GameStop Reports Fourth Quarter and Fiscal Year 2023 Results
Grapevine, TX — GameStop Corp. released financial results for the fourth quarter and fiscal year ended February 3, 2024. The Company’s consolidated financial statements, including GAAP and non-GAAP results, are below. The Company’s Form 10-K and supplemental information can be found at https://investor.gamestop.com.
FOURTH QUARTER OVERVIEW
- Net sales were $1.794 billion for the fourth quarter, compared to $2.226 billion in the prior year’s fourth quarter.
- Selling, general and administrative (“SG&A”) expenses were $359.2 million, or 20.0% of net sales, for the fourth quarter, compared to $453.4 million, or 20.4% of net sales, in the prior year’s fourth quarter.
- Net income was $63.1 million for the fourth quarter, compared to net income of $48.2 million for the prior year’s fourth quarter.
- Cash, cash equivalents and marketable securities were $1.199 billion at the close of the quarter.
- Long-term debt remains limited to a low-interest, unsecured term loan associated with the French government’s response to COVID-19.
FULL YEAR OVERVIEW
- Net sales were $5.273 billion for fiscal year 2023, compared to $5.927 billion for fiscal year 2022.
- SG&A expenses were $1.324 billion, or 25.1% of net sales, for fiscal year 2023, compared to $1.681 billion, or 28.4% of net sales, for fiscal year 2022.
- Net income was $6.7 million for fiscal year 2023, compared to a net loss of $313.1 million for fiscal year 2022.
- Adjusted EBITDA of $64.7 million for fiscal year 2023, compared to adjusted EBITDA of ($192.7) million for fiscal year 2022.
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| GameStop Corp. Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
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| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
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| Net sales | $ | 1,793.6 | $ | 2,226.4 | ||||
| Cost of sales | 1,374.4 | 1,726.6 | ||||||
| Gross profit | 419.2 | 499.8 | ||||||
| Selling, general and administrative expenses | 359.2 | 453.4 | ||||||
| Asset impairments | 4.8 | 0.2 | ||||||
| Operating earnings | 55.2 | 46.2 | ||||||
| Interest income, net | (15.3 | ) | (6.2 | ) | ||||
| Other gain, net | (0.5 | ) | — | |||||
| Earnings before income taxes | 71.0 | 52.4 | ||||||
| Income tax expense, net | 7.9 | 4.2 | ||||||
| Net income | $ | 63.1 | $ | 48.2 | ||||
| Earnings per share: | ||||||||
| Basic earnings per share | $ | 0.21 | $ | 0.16 | ||||
| Diluted earnings per share | 0.21 | 0.16 | ||||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 305.6 | 304.3 | ||||||
| Diluted | 305.7 | 304.5 | ||||||
| Percentage of Net Sales: | ||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Cost of sales | 76.6 | % | 77.6 | % | ||||
| Gross profit | 23.4 | % | 22.4 | % | ||||
| Selling, general and administrative expenses | 20.0 | % | 20.4 | % | ||||
| Asset impairments | 0.3 | % | — | % | ||||
| Operating earnings | 3.1 | % | 2.1 | % | ||||
| Interest income, net | (0.9 | )% | (0.3 | )% | ||||
| Other gain, net | — | % | — | % | ||||
| Earnings before income taxes | 4.0 | % | 2.4 | % | ||||
| Income tax expense, net | 0.5 | % | 0.2 | % | ||||
| Net income | 3.5 | % | 2.2 | % | ||||
| GameStop Corp. Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
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| 53 weeks ended February 3, 2024 |
52 weeks ended January 28, 2023 |
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| Net sales | $ | 5,272.8 | $ | 5,927.2 | ||||
| Cost of sales | 3,978.6 | 4,555.1 | ||||||
| Gross profit | 1,294.2 | 1,372.1 | ||||||
| Selling, general and administrative expenses | 1,323.9 | 1,681.0 | ||||||
| Asset impairments | 4.8 | 2.7 | ||||||
| Operating loss | (34.5 | ) | (311.6 | ) | ||||
| Interest income, net | (49.5 | ) | (9.5 | ) | ||||
| Other loss, net | 1.9 | — | ||||||
| Income (loss) before income taxes | 13.1 | (302.1 | ) | |||||
