GameStop Experiences 2nd Quarter Fiscal 2019 Results NYSE:GME – GlobeNewswire
GRAPEVINE, Texas, Sept. 10, 2019 (GLOBE NEWSWIRE) -- GameStop Corp. (NYSE: GME), today reported sales and earnings for the second quarter ended August 3, 2019. The company also introduced the core tenets of its GameStop Reboot strategic plan for the future. George Sherman, GameStop’s chief executive officer said, “We are committed to acting with a…

GRAPEVINE, Texas, Sept. 10, 2019 (GLOBE NEWSWIRE) — GameStop Corp. (NYSE: GME), these days reported sales and earnings for the second quarter ended August three, 2019. The company moreover launched the core tenets of its GameStop Reboot strategic notion for the future.

George Sherman, GameStop’s chief executive officer said, “We are committed to performing with a sense of urgency to address the areas of the unreal that are excessive to attaining prolonged-term success and label creation for all our stakeholders. We can design GameStop on the correct strategic direction and  totally leverage our recent situation and worth within the video sport industry. Our strategic notion is anchored on four tenets which encompass, optimizing the core substitute by utilizing effectivity and effectiveness, creating the social and cultural hub of gaming inner every GameStop, constructing compelling digital capabilities, and reworking our provider and partner relationships for an evolving video sport industry. Right here is a compelling unique strategic vision for the company, and we’ve already started to construct against all four pillars. We moreover live committed to returning capital to shareholders and balancing that chance against the need to retain a solid steadiness sheet to well urge our substitute and put money into guilty boost.”

GameStop Reboot – Strategic Update

As phase of its dash-forward plans, the company’s leadership outlined a technique to give a retract to the financial performance of the unreal and implement a series of initiatives that will make stronger the prolonged-term success of the unreal and label creation for stakeholders.

The four pillars to the strategic notion encompass:

  • Optimize the Core: Optimize the core substitute by bettering effectivity and effectiveness at some level of the organization, including label restructuring, inventory management optimization, adding and rising high margin product classes, and rationalizing the worldwide store defective.
  • Change into the Social / Cultural Hub for Gaming: Form the social and cultural hub of gaming at some level of the GameStop platform by finding out and bettering existing core resources including the shop journey, educated pals and the PowerUp Rewards loyalty program.
  • Bask in Digital Platform: Bask in compelling digital capabilities, including the latest relaunch of GameStop.com, to reach customers extra broadly at some level of the omni-channel platform and gives them the corpulent spectrum of instruct material and acquire entry to to merchandise they desire.
  • Rework Provider Partnerships: Rework our provider and partner relationships to liberate additional high-margin income streams and optimize the lifetime label of every and each buyer.  

2nd Quarter Results

Jim Bell, GameStop’s chief financial officer said, “While we skilled sales declines at some level of a replacement of our classes within the direction of the quarter, these trends are in line with what we like historically seen in direction of the discontinue of a hardware cycle. We can continue to administer the underlying companies to invent necessary cash returns, whereas affirming a solid steadiness sheet and investing responsibly in our strategic initiatives.”

GameStop’s second quarter whole global sales diminished 14.three% (Thirteen.1% in fixed forex) to $1.three billion, main to a consolidated connected store sales lower of Eleven.6%.    

  • Contemporary hardware sales diminished 41.1%, reflective of latest bulletins for subsequent era console launches in 2020. 
  • Contemporary instrument sales diminished 5.three%, with boost in Nintendo Change instrument titles larger than offset by weaker title launches at some level of other consoles within the quarter when put next with closing yr. 
  • Accessories sales diminished 9.5%.
  • Pre-owned sales declined 17.5% with declines in hardware and instrument.
  • Digital receipts diminished Eleven.2% to $227.2 million because of the weaker title launches within the quarter when put next with closing yr.
  • Collectibles sales increased 21.2%, with persisted solid double-digit boost in both home and global retail outlets.

GameStop’s second quarter GAAP procure income (loss) changed into once ($415.three) million, or ($four.15) per diluted share, when put next with procure income (loss) of ($24.9) million, or ($0.24) per diluted share, within the prior-yr quarter, which integrated the Spring Mobile substitute. 2nd quarter fiscal 2019 outcomes encompass asset impairment costs and other objects of $four hundred.9 million ($381.6 million procure of taxes), or $three.eighty two per diluted share, basically connected to impairment of goodwill. 2nd quarter fiscal 2018 outcomes integrated a non-working tax price of $29.6 million, or $0.29 per diluted share.

