Net Sales Grew 25% to $1.3 Billion
Appoints Technology Veterans Matt Furlong and Mike Recupero to CEO and CFO Positions, Respectively
GameStop Corp. (NYSE: GME), today reported results for the first quarter ended May 1, 2021.
First Quarter Fiscal 2021 Highlights
- Net sales increased 25.1% to $1.277 billion, compared to $1.021 billion in the fiscal 2020 first quarter, overcoming a nearly 12% reduction in the Company’s global store base due to strategic de-densification efforts, and continued store closures across Europe due to the COVID-19 pandemic;
- Gross margin was 25.9%, a decline of 180 basis points compared to the fiscal 2020 first quarter;
- Reported selling, general and administrative expenses were $370.3 million, a decline of $16.2 million, or 4.2%, from $386.5 million in the fiscal 2020 first quarter. Adjusted for severance, transformation and other costs, selling, general and administrative expenses were $351.7 million, a decline of $29.5 million, or 7.7%, from $381.2 million in the fiscal 2020 first quarter;
- Operating loss of ($40.8) million compared to ($108.0) million in the fiscal 2020 first quarter. Adjusted operating loss of ($21.6) million compared to ($98.8) million in the fiscal 2020 first quarter;
- Net loss of ($66.8) million, or ($1.01) per diluted share as compared to net loss of ($165.7) million, or ($2.57) per diluted share, in the fiscal 2020 first quarter. Adjusted net loss of ($29.4) million or ($0.45) per diluted share, compared to adjusted net loss of ($157.6) million or ($2.44) per diluted share in the fiscal 2020 first quarter;
- Adjusted EBITDA of ($0.7) million compared to ($75.5) million in the fiscal 2020 first quarter, and;
- Income tax expense was $1.3 million compared to income tax expense of $50.4 million in the fiscal 2020 first quarter.
Capital Structure and Liquidity Update
As of May 1, 2021, the Company had $770.8 million in cash and restricted cash, compared to $583.9 million in cash and restricted cash in the prior year. The Company had no borrowings under its asset-based revolving credit facility and no long-term debt.
On April 26, 2021, the Company announced it raised approximately $551.7 million in net proceeds through the issuance of 3.5 million shares of common stock under its “at-the-market” equity offering program, resulting in total shares outstanding of approximately 71.9 million. The Company has used and intends to continue using net proceeds to accelerate GameStop’s transformation as well as for general corporate purposes and further strengthening the balance sheet.
On April 30, 2021, the Company completed its voluntary early redemption of $216.4 million in principal amount of its 10.0% Senior Notes due 2023 on April 30, 2021. This voluntary early redemption covered the entire amount of the outstanding 10.0% Senior Notes, which represented all of the Company’s long-term debt.
GameStop has unveiled on their investor relations page that they will be livestreaming the Q1 2021 Earnings conference call webcast on YouTube.
This is highly unlike most other public companies, and may be a sign of GameStop paving the way to become more forward facing and shareholder-friendly with Ryan Cohen now serving as Chairman of the Board.