| Income tax expense, net | 6.4 | 11.0 | ||||||
| Net income (loss) | $ | 6.7 | $ | (313.1 | ) | |||
| Earnings (loss) per share: | ||||||||
| Basic earnings (loss) per share | $ | 0.02 | $ | (1.03 | ) | |||
| Diluted earnings (loss) per share | 0.02 | (1.03 | ) | |||||
| Weighted average common shares outstanding: | ||||||||
| Basic | 305.1 | 304.2 | ||||||
| Diluted | 305.2 | 304.2 | ||||||
| Percentage of Net Sales: | ||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Cost of sales | 75.5 | % | 76.9 | % | ||||
| Gross profit | 24.5 | % | 23.1 | % | ||||
| Selling, general and administrative expenses | 25.1 | % | 28.4 | % | ||||
| Asset impairments | 0.1 | % | — | % | ||||
| Operating loss | (0.7 | )% | (5.3 | )% | ||||
| Interest income, net | (0.9 | )% | (0.2 | )% | ||||
| Other loss, net | — | % | — | % | ||||
| Income (loss) before income taxes | 0.2 | % | (5.1 | )% | ||||
| Income tax expense, net | 0.1 | % | 0.2 | % | ||||
| Net income (loss) | 0.1 | % | (5.3 | )% | ||||
| GameStop Corp. Consolidated Balance Sheets (in millions) (unaudited) |
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| February 3, 2024 |
January 28, 2023 |
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| Current assets: | ||||||
| Cash and cash equivalents | $ | 921.7 | $ | 1,139.0 | ||
| Marketable securities | 277.6 | 251.6 | ||||
| Receivables, net of allowance of $4.4 and $2.2, respectively | 91.0 | 153.9 | ||||
| Merchandise inventories, net | 632.5 | 682.9 | ||||
| Prepaid expenses and other current assets | 51.4 | 96.3 | ||||
| Total current assets | 1,974.2 | 2,323.7 | ||||
| Property and equipment, net of accumulated depreciation of $851.2 and $1,006.8, respectively | 94.9 | 136.5 | ||||
| Operating lease right-of-use assets | 555.8 | 560.8 | ||||
| Deferred income taxes | 17.3 | 18.3 | ||||
| Other noncurrent assets | 66.8 | 74.1 | ||||
| Total assets | $ | 2,709.0 | $ | 3,113.4 | ||
| Current liabilities: | ||||||
| Accounts payable | $ | 324.0 | $ | 531.3 | ||
| Accrued liabilities and other current liabilities | 412.0 | 602.3 | ||||
| Current portion of operating lease liabilities | 187.7 | 194.7 | ||||
| Current portion of long-term debt | 10.8 | 10.8 | ||||
| Total current liabilities | 934.5 | 1,339.1 | ||||
| Long-term debt | 17.7 | 28.7 | ||||
| Operating lease liabilities | 386.6 | 382.4 | ||||
| Other long-term liabilities | 31.6 | 40.9 | ||||
| Total liabilities | 1,370.4 | 1,791.1 | ||||
| Stockholders’ equity | 1,338.6 | 1,322.3 | ||||
| Total liabilities and stockholders’ equity | $ | 2,709.0 | $ | 3,113.4 | ||
| GameStop Corp. Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
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| Cash flows from operating activities: | ||||||||
| Net income | $ | 63.1 | $ | 48.2 | ||||
| Adjustments to reconcile net income to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 18.6 | 14.2 | ||||||
| Gain on sale of digital assets | — | (0.1 | ) | |||||
| Digital asset impairments | — | 0.1 | ||||||
| Asset impairments | 4.8 | 0.2 | ||||||
| Stock-based compensation expense, net | 8.2 | 7.9 | ||||||
| Deferred income taxes | (0.1 | ) | (2.6 | ) | ||||
| Loss (gain) on disposal of property and equipment, net | 6.5 | (2.6 | ) | |||||
| Other, net | (2.1 | ) | (5.7 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables, net | (0.7 | ) | (30.1 | ) | ||||
| Merchandise inventories, net | 397.0 | 474.6 | ||||||
| Prepaid expenses and other assets | 4.7 | 13.5 | ||||||
| Prepaid income taxes and income taxes payable | 2.7 | 171.5 | ||||||
| Accounts payable and accrued liabilities | (512.2 | ) | (354.9 | ) | ||||
| Operating lease right-of-use assets and lease liabilities | (1.0 | ) | 2.8 | |||||
| Changes in other long-term liabilities | (0.5 | ) | 1.2 | |||||
| Net cash flows (used in) provided by operating activities | (11.0 | ) | 338.2 | |||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (7.7 | ) | (11.6 | ) | ||||
