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GameStop Discloses Second Quarter 2024 Results image

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)

13 Weeks ended
August 3, 2024
13 Weeks ended
July 29, 2023
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)

26 Weeks ended
August 3, 2024
26 Weeks ended
July 29, 2023
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)

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)
13 Weeks ended
August 3, 2024
13 Weeks ended
July 29, 2023
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)
26 Weeks ended
August 3, 2024
26 Weeks ended
July 29, 2023
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)
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)

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)
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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