GameStop Discloses Third Quarter 2024 Results
Grapevine, TX — GameStop Corp. released financial results for the third quarter ended November 2, 2024. T
THIRD QUARTER OVERVIEW
- Net sales were $0.860 billion for the period, compared to $1.078 billion in the prior year’s third quarter.
- Selling, general and administrative (“SG&A”) expenses were $282.0 million for the period, compared to $296.5 million in the prior year’s third quarter.
- Net income was $17.4 million for the period, compared to a net loss of $3.1 million for the prior year’s third quarter.
- Cash, cash equivalents and marketable securities were $4.616 billion at the close of the quarter.
- During the quarter, the Company completed its previously disclosed “at-the-market” equity offering program pursuant to the prospectus supplement filed with the SEC on September 6, 2024 by selling 20.0 million shares of its common stock for aggregate gross proceeds of approximately $400.0 million (before commissions and offering expenses). The Company does not anticipate any further at-the-market offerings involving the offer and sale of its common stock during the current fiscal year.
The Company will not be holding a conference call today. Additional information can be found in the Company’s Form 10-Q.
NON-GAAP MEASURES AND O
| GameStop Corp. Condensed Statements of Operations (in millions, except per share data) (unaudited) |
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| 13 Weeks Ended November 2, 2024 |
13 Weeks Ended October 28, 2023 |
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| Net sales | $ | 860.3 | $ | 1,078.3 | ||||
| Cost of sales | 603.1 | 796.5 | ||||||
| Gross profit | 257.2 | 281.8 | ||||||
| Selling, general and administrative expenses | 282.0 | 296.5 | ||||||
| Asset Impairments | 8.6 | — | ||||||
| Operating loss | (33.4 | ) | (14.7 | ) | ||||
| Interest income, net | (54.2 | ) | (12.9 | ) | ||||
| Other expense, net | — | 2.5 | ||||||
| Income (loss) before income taxes | 20.8 | (4.3 | ) | |||||
| Income tax expense (benefit) | 3.4 | (1.2 | ) | |||||
| Net income (loss) | $ | 17.4 | $ | (3.1 | ) | |||
| 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 | 437.4 | 305.3 | ||||||
| Diluted | 437.9 | 305.3 | ||||||
| Percentage of Net Sales: | ||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Cost of sales | 70.1 | 73.9 | ||||||
| Gross profit | 29.9 | 26.1 | ||||||
| Selling, general and administrative expenses | 32.8 | 27.5 | ||||||
| Asset Impairments | 1.0 | — | ||||||
| Operating loss | (3.9 | ) | (1.4 | ) | ||||
| Interest income, net | (6.3 | ) | (1.2 | ) | ||||
| Other income, net | — | 0.2 | ||||||
| Income (loss) before income taxes | 2.4 | (0.4 | ) | |||||
| Income tax expense (benefit) | 0.4 | (0.1 | ) | |||||
| Net income (loss) | 2.0 | % | (0.3 | )% | ||||
| GameStop Corp. Consolidated Statements of Operations (in millions, except per share data) (unaudited) |
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| 39 Weeks Ended November 2, 2024 |
39 Weeks Ended October 28, 2023 |
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| Net sales | $ | 2,540.4 | $ | 3,479.2 | ||||
| Cost of sales | 1,789.9 | 2,604.2 | ||||||
| Gross profit | 750.5 | 875.0 | ||||||
| Selling, general and administrative expenses | 847.9 | 964.7 | ||||||
| Asset Impairments | 8.6 | — | ||||||
| Operating loss | (106.0 | ) | (89.7 | ) | ||||
| Interest income, net | (108.6 | ) | (34.2 | ) | ||||
| Other expense, net | — | 2.4 | ||||||
| Income (loss) before income taxes | 2.6 | (57.9 | ) | |||||
| Income tax expense (benefit) | 2.6 | (1.5 | ) | |||||
| Net Income (loss) | $ | 0.0 | $ | (56.4 | ) | |||
| Net income (loss) per share: | ||||||||
| Basic loss per share | $ | 0.00 | $ | (0.18 | ) | |||
| Diluted loss per share | $ | 0.00 | $ | (0.18 | ) | |||
| Weighted-average common shares outstanding: | ||||||||
| Basic | 376.6 | 304.9 | ||||||
| Diluted | 377.1 | 304.9 | ||||||
| Percentage of Net Sales: | ||||||||
| Net sales | 100.0 | % | 100.0 | % | ||||
| Cost of sales | 70.5 | 74.9 | ||||||
| Gross profit | 29.5 | 25.1 | ||||||
| Selling, general and administrative expenses | 33.4 | 27.7 | ||||||