With the exception of the $four hundred.9 million of impairment costs and other objects, GameStop’s adjusted procure income (loss) from persevering with operations for the second quarter changed into once ($32.0) million or ($0.32) per diluted share, when put next with procure income (loss) from persevering with operations of ($10.2) million, or ($0.10) per diluted share, within the prior-yr quarter. 

A reconciliation of non-GAAP outcomes, including adjusted procure income (loss) from persevering with operations and adjusted working earnings from persevering with operations, to its most directly connected GAAP financial measure is integrated with this originate (Time desk III).

Capital Allocation Update

On July 10, 2019, GameStop finished a modified Dutch auction soft provide to retract 12,000,000 shares of its total stock at $5.20 per share for an aggregate label of $Sixty two.four million, rather than fees and fees. The company is committed to returning excess capital to shareholders as appropriate and currently has roughly $237 million final below the existing share repurchase authorization. Throughout the quarter, the company diminished its infamous debt by $forty nine.eight million, bringing the yr-to-date slit worth in debt to $401.7 million with $419.1 million of prolonged-term debt final on the steadiness sheet at quarter discontinue. 

2019 Outlook

As beforehand launched, GameStop is currently imposing a label-financial savings and dealing profit development initiative designed to make stronger the organization for the future and make stronger prolonged-term improved financial performance and profitability, which encompass provide chain efficiencies, operational enhancements, expense financial savings and pricing and promotion optimization. The company now expects to whole annualized working profit development in excess of $200 million, an assign bigger from its preliminary estimate of roughly $one hundred million. 

The company is providing the following guidance for corpulent fiscal yr 2019:

Similar Store Gross sales A decline within the low-children
Adjusted (Non-GAAP) Profits Tax Rate* Roughly 27%
Adjusted (Non-GAAP) Earnings Per Part (diluted)* $1.15 to $1.30
Capital Expenditures $ninety million to $95 million

*A reconciliation of non-GAAP forward-taking a look projections to GAAP financial measures is rarely any longer on hand as the nature or quantity of potential adjustments, which also can very successfully be necessary, can no longer be fade at present.

Conference Call Data

A conference name with GameStop Corp.’s management is scheduled for September 10, 2019 at 5:00 p.m. ET to focus on the company’s financial outcomes. The cellular phone number for the name is 888-254-3590 and the confirmation code is 2950173. This name, along with supplemental knowledge, can moreover be accessed at GameStop Corp.’s investor kin dwelling page at http://investor.GameStop.com/. The conference name will be archived for two months on GameStop’s company web design.

About GameStop

GameStop Corp., a Fortune 500 company headquartered in Grapevine, Texas, is the world’s most provocative video sport retailer, operates over 5,seven-hundred retail outlets at some level of 14 countries, and provides the qualified desire of unique and pre-owned video gaming consoles, tools and video sport titles, in both bodily and digital formats. GameStop moreover provides fans a huge diversity of POP! vinyl figures, collectibles, board games and additional. By GameStop’s recent interact-sell-substitute program, gamers can substitute in video sport consoles, games, and tools, as successfully as client electronics for cash or in-store credit score. The company’s client product community moreover entails www.gamestop.com and Game Informer® magazine, the world’s main print and digital video sport newsletter.

Fresh knowledge about GameStop Corp. will even be obtained at the company’s company web design. Practice @GameStop and @GameStopCorp on Twitter and earn GameStop on Fb at www.fb.com/GameStop.

