GameStop Discloses Second Quarter 2024 Results
Grapevine, TX — GameStop Corp. released financial results for the second quarter ended August 3, 2024. T
SECOND QUARTER OVERVIEW
- Net sales were $0.798 billion for the second quarter, compared to $1.164 billion in the prior year’s second quarter.
- Selling, general and administrative (“SG&A”) expenses were $270.8 million, or 33.9% of net sales for the second quarter, compared to $322.5 million, or 27.7% of net sales, in the prior year’s second quarter.
- Net income was $14.8 million for the second quarter, compared to a net loss of $2.8 million for the prior year’s second quarter.
- Cash, cash equivalents and marketable securities were $4.204 billion at the close of the quarter.
The Company will not be holding a conference call today. Stockholders can review the Company’s Form 10-Q.
| GameStop Corp. Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
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| 13 Weeks ended August 3, 2024 |
13 Weeks ended July 29, 2023 |
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| Net sales | 798.3 | 1,163.8 | |||||
| Cost of sales | 549.5 | 857.9 | |||||
| Gross profit | 248.8 | 305.9 | |||||
| Selling, general and administrative expenses | 270.8 | 322.5 | |||||
| Operating loss | (22.0 | ) | (16.6 | ) | |||
| Interest income, net | (39.5 | ) | (11.6 | ) | |||
| Other income, net | — | (2.0 | ) | ||||
| Earnings (loss) before income taxes | 17.5 | (3.0 | ) | ||||
| Income tax expense (benefit) | 2.7 | (0.2 | ) | ||||
| Net income (loss) | $ | 14.8 | $ | (2.8 | ) | ||
| Net income (loss) per share: | |||||||
| Basic Income (loss) per share | $ | 0.04 | $ | (0.01 | ) | ||
| Diluted income (loss) per share | $ | 0.04 | $ | (0.01 | ) | ||
| Weighted-average common shares outstanding: | |||||||
| Basic | 386.4 | 304.8 | |||||
| Diluted | 387.2 | 304.8 | |||||
| Percentage of Net Sales: | |||||||
| Net sales | 100.0 | % | 100.0 | % | |||
| Cost of sales | 68.8 | 73.7 | |||||
| Gross profit | 31.2 | 26.3 | |||||
| Selling, general and administrative expenses | 33.9 | 27.7 | |||||
| Asset Impairments | — | — | |||||
| Operating loss | (2.8 | ) | (1.4 | ) | |||
| Interest income, net | (4.9 | ) | (1.0 | ) | |||
| Other income, net | — | (0.2 | ) | ||||
| Earnings (loss) before income taxes | 2.2 | (0.3 | ) | ||||
| Income tax expense (benefit) | 0.3 | — | |||||
| Net income (loss) | 1.9 | % | (0.2 | )% | |||
| GameStop Corp. Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
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| 26 Weeks ended August 3, 2024 |
26 Weeks ended July 29, 2023 |
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| Net sales | 1,680.1 | 2,400.9 | |||||
| Cost of sales | 1,186.8 | 1,807.7 | |||||
| Gross profit | 493.3 | 593.2 | |||||
| Selling, general and administrative expenses | 565.9 | 668.2 | |||||
| Operating loss | (72.6 | ) | (75.0 | ) | |||
| Interest income, net | (54.4 | ) | (21.3 | ) | |||
| Other income, net | — | (0.1 | ) | ||||
| Loss before income taxes | (18.2 | ) | (53.6 | ) | |||
| Income tax benefit | (0.7 | ) | (0.3 | ) | |||
| Net loss | $ | (17.5 | ) | $ | (53.3 | ) | |
| Loss per share: | |||||||
| Basic loss per share | $ | (0.05 | ) | $ | (0.17 | ) | |
| Diluted loss per share | $ | (0.05 | ) | $ | (0.17 | ) | |
| Weighted-average common shares outstanding: | |||||||
| Basic | 346.2 | 304.7 | |||||
| Diluted | 346.2 | 304.7 | |||||
| Percentage of Net Sales: | |||||||
| Net sales | 100.0 | % | 100.0 | % | |||
| Cost of sales | 70.6 | 75.3 | |||||
| Gross profit | 29.4 | 24.7 | |||||
| Selling, general and administrative expenses | 33.7 | 27.8 | |||||