| Asset Impairments | 0.3 | — | ||||||
| Operating loss | (4.2 | ) | (2.6 | ) | ||||
| Interest income, net | (4.3 | ) | (1.0 | ) | ||||
| Other income, net | — | 0.1 | ||||||
| Earnings (loss) before income taxes | 0.1 | (1.7 | ) | |||||
| Income tax expense (benefit) | 0.1 | — | ||||||
| Net income (loss) | 0.0 | % | (1.7 | )% | ||||
| GameStop Corp. Condensed Consolidated Balance Sheets (in millions) (unaudited) |
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| November 2, 2024 | October 28, 2023 | |||||
| ASSETS: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 4,583.4 | $ | 909.0 | ||
| Marketable securities | 32.8 | 300.5 | ||||
| Receivables, net of allowance of $3.8 and $2.1, respectively | 57.5 | 88.3 | ||||
| Merchandise inventories, net | 830.2 | 1,021.3 | ||||
| Prepaid expenses and other current assets | 119.4 | 57.7 | ||||
| Total current assets | 5,623.3 | 2,376.8 | ||||
| Property and equipment, net of accumulated depreciation of $768.9 and $973.0, respectively | 70.5 | 114.5 | ||||
| Operating lease right-of-use assets | 425.3 | 570.4 | ||||
| Deferred income taxes | 17.7 | 16.6 | ||||
| Other noncurrent assets | 103.4 | 68.6 | ||||
| Total assets | $ | 6,240.2 | $ | 3,146.9 | ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY: | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 494.1 | $ | 812.7 | ||
| Accrued liabilities and other current liabilities | 437.0 | 425.7 | ||||
| Current portion of operating lease liabilities | 157.6 | 188.9 | ||||
| Current portion of long-term debt | 10.9 | 10.5 | ||||
| Total current liabilities | 1,099.6 | 1,437.8 | ||||
| Long-term debt, net | 9.6 | 20.0 | ||||
| Operating lease liabilities | 285.4 | 394.8 | ||||
| Other long-term liabilities | 41.1 | 31.5 | ||||
| Total liabilities | 1,435.7 | 1,884.1 | ||||
| Total stockholders’ equity | 4,804.5 | 1,262.8 | ||||
| Total liabilities and stockholders’ equity | $ | 6,240.2 | $ | 3,146.9 | ||
| GameStop Corp. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 13 Weeks Ended November 2, 2024 |
13 Weeks Ended October 28, 2023 |
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| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 17.5 | $ | (3.1 | ) | |||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 8.5 | 11.3 | ||||||
| Stock-based compensation expense, net | 4.9 | 6.4 | ||||||
| Asset impairments | 8.6 | — | ||||||
| Gain on disposal of property and equipment, net | (4.1 | ) | (5.6 | ) | ||||
| Other, net | 0.6 | 5.8 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables, net | (0.1 | ) | (13.3 | ) | ||||
| Merchandise inventories, net | (271.3 | ) | (357.5 | ) | ||||
| Prepaid expenses and other current assets | (90.5 | ) | 1.7 | |||||
| Prepaid income taxes and income taxes payable | (3.3 | ) | (3.8 | ) | ||||
| Accounts payable and accrued liabilities | 331.5 | 381.9 | ||||||
| Operating lease right-of-use assets and liabilities | 0.1 | (3.7 | ) | |||||
| Changes in other long-term liabilities | 22.2 | (1.0 | ) | |||||
| Net cash flows provided by operating activities | 24.6 | 19.1 | ||||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of property and equipment | 5.5 | 13.1 | ||||||
| Purchases of marketable securities | (21.7 | ) | — | |||||
| Capital expenditures | (4.6 | ) | (8.0 | ) | ||||
| Other | 0.3 | — | ||||||
| Net cash flows (used in) provided by investing activities | (20.5 | ) | 5.1 | |||||
| Cash flows from financing activities: | ||||||||
| Repayments of debt | (2.8 | ) | (2.6 | ) | ||||
| Proceeds from issuance of shares in at-the-market (ATM) offering, net of costs | 398.1 | — | ||||||
| Net cash flows provided by (used in) financing activities | 395.3 | (2.6 | ) | |||||
| Exchange rate effect on cash, cash equivalents and restricted cash | 0.2 | (7.6 | ) | |||||
| Increase (decrease) in cash, cash equivalents, and restricted cash | 399.6 | 14.0 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 4,217.0 | 915.2 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 4,616.6 | $ | 929.2 | ||||
| GameStop Corp. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) |
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| 39 Weeks Ended November 2, 2024 |