| Purchases of marketable securities | (13.8 | ) | (39.8 | ) | ||||
| Proceeds from maturities of marketable securities | 42.1 | 27.5 | ||||||
| Proceeds from sale of digital assets | — | 4.5 | ||||||
| Other | — | 0.3 | ||||||
| Net cash flows provided by (used in) investing activities | 20.6 | (19.1 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Repayments of French term loans | (2.7 | ) | (3.9 | ) | ||||
| Settlement of stock-based awards | (0.8 | ) | (0.7 | ) | ||||
| Net cash flows used in financing activities | (3.5 | ) | (4.6 | ) | ||||
| Exchange rate effect on cash, cash equivalents and restricted cash | 3.6 | 22.0 | ||||||
| Increase in cash, cash equivalents and restricted cash | 9.7 | 336.5 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 929.2 | 859.5 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 938.9 | $ | 1,196.0 | ||||
| GameStop Corp. Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 53 weeks ended February 3, 2024 |
52 weeks ended January 28, 2023 |
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| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 6.7 | $ | (313.1 | ) | |||
| Adjustments to reconcile net income (loss) to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 56.2 | 61.7 | ||||||
| Asset impairments | 4.8 | 2.7 | ||||||
| Stock-based compensation expense, net | 22.2 | 40.1 | ||||||
| Gain on sale of digital assets | — | (7.2 | ) | |||||
| Digital asset impairments | — | 34.0 | ||||||
| Deferred income taxes | (0.1 | ) | (2.6 | ) | ||||
| Loss on disposal of property and equipment, net | 1.5 | 2.5 | ||||||
| Other, net | 0.8 | 1.2 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables, net | 65.0 | (16.8 | ) | |||||
| Merchandise inventories, net | 39.9 | 229.6 | ||||||
| Prepaid expenses and other assets | 10.4 | (25.2 | ) | |||||
| Prepaid income taxes and income taxes payable | (2.4 | ) | 172.4 | |||||
| Accounts payable and accrued liabilities | (397.7 | ) | (66.2 | ) | ||||
| Operating lease right-of-use assets and lease liabilities | (8.1 | ) | (4.9 | ) | ||||
| Changes in other long-term liabilities | (2.9 | ) | — | |||||
| Net cash flows (used in) provided by operating activities | (203.7 | ) | 108.2 | |||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (34.9 | ) | (55.9 | ) | ||||
| Purchases of marketable securities | (326.8 | ) | (276.8 | ) | ||||
| Proceeds from maturities and sales of marketable securities | 312.6 | 27.5 | ||||||
| Proceeds from sale of property and equipment | 13.1 | — | ||||||
| Proceeds from sale of digital assets | 2.8 | 81.9 | ||||||
| Other | — | 0.6 | ||||||
| Net cash flows used in investing activities | (33.2 | ) | (222.7 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayments of French term loans | (10.7 | ) | (3.9 | ) | ||||
| Settlement of stock-based awards | (0.9 | ) | (4.0 | ) | ||||
| Net cash flows used in financing activities | (11.6 | ) | (7.9 | ) | ||||
| Exchange rate effect on cash, cash equivalents and restricted cash | (8.6 | ) | (1.5 | ) | ||||
| Decrease in cash, cash equivalents and restricted cash | (257.1 | ) | (123.9 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,196.0 | 1,319.9 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 938.9 | $ | 1,196.0 | ||||
| GameStop Corp. Schedule I Sales Mix (in millions) (unaudited) |
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| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
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| Net Sales: | Net Sales |
Percent of Total |
Net Sales |
Percent of Total |
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| Hardware and accessories(1) | $ | 1,094.6 | 61.0 | % | $ | 1,242.8 | 55.8 | % | ||||
| Software(2) | 465.3 | 26.0 | % | 670.4 | 30.1 | % | ||||||
| Collectibles | 233.7 | 13.0 | % | 313.2 | 14.1 | % | ||||||
| Total | $ | 1,793.6 | 100.0 | % | $ | 2,226.4 | 100.0 | % | ||||
| 53 weeks ended February 3, 2024 |
52 weeks ended January 28, 2023 |