| Asset Impairments | — | — | |||||
| Operating loss | (4.3 | ) | (3.1 | ) | |||
| Interest income, net | (3.2 | ) | (0.9 | ) | |||
| Loss before income taxes | (1.1 | ) | (2.2 | ) | |||
| Income tax expense (benefit) | — | — | |||||
| Net loss | (1.1 | )% | (2.2 | )% | |||
| GameStop Corp. Condensed Consolidated Balance Sheets (in millions) (unaudited) |
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| August 3, 2024 | July 29, 2023 | ||||||
| ASSETS: | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 4,193.1 | $ | 894.7 | |||
| Marketable securities | 11.1 | 300.0 | |||||
| Receivables, net of allowance of $4.4 and $2.2, respectively | 59.7 | 75.6 | |||||
| Merchandise inventories, net | 560.0 | 676.9 | |||||
| Prepaid expenses and other current assets | 60.0 | 58.0 | |||||
| Total current assets | 4,883.9 | 2,005.2 | |||||
| Property and equipment, net of accumulated depreciation of $846.0 and $983.0, respectively | 78.9 | 119.3 | |||||
| Operating lease right-of-use assets | 490.9 | 583.0 | |||||
| Deferred income taxes | 17.5 | 17.6 | |||||
| Other noncurrent assets | 65.1 | 78.6 | |||||
| Total assets | $ | 5,536.3 | $ | 2,803.7 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 220.5 | $ | 378.0 | |||
| Accrued liabilities and other current liabilities | 377.8 | 487.5 | |||||
| Current portion of operating lease liabilities | 174.2 | 194.9 | |||||
| Current portion of long-term debt | 11.0 | 11.0 | |||||
| Total current liabilities | 783.6 | 1,071.4 | |||||
| Long-term debt, net | 12.4 | 23.6 | |||||
| Operating lease liabilities | 335.9 | 405.7 | |||||
| Other long-term liabilities | 21.1 | 35.8 | |||||
| Total liabilities | 1,152.9 | 1,536.5 | |||||
| Total stockholders’ equity | 4,383.4 | 1,267.2 | |||||
| Total liabilities and stockholders’ equity | $ | 5,536.3 | $ | 2,803.7 | |||
| GameStop Corp. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 13 Weeks ended August 3, 2024 |
13 Weeks ended July 29, 2023 |
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| Cash flows from operating activities: | |||||||
| Net profit/(loss) | $ | 14.8 | $ | (2.8 | ) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||
| Depreciation and amortization | 7.6 | 12.6 | |||||
| Stock-based compensation expense, net | 5.4 | (0.3 | ) | ||||
| Gain on disposal of property and equipment, net | (2.6 | ) | — | ||||
| Other, net | 1.1 | (3.1 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Receivables, net | 0.5 | 43.4 | |||||
| Merchandise inventories, net | 115.9 | 83.5 | |||||
| Prepaid expenses and other current assets | (10.6 | ) | 8.0 | ||||
| Prepaid income taxes and income taxes payable | 1.7 | (1.1 | ) | ||||
| Accounts payable and accrued liabilities | (55.9 | ) | (245.1 | ) | |||
| Operating lease right-of-use assets and liabilities | (0.6 | ) | (2.8 | ) | |||
| Changes in other long-term liabilities | (8.7 | ) | (1.4 | ) | |||
| Net cash flows provided by (used in) operating activities | 68.6 | (109.1 | ) | ||||
| Cash flows from investing activities: | |||||||
| Proceeds from sale of property and equipment | 9.8 | — | |||||
| Proceeds from sale of digital assets | — | 1.5 | |||||
| Purchases of marketable securities | — | (102.0 | ) | ||||
| Proceeds from the maturities and sales of marketable securities | 72.0 | 58.3 | |||||
| Capital expenditures | (3.1 | ) | (10.1 | ) | |||
| Other | (0.3 | ) | 0.1 | ||||
| Net cash flows provided by (used in) investing activities | 78.4 | (52.2 | ) | ||||
| Cash flows from financing activities: | |||||||
| Repayments of debt | (2.8 | ) | (2.7 | ) | |||
| Proceeds from issuance of shares in at-the-market (ATM) offering, net of costs | 3,055.7 | — | |||||
