Net Sales Grew 25% to $1.3 Billion
Appoints Technology Veterans Matt Furlong and Mike Recupero to CEO and CFO Positions, Respectively
GRAPEVINE, Texas, June 09, 2021 (GLOBE NEWSWIRE) — 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.
In addition, the Company intends to file with the U.S. Securities and Exchange Commission a prospectus supplement to the base prospectus included in the Company’s shelf registration statement on Form S-3 (File No. 333-251197) under which the Company may offer and sell up to 5 million shares of its common stock, from time to time, in “at-the-market” offerings. The Company intends to use net proceeds for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet. The timing and amount of any sales of shares, if any, will depend on a variety of factors, including prevailing market conditions, the trading price of shares and other factors as determined by the Company.
Before investing, read the prospectus supplement (after it is filed) and the base prospectus in the registration statement and other documents the Company files with the SEC for more complete information about the Company and the offering. Documents filed with the SEC may be obtained for free by visiting EDGAR on the SEC Web site at www.sec.gov. This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security, nor shall there be any sale of the Company’s common stock in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
GameStop today announced the appointments of Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer. Messrs. Furlong and Recupero join from Amazon, where they held senior roles and oversaw various growth initiatives during their respective tenures. The Company is continuing to actively pursue senior talent with gaming, retail and technology experience.
GameStop is continuing to suspend guidance at this time; however, it believes total net sales is the most appropriate metric to evaluate performance at this time. The Company’s second quarter sales trends continue to reflect momentum, with May total sales increasing approximately 27% compared to last year.
Webcast and Conference Call Information
A webcast with GameStop management is scheduled for June 9, 2021, at 5:00 p.m. ET to discuss the Company’s financial results and can be accessed on GameStop’s investor relations home page at http://investor.GameStop.com/. The phone number for the call is 877-451-6152 and the confirmation code is 13720011. This webcast will be archived for two months on GameStop’s corporate website.
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