39 Weeks Ended October 28, 2023 |
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| Cash flows from operating activities: | ||||||||
| Net loss | $ | 0.0 | $ | (56.4 | ) | |||
| Adjustments to reconcile net loss to net cash flows from operating activities: | ||||||||
| Depreciation and amortization | 32.9 | 37.6 | ||||||
| Stock-based compensation expense, net | 10.9 | 14.0 | ||||||
| Asset impairments | 8.6 | — | ||||||
| Gain on disposal of property and equipment, net | (6.4 | ) | (5.0 | ) | ||||
| Other, net | 1.1 | 2.9 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables, net | 33.8 | 65.7 | ||||||
| Merchandise inventories, net | (198.6 | ) | (357.1 | ) | ||||
| Prepaid expenses and other current assets | (92.6 | ) | 5.7 | |||||
| Prepaid income taxes and income taxes payable | (6.7 | ) | (5.1 | ) | ||||
| Accounts payable and accrued liabilities | 187.8 | 114.5 | ||||||
| Operating lease right-of-use assets and liabilities | 0.6 | (7.1 | ) | |||||
| Changes in other long-term liabilities | 12.0 | (2.4 | ) | |||||
| Net cash flows used in operating activities | (16.6 | ) | (192.7 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds from sale of digital assets | — | 2.8 | ||||||
| Purchases of marketable securities | (29.2 | ) | (313.0 | ) | ||||
| Proceeds from the maturities and sales of marketable securities | 273.9 | 270.5 | ||||||
| Capital expenditures | (12.6 | ) | (27.2 | ) | ||||
| Proceeds from sale of property and equipment | 15.3 | 13.1 | ||||||
| Other | 0.3 | — | ||||||
| Net cash flows provided by (used in) investing activities | 247.7 | (53.8 | ) | |||||
| Cash flows from financing activities: | ||||||||
| Settlements of stock-based awards | — | (0.1 | ) | |||||
| Repayments of debt | (8.3 | ) | (8.0 | ) | ||||
| Proceeds from issuance of shares in at-the-market (ATM) offering, net of costs | 3,453.8 | — | ||||||
| Net cash flows provided by (used in) financing activities | 3,445.5 | (8.1 | ) | |||||
| Exchange rate effect on cash, cash equivalents and restricted cash | 1.1 | (12.2 | ) | |||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 3,677.7 | (266.8 | ) | |||||
| 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 | $ | 4,616.6 | $ | 929.2 | ||||
| Schedule I Sales Mix (in millions) (unaudited) |
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| 13 Weeks Ended November 2, 2024 |
13 Weeks Ended October 28, 2023 |
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| Net | Percent | Net | Percent | |||||||||
| Net Sales: | Sales | of Total | Sales | of Total | ||||||||
| Hardware and accessories(1) | $ | 417.4 | 48.5 | % | $ | 579.4 | 53.7 | % | ||||
| Software(2) | 271.8 | 31.6 | % | 321.3 | 29.8 | % | ||||||
| Collectibles | 171.1 | 19.9 | % | 177.6 | 16.5 | % | ||||||
| Total | $ | 860.3 | 100.0 | % | $ | 1,078.3 | 100.0 | % | ||||
| 39 Weeks Ended November 2, 2024 |
39 Weeks Ended October 28, 2023 |
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| Net | Percent | Net | Percent | |||||||||
| Net Sales: | Sales | of Total | Sales | of Total | ||||||||
| Hardware and accessories(1) | $ | 1,373.9 | 54.1 | % | $ | 1,902.2 | 54.7 | % | ||||
| Software(2) | 719.2 | 28.3 | % | 1,056.7 | 30.3 | % | ||||||
| Collectibles | 447.3 | 17.6 | % | 520.3 | 15.0 | % | ||||||
| Total | $ | 2,540.4 | 100.0 | % | $ | 3,479.2 | 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 video game software, digital software and PC entertainment software. |
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GameStop Corp.
Schedule II
(in millions, except per share data)
(unaudited)
Non-GAAP results
The following tables reconcile the Company’s selling, general and administrative expenses (“SG&A expense”), operating loss, net income (loss) and net income (loss) per share as presented in its unaudited consolidated statements of operations and prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) to its adjusted SG&A expense, adjusted operating loss, adjusted net income (loss), adjusted EBITDA and adjusted net income (loss) per share. 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 reconciliations below are from continuing operations only.