| Net cash flows provided by (used in) financing activities | 3,052.9 | (2.7 | ) | ||||
| Exchange rate effect on cash, cash equivalents and restricted cash | (0.4 | ) | (0.6 | ) | |||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 3,199.5 | (164.6 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,017.5 | 1,079.8 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 4,217.0 | $ | 915.2 | |||
| GameStop Corp. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 26 Weeks ended August 3, 2024 |
26 Weeks ended July 29, 2023 |
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| Cash flows from operating activities: | |||||||
| Net loss | $ | (17.5 | ) | $ | (53.3 | ) | |
| Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||
| Depreciation and amortization | 24.4 | 26.3 | |||||
| Stock-based compensation expense, net | 6.0 | 7.6 | |||||
| (Gain) loss on disposal of property and equipment, net | (2.3 | ) | 0.6 | ||||
| Other, net | 0.5 | (2.9 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Receivables, net | 33.9 | 79.0 | |||||
| Merchandise inventories, net | 72.7 | 0.4 | |||||
| Prepaid expenses and other current assets | (2.1 | ) | 4.0 | ||||
| Prepaid income taxes and income taxes payable | (3.4 | ) | (1.3 | ) | |||
| Accounts payable and accrued liabilities | (143.7 | ) | (267.4 | ) | |||
| Operating lease right-of-use assets and liabilities | 0.5 | (3.4 | ) | ||||
| Changes in other long-term liabilities | (10.2 | ) | (1.4 | ) | |||
| Net cash flows used in operating activities | (41.2 | ) | (211.8 | ) | |||
| Cash flows from investing activities: | |||||||
| Proceeds from sale of property and equipment | 9.8 | — | |||||
| Proceeds from sale of digital assets | — | 2.8 | |||||
| Purchases of marketable securities | (7.5 | ) | (313.0 | ) | |||
| Proceeds from the maturities and sales of marketable securities | 273.9 | 270.5 | |||||
| Capital expenditures | (8.0 | ) | (19.2 | ) | |||
| Net cash flows provided by (used in) investing activities | 268.2 | (58.9 | ) | ||||
| Cash flows from financing activities: | |||||||
| Settlements of stock-based awards | — | (0.1 | ) | ||||
| Repayments of debt | (5.5 | ) | (5.4 | ) | |||
| Proceeds from issuance of shares in at-the-market (ATM) offering, net of costs | 3,055.7 | — | |||||
| Net cash flows provided by (used in) financing activities | 3,050.2 | (5.5 | ) | ||||
| Exchange rate effect on cash, cash equivalents and restricted cash | 0.9 | (4.6 | ) | ||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 3,278.1 | (280.8 | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | 938.9 | 1,196.0 | |||||
| Cash, cash equivalents and restricted cash at end of period | $ | 4,217.0 | $ | 915.2 | |||
| Schedule I Sales Mix (in millions) (unaudited) |
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| 13 Weeks ended August 3, 2024 | 13 Weeks ended July 29, 2023 | ||||||||||||||
| Net | Percent | Net | Percent | ||||||||||||
| Net Sales: | Sales | of Total | Sales | of Total | |||||||||||
| Hardware and accessories (1) | $ | 451.2 | 56.5 | % | $ | 597.0 | 51.3 | % | |||||||
| Software (2) | 207.7 | 26.0 | 397.0 | 34.1 | |||||||||||
| Collectibles | 139.4 | 17.5 | 169.8 | 14.6 | |||||||||||
| Total | $ | 798.3 | 100.0 | % | $ | 1,163.8 | 100.0 | % | |||||||
| 26 Weeks ended August 3, 2024 | 26 Weeks ended July 29, 2023 | ||||||||||||||
| Net | Percent | Net | Percent | ||||||||||||
| Net Sales: | Sales | of Total | Sales | of Total | |||||||||||
| Hardware and accessories (1) | $ | 956.5 | 56.9 | % | $ | 1,322.8 | 55.1 | % | |||||||
| Software (2) | 447.4 | 26.6 | 735.4 | 30.6 | |||||||||||