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| Net Sales: | Net Sales |
Percent of Total |
Net Sales |
Percent of Total |
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| Hardware and accessories(1) | $ | 2,996.8 | 56.8 | % | $ | 3,140.0 | 53.0 | % | ||||
| Software(2) | 1,522.0 | 28.9 | % | 1,822.6 | 30.7 | % | ||||||
| Collectibles | 754.0 | 14.3 | % | 964.6 | 16.3 | % | ||||||
| Total | $ | 5,272.8 | 100.0 | % | $ | 5,927.2 | 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. | ||||||||||||
| (2) Includes sales of new and pre-owned gaming software, digital software and PC entertainment software. | ||||||||||||
| GameStop Corp. Schedule II (in millions) (unaudited) |
Non-GAAP results
The following tables reconcile the Company’s SG&A expenses, operating earnings (loss), net income (loss) and earnings (loss) per share as presented in its consolidated statements of operations and prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to its adjusted SG&A expenses, adjusted operating income (loss), adjusted net income (loss), adjusted earnings (loss) per share and adjusted EBITDA. The diluted weighted-average shares outstanding used to calculate 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 14 and 53 weeks ended February 3, 2024, respectively, include provisions for the tax effects of non-GAAP adjustments. The reconciliations below are from continuing operations only.
| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
53 Weeks Ended February 3, 2024 |
52 Weeks Ended January 28, 2023 |
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| Adjusted SG&A Expenses | ||||||||||||||||
| SG&A expenses | $ | 359.2 | $ | 453.4 | $ | 1,323.9 | $ | 1,681.0 | ||||||||
| Transformation costs(1) | (0.3 | ) | (0.5 | ) | (5.0 | ) | (0.9 | ) | ||||||||
| Adjusted SG&A expenses | $ | 358.9 | $ | 452.9 | $ | 1,318.9 | $ | 1,680.1 | ||||||||
| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
53 Weeks Ended February 3, 2024 |
52 Weeks Ended January 28, 2023 |
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| Adjusted Operating Income (Loss) | ||||||||||||||
| Operating earnings (loss) | $ | 55.2 | $ | 46.2 | $ | (34.5 | ) | $ | (311.6 | ) | ||||
| Transformation costs(1) | 0.3 | 0.5 | 5.0 | 0.9 | ||||||||||
| Asset impairments | 4.8 | 0.2 | 4.8 | 2.7 | ||||||||||
| Adjusted operating income (loss) | $ | 60.3 | $ | 46.9 | $ | (24.7 | ) | $ | (308.0 | ) | ||||
| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
53 Weeks Ended February 3, 2024 |
52 Weeks Ended January 28, 2023 |
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| Adjusted Net Income (Loss) | ||||||||||||||
| Net income (loss) | $ | 63.1 | $ | 48.2 | $ | 6.7 | $ | (313.1 | ) | |||||
| Transformation costs(1) | 0.3 | 0.5 | 5.0 | 0.9 | ||||||||||
| Asset impairments | 4.8 | 0.2 | 4.8 | 2.7 | ||||||||||
| Divestitures and other(2) | (0.5 | ) | — | 0.9 | — | |||||||||
| Adjusted net income (loss) | $ | 67.7 | $ | 48.9 | $ | 17.4 | $ | (309.5 | ) | |||||
| Adjusted Earnings (Loss) Per Share | ||||||||||||||
| Basic | $ | 0.22 | $ | 0.16 | $ | 0.06 | $ | (1.02 | ) | |||||
| Diluted | $ | 0.22 | $ | 0.16 | $ | 0.06 | $ | (1.02 | ) | |||||
| Number of shares used in adjusted calculation | ||||||||||||||
| Basic | 305.6 | 304.3 | 305.1 | 304.2 | ||||||||||
| Diluted | 305.7 | 304.5 | 305.2 | 304.2 | ||||||||||
| (1) For the fourth quarter and fiscal year 2023, transformation costs include severance, stock-based compensation forfeitures related to workforce optimization efforts in the U.S., and other costs in connection with our transformation initiatives. This amount excludes accelerated lease amortization and fixed asset costs which have not been factored into our non-GAAP measures. For the fourth quarter and fiscal year 2022, transformation costs includes the impact of stock-based compensation forfeitures partially offset by cash severance costs related to workforce optimization efforts in connection with our transformation initiatives.