| 13 Weeks Ended | 13 Weeks Ended | 39 Weeks Ended | 39 Weeks Ended | |||||||||||||
| November 2, 2024 | October 28, 2023 | November 2, 2024 | October 28, 2023 | |||||||||||||
| Adjusted SG&A expense | ||||||||||||||||
| SG&A expense | $ | 282.0 | $ | 296.5 | $ | 847.9 | $ | 964.7 | ||||||||
| Transformation costs(1) | (0.2 | ) | (1.6 | ) | 13.7 | (4.7 | ) | |||||||||
| Adjusted SG&A expense | $ | 281.8 | $ | 294.9 | $ | 861.6 | $ | 960.0 | ||||||||
| Adjusted Operating Loss | ||||||||||||||||
| Operating loss | $ | (33.4 | ) | $ | (14.7 | ) | $ | (106.0 | ) | $ | (89.7 | ) | ||||
| Transformation costs(1) | 0.2 | 1.6 | (13.7 | ) | 4.7 | |||||||||||
| Asset impairments | 8.6 | — | 8.6 | — | ||||||||||||
| Adjusted operating loss | $ | (24.6 | ) | $ | (13.1 | ) | $ | (111.1 | ) | $ | (85.0 | ) | ||||
| Adjusted Net Income (Loss) | ||||||||||||||||
| Net Income (loss) | $ | 17.4 | $ | (3.1 | ) | $ | — | $ | (56.4 | ) | ||||||
| Transformation costs(1) | 0.2 | 1.6 | (13.7 | ) | 4.7 | |||||||||||
| Asset impairments(2) | 8.6 | — | 8.6 | — | ||||||||||||
| Divestitures and other | — | 2.5 | — | 1.4 | ||||||||||||
| Adjusted net income (loss) | $ | 26.2 | $ | 1.0 | $ | (5.1 | ) | $ | (50.3 | ) | ||||||
| Adjusted net income (loss) per share | ||||||||||||||||
| Basic | $ | 0.06 | $ | 0.00 | $ | (0.01 | ) | $ | (0.16 | ) | ||||||
| Diluted | 0.06 | 0.00 | (0.01 | ) | (0.16 | ) | ||||||||||
| Number of shares used in adjusted calculation | ||||||||||||||||
| Basic | 437.4 | 305.3 | 376.6 | 304.9 | ||||||||||||
| Diluted | 437.9 | 305.4 | 377.1 | 304.9 | ||||||||||||
| (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.
(2) Incurred in connection with plans initiated during the third quarter of fiscal 2024 to divest our operations in Italy and wind down our operations in Germany. |
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| 13 Weeks Ended | 13 Weeks Ended | 39 Weeks Ended | 39 Weeks Ended | |||||||||||||
| November 2, 2024 | October 28, 2023 | November 2, 2024 | October 28, 2023 | |||||||||||||
| Reconciliation of Net Income (loss) to Adjusted EBITDA | ||||||||||||||||
| Net income (loss) | $ | 17.4 | $ | (3.1 | ) | $ | — | $ | (56.4 | ) | ||||||
| Interest income, net | (54.2 | ) | (12.9 | ) | (108.6 | ) | (34.2 | ) | ||||||||
| Depreciation and amortization | 8.5 | 11.3 | 32.9 | 37.6 | ||||||||||||
| Income tax expense (benefit) | 3.4 | (1.2 | ) | 2.6 | (1.5 | ) | ||||||||||
| EBITDA | $ | (24.9 | ) | $ | (5.9 | ) | $ | (73.1 | ) | $ | (54.5 | ) | ||||
| Stock-based compensation | 4.9 | 6.9 | 10.9 | 25.1 | ||||||||||||
| Transformation costs(1) | 0.2 | 1.6 | (13.7 | ) | 4.7 | |||||||||||
| Divestitures and other | — | 2.5 | — | 1.4 | ||||||||||||
| Asset impairments(2) | 8.6 | — | 8.6 | — | ||||||||||||
| Adjusted EBITDA | $ | (11.2 | ) | $ | 5.1 | $ | (67.3 | ) | $ | (23.3 | ) | |||||
| (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.
(2) Incurred in connection with plans initiated during the third quarter of fiscal 2024 to divest our operations in Italy and wind down our operations in Germany. |
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GameStop Corp.
Schedule III
(in millions)
(unaudited)
Non-GAAP results
The following table reconciles the Company’s cash flows provided by (used in) operating activities as presented in its unaudited 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.
| 13 Weeks Ended | 13 Weeks Ended | 39 Weeks Ended | 39 Weeks Ended | ||||||||||||
| November 2, 2024 | October 28, 2023 | November 2, 2024 | October 28, 2023 | ||||||||||||
| Net cash flows provided by (used in) operating activities | $ | 24.6 | $ | 19.1 | $ | (16.6 | ) | $ | (192.7 | ) | |||||
| Capital expenditures | $ | (4.6 | ) | $ | (8.0 | ) | $ | (12.6 | ) | $ | (27.2 | ) | |||
| Free cash flow | $ | 20.0 | $ | 11.1 | $ | (29.2 | ) | $ | (219.9 | ) | |||||