| Collectibles | 276.2 | 16.5 | 342.7 | 14.3 | |||||||||||
| Total | $ | 1,680.1 | 100.0 | % | $ | 2,400.9 | 100.0 | % | |||||||
| GameStop Corp. Schedule II (in millions, except per share data) (unaudited) |
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| 13 Weeks Ended | 13 Weeks Ended | 26 Weeks Ended | 26 Weeks Ended | ||||||||||||
| August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | ||||||||||||
| Adjusted SG&A expense | |||||||||||||||
| SG&A expense | $ | 270.8 | $ | 322.5 | $ | 565.9 | $ | 668.2 | |||||||
| Transformation costs(1) | 9.6 | 4.1 | 13.9 | (3.1 | ) | ||||||||||
| Adjusted SG&A expense | $ | 280.4 | $ | 326.6 | $ | 579.8 | $ | 665.1 | |||||||
| Adjusted Operating Loss | |||||||||||||||
| Operating loss | $ | (22.0 | ) | $ | (16.6 | ) | $ | (72.6 | ) | $ | (75.0 | ) | |||
| Transformation costs(1) | (9.6 | ) | (4.1 | ) | (13.9 | ) | 3.1 | ||||||||
| Adjusted operating loss | $ | (31.6 | ) | $ | (20.7 | ) | $ | (86.5 | ) | $ | (71.9 | ) | |||
| Adjusted Net Income (loss) | |||||||||||||||
| Net Income (loss) | $ | 14.8 | $ | (2.8 | ) | $ | (17.5 | ) | $ | (53.3 | ) | ||||
| Transformation costs(1) | (9.6 | ) | (4.1 | ) | (13.9 | ) | 3.1 | ||||||||
| Divestitures and other | — | (2.1 | ) | — | (1.1 | ) | |||||||||
| Adjusted net income (loss) | $ | 5.2 | $ | (9.0 | ) | $ | (31.4 | ) | $ | (51.3 | ) | ||||
| Adjusted net income (loss) per share | |||||||||||||||
| Basic | $ | 0.01 | $ | (0.03 | ) | $ | (0.09 | ) | $ | (0.17 | ) | ||||
| Diluted | 0.01 | (0.03 | ) | (0.09 | ) | (0.17 | ) | ||||||||
| Number of shares used in adjusted calculation | |||||||||||||||
| Basic | 386.4 | 304.8 | 346.2 | 304.7 | |||||||||||
| Diluted | 387.3 | 304.8 | 346.2 | 304.7 | |||||||||||
| (1) Transformation costs include severance, stock-based compensation forfeitures related to workforce optimization efforts and departures of key personnel, adjustments to reserves for expenses for consultants and advisors related to transformation initiatives, and other costs in connection with the transformation initiatives. | |||||||||||||||
| 13 Weeks Ended | 13 Weeks Ended | 26 Weeks Ended | 26 Weeks Ended | ||||||||||||
| August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | ||||||||||||
| Reconciliation of Net Income (loss) to Adjusted EBITDA | |||||||||||||||
| Net income (loss) | $ | 14.8 | $ | (2.8 | ) | $ | (17.5 | ) | $ | (53.3 | ) | ||||
| Interest income, net | (39.5 | ) | (11.6 | ) | (54.3 | ) | (21.3 | ) | |||||||
| Depreciation and amortization | 7.6 | 12.6 | 24.4 | 26.3 | |||||||||||
| Income tax expense (benefit) | 2.7 | (0.2 | ) | (0.7 | ) | (0.3 | ) | ||||||||
| EBITDA | $ | (14.4 | ) | $ | (2.0 | ) | $ | (48.1 | ) | $ | (48.7 | ) | |||
| Stock-based compensation | 6.0 | 9.2 | 12.9 | 18.2 | |||||||||||
| Transformation costs(1) | (9.6 | ) | (4.1 | ) | (13.9 | ) | 3.1 | ||||||||
| Divestitures and other | — | (2.1 | ) | — | (1.1 | ) | |||||||||
| Adjusted EBITDA | $ | (18.0 | ) | $ | 1.0 | $ | (49.1 | ) | $ | (28.5 | ) | ||||
| GameStop Corp. Schedule III (in millions) (unaudited) |
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| 13 Weeks Ended | 13 Weeks Ended | 26 Weeks Ended | 26 Weeks Ended | ||||||||||||
| August 3, 2024 | July 29, 2023 | August 3, 2024 | July 29, 2023 | ||||||||||||
| Net cash flows provided by (used in) operating activities | $ | 68.6 | $ | (109.1 | ) | $ | (41.2 | ) | $ | (211.8 | ) | ||||
| Capital expenditures | (3.1 | ) | (10.1 | ) | (8.0 | ) | (19.2 | ) | |||||||
| Free cash flow | $ | 65.5 | $ | (119.2 | ) | $ | (49.2 | ) | $ | (231.0 | ) | ||||
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