Non-GAAP Monetary Measures and Diversified Metrics

As a complement to our financial outcomes presented in accordance with U.S. in total popular accounting principles (GAAP), GameStop might perhaps well perhaps also exercise certain non-GAAP financial measures, such as adjusted working earnings (loss), adjusted procure income (loss), adjusted earnings per share, adjusted income tax price and incessant forex. We assume these non-GAAP financial measures provide worthwhile knowledge to investors in evaluating our core working performance at some level of reporting intervals by rather than objects we operate no longer assume are indicative of our core substitute or affect comparability. Adjusted working earnings (loss), adjusted procure income (loss), adjusted earnings per share and adjusted income tax price exclude the manufacture of objects such as goodwill and asset impairments, store closure charges, severance, non-working tax costs, as successfully as acquisition and divestiture charges, and transformation charges. Results reported as fixed forex exclude the affect of fluctuations in foreign currencies substitute charges by changing our native forex financial outcomes the usage of the prior interval substitute charges and comparing these adjusted portions to our latest interval reported outcomes. Accordingly, we assume that our presentation of portions on a fixed forex foundation is worthwhile to investors because of the it enables them to larger realize the adjustments in our substitute that are no longer connected to forex movements.  Our definition and calculation of non-GAAP financial measures might perhaps well perhaps also vary from that of other companies. Non-GAAP financial measures need to be seen to boot to, and no longer as a substitute for, the company’s reported GAAP financial outcomes. Additionally, GameStop makes exercise of “digital receipts” as an working metric and defines it as the retail label paid by the patron for digital instruct material equipped personally or bundled with non-digital merchandise and sales of subscriptions to our Game Informer magazine in digital manufacture. The broad majority of our digital receipts come from digital merchandise that are equipped personally reasonably than bundled with other merchandise. Under GAAP, we witness the sale of these digital merchandise on a procure foundation, whereby the commissions earned are recorded to income reasonably than the corpulent retail label paid by the patron. We assume this working metric is worthwhile in working out the dimensions and performance of our digital substitute in comparability to measures of the total digital industry revenues and our other video sport product classes.

Salvage Harbor

This press originate accommodates forward-taking a look statements within the direction of the which diagram of the Non-public Securities Litigation Reform Act of 1995. Such statements are based mostly upon management’s latest beliefs, views, estimates and expectations, including as to the Company’s industry, substitute technique, objectives and expectations concerning its market situation, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and dealing knowledge, including expectations as to future working profit development. Such statements encompass without limitation these about the Company’s expectations for fiscal 2019, future financial and dealing outcomes, projections, expectations and other statements that are no longer historical facts. All statements regarding focused and anticipated advantages of our transformation, capital allocation, profit development and label-financial savings initiatives, and anticipated fiscal 2019 outcomes, are forward-taking a look statements.  Forward-taking a look statements are self-discipline to necessary dangers and uncertainties and exact trends, substitute choices and outcomes might perhaps well perhaps also vary materially from these reflected or described within the forward-taking a look statements.  The following factors, amongst others, might perhaps well perhaps also cause exact outcomes to vary materially from these reflected or described within the forward-taking a look statements: the unsure affect, effects and outcomes of pursuit of working, strategic, financial and structural initiatives, including the Reboot strategic notion; volatility in capital and credit score markets, including adjustments that lower availability, and assign bigger charges, of capital and credit score; our inability to assign sufficient portions of product to meet client establish a matter to, including because of the invent chain disruptions on narrative of substitute restrictions, political instability, labor disturbances and product recollects; the timing of originate and client establish a matter to for unique and pre-owned merchandise; our means to continue to assign bigger, and successfully begin and operate unique retail outlets for our collectibles substitute; dangers connected with fulfillment of anticipated financial and dealing outcomes from acquisitions; our means to withhold and develop our console digital video sport sales; our means to place and profitably retain the qualified mix of digital and bodily presence within the markets we aid; our means to evaluate and implement technologies in make stronger of our omnichannel capabilities; the affect of goodwill and intangible asset impairments; label slit worth initiatives, including store closing charges; dangers connected to adjustments in, and our persisted retention of, executives and other key personnel and our means to design and retain tremendous workers in all areas of the organization; adjustments in client preferences and financial prerequisites; increased working charges, including wages; disruptions to our knowledge know-how systems including however no longer diminutive to safety breaches of systems conserving client and worker knowledge or other forms of cybercrimes or cybersecurity attacks; dangers connected with global operations; increased competitors and changing know-how within the video sport industry; adjustments in home or foreign licensed guidelines and guidelines that lower client establish a matter to for, or assign bigger costs of, our merchandise or otherwise adversely affect our substitute; our efficient tax price and the factors affecting our efficient tax price, including adjustments in global, federal or articulate tax, substitute and other licensed guidelines and guidelines; the costs and outcomes of correct lawsuits and tax audits; our exercise of proceeds from the sale of our Spring Mobile substitute; and surprising adjustments within the assumptions underlying our outlook for fiscal 2019. Further factors that will perhaps well perhaps also cause our outcomes to vary materially from these reflected or described within the forward-taking a look statements will even be discovered in GameStop’s Annual Account on Originate 10-K for the fiscal yr ended February 2, 2019 filed with the SEC and on hand at the SEC’s Cyber web design at http://www.sec.gov or http://investor.GameStop.com. Forward-taking a look statements contained on this press originate be in contact only as of the date of this originate. The Company undertakes no obligation to publicly update any forward-taking a look insist, whether as a outcomes of unique knowledge, future trends or otherwise, with the exception of as might perhaps well perhaps also very successfully be required by any applicable securities licensed guidelines.