(2) Divestitures and other includes an overall net loss from our divestiture of business operations in Europe. |
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| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
53 Weeks Ended February 3, 2024 |
52 Weeks Ended January 28, 2023 |
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| Reconciliation of Adjusted EBITDA to Net Income (Loss) | ||||||||||||||||
| Net income (loss) | $ | 63.1 | $ | 48.2 | $ | 6.7 | $ | (313.1 | ) | |||||||
| Interest income, net | (15.3 | ) | (6.2 | ) | (49.5 | ) | (9.5 | ) | ||||||||
| Depreciation and amortization | 18.6 | 14.2 | 56.2 | 61.7 | ||||||||||||
| Income tax expense, net | 7.9 | 4.2 | 6.4 | 11.0 | ||||||||||||
| EBITDA | $ | 74.3 | $ | 60.4 | $ | 19.8 | $ | (249.9 | ) | |||||||
| Stock-based compensation expense | 9.1 | 21.4 | 34.2 | 53.6 | ||||||||||||
| Transformation costs(1) | 0.3 | 0.5 | 5.0 | 0.9 | ||||||||||||
| Asset impairments | 4.8 | 0.2 | 4.8 | 2.7 | ||||||||||||
| Divestitures and other(2) | (0.5 | ) | — | 0.9 | — | |||||||||||
| Adjusted EBITDA | $ | 88.0 | $ | 82.5 | $ | 64.7 | $ | (192.7 | ) | |||||||
| (1) For the fourth quarter and fiscal year 2023, transformation costs include severance, stock-based compensation forfeitures related to workforce optimization efforts in the U.S., and other costs in connection with our transformation initiatives. This amount excludes accelerated lease amortization and fixed asset costs which have not been factored into our non-GAAP measures. For the fourth quarter and fiscal year 2022, transformation costs includes the impact of stock-based compensation forfeitures partially offset by cash severance costs related to workforce optimization efforts in connection with our transformation initiatives.
(2) Divestitures and other includes an overall net loss from our divestiture of business operations in Europe. |
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| GameStop Corp. Schedule III (in millions) (unaudited) |
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Non-GAAP results
The following table reconciles the Company’s cash flows (used in) provided by operating activities as presented in its Consolidated Statements of Cash Flows and prepared in accordance with GAAP to its free cash flow. Free cash flow is considered a non-GAAP financial measure. Management believes, however, that free cash flow, which measures our ability to generate additional cash from our business operations, is an important financial measure for use by investors in evaluating the Company’s financial performance.
| 14 Weeks Ended February 3, 2024 |
13 Weeks Ended January 28, 2023 |
53 Weeks Ended February 3, 2024 |
52 Weeks Ended January 28, 2023 |
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| Net cash flows (used in) provided by operating activities | $ | (11.0 | ) | $ | 338.2 | $ | (203.7 | ) | $ | 108.2 | |||||
| Capital expenditures | (7.7 | ) | (11.6 | ) | (34.9 | ) | (55.9 | ) | |||||||
| Free cash flow | $ | (18.7 | ) | $ | 326.6 | $ | (238.6 | ) | $ | 52.3 | |||||
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