adjusted calculation |
|
|
|
|
|
|
|
|
Basic |
|
65.5 |
|
|
|
102.2 |
|
|
|
87.5 |
|
|
|
102.1 |
|
|
Diluted |
|
65.7 |
|
|
|
102.4 |
|
|
|
87.6 |
|
|
|
102.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GameStop Corp.Schedule
III(in
millions)(unaudited)
Non-GAAP results
The following table reconciles the Company's
cash flows provided by operating activities as presented in its
unaudited Consolidated Statements of Cash Flows and prepared in
accordance with GAAP to its free cash flow and adjusted free cash
flow.
|
|
52 weeks ended February 1,
2020 |
|
Net cash flows (used in) provided by operating activities |
|
$ |
(414.5 |
) |
|
|
Purchase of property and equipment |
|
(78.5 |
) |
|
|
Free cash flow |
|
(493.0 |
) |
|
|
Adjustments: |
|
|
|
Rollover of accounts payable payments |
|
415.4 |
|
|
|
Adjusted free cash flow |
|
$ |
(77.6 |
) |
|
|
|
|
|
|
|
|
|
ContactGameStop Corp. Investor Relations(817)
424-2001investorrelations@gamestop.com
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