GameStop Corp.

Condensed Consolidated Statements of Operations

(in millions, with the exception of per share knowledge)(unaudited)

    Thirteen weeks ended

August three, 2019
  Thirteen weeks ended

August four, 2018
Obtain sales   $ 1,285.7     $ 1,501.1  
Fee of sales   886.6     1,031.1  
Inferior profit   399.1     470.0  
Promoting, customary and administrative fees   459.three     441.5  
Depreciation and amortization   22.6     27.0  
Goodwill impairments   363.9      
Working (loss) earnings   (446.7 )   1.5  
Pastime expense, procure   7.0     Thirteen.9  
Loss from persevering with operations earlier than income taxes   (453.7 )   (12.four )
Profits tax (profit) expense   (40.1 )   27.four  
Obtain loss from persevering with operations   (413.6 )   (39.eight )
(Loss) income from discontinued operations, procure of tax   (1.7 )   14.9  
Obtain loss   $ (415.three )   $ (24.9 )
         
Traditional (loss) earnings per share:        
Continuing operations   $ (four.14 )   $ (0.39 )
Discontinued operations   (0.02 )   0.15  
Traditional (loss) earnings per share   $ (four.15 )   $ (0.24 )
         
Diluted (loss) earnings per share:        
Continuing operations   $ (four.14 )   $ (0.39 )
Discontinued operations   (0.02 )   0.15  
Diluted (loss) earnings per share   $ (four.15 )   $ (0.24 )
         
Dividends per total share   $     $ 0.38  
         
Weighted-moderate total shares infamous:        
Traditional   one hundred.0     102.1  
Diluted   one hundred.0     102.1  
         
Percentage of Obtain Gross sales:        
         
Obtain sales   one hundred.0 %   one hundred.0 %
Fee of sales   sixty nine.0     sixty eight.7  
Inferior profit   31.0     31.three  
Promoting, customary and administrative fees   35.6     29.four  
Depreciation and amortization   1.eight     1.eight  
Goodwill impairments   28.three      
Working (loss) earnings   (34.7 )   0.1  
Pastime expense, procure   0.6     1.0  
Loss from persevering with operations earlier than income taxes   (35.three )   (0.9 )
Profits tax (profit) expense   (three.1 )   1.eight  
Obtain loss from persevering with operations   (32.2 )   (2.7 )
(Loss) income from discontinued operations, procure of tax   (0.1 )   1.0  
Obtain loss   (32.three )%   (1.7 )%
             
    26 weeks ended

August three, 2019
  26 weeks ended

August four, 2018
Obtain sales   $ 2,833.four     $ three,286.9  
Fee of sales   1,963.1     2,285.eight  
Inferior profit   870.three     1,001.1  
Promoting, customary and administrative fees   889.9     897.6  
Depreciation and amortization   forty five.7     fifty five.5  
Goodwill impairments   363.9      
Working (loss) earnings   (429.2 )   forty eight.0  
Pastime expense, procure   14.7     27.6  
(Loss) earnings from persevering with operations earlier than income taxes   (443.9 )   20.four  
Profits tax (profit) expense   (37.eight )   39.eight  
Obtain loss from persevering with operations   (406.1 )   (19.four )
(Loss) income from discontinued operations, procure of tax   (2.four )   22.7  
Obtain (loss) income   $ (408.5 )   $ three.three  
         
Traditional (loss) earnings per share:        
Continuing operations   $ (four.01 )   $ (0.19 )
Discontinued operations   (0.02 )   0.22  
Traditional (loss) earnings per share   $ (four.04 )   $ 0.03  
         
Diluted (loss) earnings per share:        
Continuing operations   $ (four.01 )   $ (0.19 )
Discontinued operations   (0.02 )   0.22  
Diluted (loss) earnings per share   $ (four.04 )   $ 0.03  
         
Dividends per total share   $ 0.38     $ 0.seventy six  
         
Weighted-moderate total shares infamous:        
Traditional   one zero one.2     one zero one.9  
Diluted   one zero one.2     one zero one.9  
         
Percentage of Obtain Gross sales:        
         
Obtain sales   one hundred.0 %   one hundred.0 %
Fee of sales   sixty nine.three     sixty nine.5  
Inferior profit   30.7     30.5  
Promoting, customary and administrative fees   31.four     27.three  
Depreciation and amortization   1.6     1.7  
Goodwill impairments   12.eight      
Working (loss) earnings   (15.1 )   1.5  
Pastime expense, procure   0.6     0.9  
(Loss) earnings from persevering with operations earlier than income taxes   (15.7 )   0.6  
Profits tax (profit) expense   (1.four )   1.2  
Obtain loss from persevering with operations   (14.three )   (0.6 )
(Loss) income from discontinued operations, procure of tax   (0.1 )   0.7  
Obtain (loss) income   (14.four )%   0.1 %
             

GameStop Corp.

Condensed Consolidated Steadiness Sheets(in millions)(unaudited)

    August three,

 2019
  August four,

 2018
ASSETS:
Present resources:        
Cash and cash equivalents   $ 424.0     $ 272.eight  
Receivables, procure   122.four     121.eight  
Merchandise inventories, procure   948.9     1,a hundred thirty.6  
Prepaid fees and other latest resources   143.2     159.5  
Sources held for sale   29.1     640.1  
Full latest resources   1,667.6     2,324.eight  
Property and tools, procure   312.0     325.eight  
Working rent correct-of-exercise resources   769.7      
Deferred income taxes   157.eight     153.6  
Goodwill       1,337.9  
Diversified noncurrent resources   80.eight     a hundred and forty.three  
Full resources   $ 2,987.9     $ four,282.four  
         
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Present liabilities:        
Accounts payable   $ 368.three     $ 535.eight  
Accumulated and other latest liabilities   593.7     714.three  
Present fragment of working rent liabilities   240.three      
Liabilities held for sale   14.5     40.7  
Full latest liabilities   1,216.eight     1,290.eight  
Prolonged-term debt, procure   419.1     819.2  
Working rent liabilities   523.9      
Diversified prolonged-term liabilities   18.four     sixty eight.2  
Full liabilities   2,178.2     2,178.2  
Stockholders’ equity   809.7     2,104.2  
Full liabilities and stockholders’ equity   $ 2,987.9     $ four,282.four  
                 
GameStop Corp.
         
Time desk I
Gross sales Mix
(unaudited)
    Thirteen Weeks Ended   Thirteen Weeks Ended
    August three, 2019   August four, 2018
    Obtain   Percent   Obtain   Percent
Obtain Gross sales (in millions):   Gross sales   of Full   Gross sales   of Full
                 
Contemporary video sport hardware (1)   $ one hundred seventy five.6     Thirteen.7 %   $ 298.three     19.9 %
Contemporary video sport instrument   285.0     22.2 %   300.9     20.0 %
Pre-owned and label video sport merchandise   373.1     29.0 %   452.1     30.1 %
Online sport tools   169.6     Thirteen.2 %   187.three     12.5 %
Digital   36.three     2.eight %   40.2     2.7 %
Collectibles   171.eight     Thirteen.four %   141.7     9.four %
Diversified (2)   Seventy four.three     5.7 %   80.6     5.four %
                 
  Full   $ 1,285.7     one hundred.0 %   $ 1,501.1     one hundred.0 %
                 
(1)  Involves sales of hardware bundles, in which bodily hardware and digital or bodily instrument are equipped collectively as a single SKU.

(2)  Involves cell and client electronics equipped thru our Simply Mac branded retail outlets. Also entails sales of PC entertainment instrument, interactive sport figures, technique guides, cell and client electronics equipped thru our video sport brands, and revenues from PowerUp Professional loyalty individuals receiving Game Informer magazine in print manufacture.
Time desk II
Inferior Earnings Mix
(unaudited)
    Thirteen Weeks Ended   Thirteen Weeks Ended
    August three, 2019   August four, 2018
Inferior Earnings (in millions):   Inferior

Earnings
  Inferior

EarningsPercent

  Inferior

Earnings
  Inferior

Earnings

Percent
                 
Contemporary video sport hardware (1)   $ 17.0     9.7 %   $ 34.6     Eleven.6 %
Contemporary video sport instrument   59.eight     21.0 %   sixty seven.9     22.6 %
Pre-owned and label video sport merchandise   159.6     42.eight %   197.5     forty three.7 %
Online sport tools   61.0     36.0 %   Sixty two.7     33.5 %
Digital   32.7     ninety.1 %   36.three     ninety.three %
Collectibles   forty eight.0     27.9 %   forty five.1     31.eight %
Diversified (2)   21.0     28.three %   25.9     32.1 %
                 
  Full   $ 399.1     31.0 %   $ 470.0     31.three %
                 
(1)  Involves sales of hardware bundles, in which bodily hardware and digital or bodily instrument are equipped collectively as a single SKU.

(2)  Involves cell and client electronics equipped thru our Simply Mac branded retail outlets. Also entails sales of PC entertainment instrument, interactive sport figures, technique guides, cell and client electronics equipped thru our video sport brands, and revenues from PowerUp Professional loyalty individuals receiving Game Informer magazine in print manufacture.

Non-GAAP outcomes

The following desk reconciles the Company’s working earnings, procure income and earnings per share as presented in its unaudited consolidated statements of operations and consuming in accordance with Normally Accredited Accounting Principles (“GAAP”) to its adjusted working earnings, procure income and earnings per share. The diluted weighted-moderate shares infamous used to calculated adjusted earnings per share for the 26 weeks ended August four, 2018 differs from GAAP weighted-moderate shares infamous and assumes the inclusion of 0.2 million total stock equivalents connected with restricted stock awards for the 26 weeks ended August four, 2018. Under GAAP, total and diluted weighted-moderate shares infamous are the the same in intervals the keep there is a procure loss.

GameStop Corp.
Time desk III
(in millions, with the exception of per share knowledge)
(unaudited)
    Thirteen Weeks Ended   Thirteen Weeks Ended   26 Weeks Ended   26 Weeks Ended
    August three, 2019   August four, 2018   August three, 2019   August four, 2018
Adjusted Working (Loss) Earnings
Working (loss) earnings   $ (446.7 )   $ 1.5     $ (429.2 )   $ forty eight.0  
Goodwill impairments   363.9         363.9      
Transformation charges   sixteen.7         sixteen.7      
Severance and other   20.three         20.three     Eleven.2  
Adjusted working (loss) earnings   $ (forty five.eight )   $ 1.5     $ (28.three )   $ 59.2  
                 
                 
Adjusted Obtain (Loss) Profits                
Obtain (loss) income   $ (415.three )   $ (24.9 )   $ (408.5 )   $ three.three  
Loss (income) from discontinued operations   1.7     (14.9 )   2.four     (22.7 )
Obtain loss from persevering with operations   $ (413.6 )   $ (39.eight )   $ (406.1 )   $ (19.four )
Goodwill impairments   363.9         363.9      
Transformation charges   sixteen.7         sixteen.7      
Severance and other   20.three         20.three     Eleven.2  
France tax audit/tax legislation       29.6         29.6  
Tax manufacture of non-GAAP adjustments   (19.three )       (19.three )   (1.5 )
Adjusted procure (loss) income   $ (32.0 )   $ (10.2 )   $ (24.5 )   $ 19.9  
                 
Adjusted (loss) earnings per share                
Traditional   $ (0.32 )   $ (0.10 )   $ (0.24 )   $ 0.20  
Diluted   $ (0.32 )   $ (0.10 )   $ (0.24 )   $ 0.20  
                 
Different of shares used in adjusted calculation                
Traditional   one hundred.0     102.1     one zero one.2     one zero one.9  
Diluted   one hundred.0     102.1     one zero one.2     102.1  

Contact

GameStop Corp. Investor Family individuals

(817) 424-2001

investorrelations@gamestop.com