GameStop Reports Fourth Quarter and Fiscal Year 2022 Results
GameStop reported its financial results for Q4 and the fiscal year ended January 28, 2023. Net sales in Q4 reached $2.226 billion, slightly down from $2.254 billion year-over-year. However, the company posted a net income of $48.2 million, a significant improvement from a net loss of $147.5 million in the previous year. SG&A expenses decreased to 20.4% of sales, down from 23.9%. For the full fiscal year, sales totaled $5.927 billion, compared to $6.011 billion in 2021. GameStop is focusing on efficiency, profitability, and long-term growth, particularly in collectibles. Cash and equivalents stood at $1.391 billion.
- Net income improved significantly to $48.2 million from a net loss of $147.5 million in the prior year's Q4.
- SG&A expenses decreased to 20.4% of sales, down from 23.9%, indicating better cost management.
- GameStop's cash and cash equivalents reached $1.391 billion, providing financial stability.
- The collectibles category saw increased sales, showing growth potential.
- Net sales for Q4 declined to $2.226 billion from $2.254 billion year-over-year.
- Full-year sales decreased to $5.927 billion, down from $6.011 billion in the previous year.
FOURTH QUARTER OVERVIEW
-
Net sales were
$2.22 6 billion$2.25 4 billion
-
Selling, general and administrative (“SG&A”) expenses were
$453.4 million 20.4% of sales, compared to$538.9 million 23.9% of sales, in the prior year's fourth quarter.
-
Net income was
$48.2 million $147.5 million
-
Inventory was
$682.9 million $915.0 million
-
Cash, cash equivalents and marketable securities were
$1.39 1 billion
- Long-term debt remains limited to a low-interest, unsecured term loan associated with the French government’s response to COVID-19.
FULL YEAR OVERVIEW
-
Generated net sales of
$5.92 7 billion$6.01 1 billion
- Increased full-year sales in the collectibles category, which is an area in which the Company continues prioritizing long-term growth.
- Completed the majority of implementations and upgrades related to the Company’s infrastructure, systems, shipping capabilities, and online and mobile platforms.
- Initiated cost cutting initiatives and headcount reductions over the course of the year to increase operational efficiency.
- Established an equity incentive program for store leaders and tenured associates to increase their compensation and strengthen alignment of interests with fellow stockholders.
- Set a go-forward strategic direction focused on efficiency, profitability and pragmatic growth.
CONFERENCE CALL INFORMATION
The Company will host an investor conference call today,
NON-GAAP MEASURES AND OTHER METRICS
As a supplement to the Company’s financial results presented in accordance with
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS - SAFE HARBOR
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry, business strategy, goals and expectations concerning its market position, strategic and transformation initiatives, future operations, margins, profitability, sales growth, capital expenditures, liquidity, capital resources, expansion of technology expertise, and other financial and operating information, including expectations as to future operating profit improvement. Such statements include without limitation those about the Company’s expectations for fiscal 2023, future financial and operating results, projections and other statements that are not historical facts. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions, outcomes and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual developments, business decisions, outcomes and results to differ materially from those reflected or described in the forward-looking statements: economic, social, and political conditions in the markets in which we operate; the competitive nature of the Company’s industry; the cyclicality of the video game industry; the Company’s dependence on the timely delivery of new and innovative products from its vendors; the impact of technological advances in the video game industry and related changes in consumer behavior on the Company’s sales; interruptions to the Company’s supply chain or the supply chain of our suppliers; the Company’s dependence on sales during the holiday selling season; the Company’s ability to obtain favorable terms from its current and future suppliers and service providers; the Company’s ability to anticipate, identify and react to trends in pop culture with regard to its sales of collectibles; the Company’s ability to maintain strong retail and ecommerce experiences for its customers; the Company’s ability to keep pace with changing industry technology and consumer preferences; the Company’s ability to manage its profitability and cost reduction initiatives; turnover in senior management or the Company’s ability to attract and retain qualified personnel; potential damage to the Company’s reputation or customers' perception of the Company; risks associated with new digital asset products and services; the Company’s ability to maintain the security or privacy of its customer, associate or Company information; occurrence of weather events, natural disasters, public health crises and other unexpected events; potential failure or inadequacy of the Company's computerized systems; the ability of the Company’s third party delivery services to deliver products to the Company’s retail locations, fulfillment centers and consumers and changes in the terms the Company has with such service providers; the ability and willingness of the Company’s vendors to provide marketing and merchandising support at historical or anticipated levels; restrictions on the Company’s ability to purchase and sell pre-owned products; the Company’s ability to renew or enter into new leases on favorable terms; the potential monetary losses, user disputes, reputational harm and regulatory scrutiny from any hacking, social engineering or other cyber attacks in connection with digital assets; the potential failure or inadequacy of the Company’s or its third party partners’ systems or blockchain networks related to the Company’s digital asset products and services; the unique risks and challenges related to content moderation and control from peer-to-peer NFT marketplaces; unfavorable changes in the Company’s global tax rate; legislative actions; the Company’s ability to comply with federal, state, local and international laws and regulations and statutes; the evolution of government regulation related to the Company’s business initiatives; potential future litigation and other legal proceedings; potential legal, regulatory and other actions arising from the Company’s digital asset products and services; potential investigations or litigation arising from the Company’s digital asset investments, products or services; potential exposure to litigation arising from violations of law by third parties using the Company’s digital asset products or services; potential unfavorable development regarding treatment of digital assets under
|
||||||||
Consolidated Statements of Operations |
||||||||
(in millions, except per share data) |
||||||||
(unaudited) |
||||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
||||
Net sales |
|
$ |
2,226.4 |
|
|
$ |
2,253.9 |
|
Cost of sales |
|
|
1,726.6 |
|
|
|
1,875.7 |
|
Gross profit |
|
|
499.8 |
|
|
|
378.2 |
|
Selling, general and administrative expenses |
|
|
453.4 |
|
|
|
538.9 |
|
Asset impairments |
|
|
0.2 |
|
|
|
6.1 |
|
Operating earnings (loss) |
|
|
46.2 |
|
|
|
(166.8 |
) |
Interest (income) expense and other, net |
|
|
(6.2 |
) |
|
|
0.9 |
|
Earnings (loss) before income taxes |
|
|
52.4 |
|
|
|
(167.7 |
) |
Income tax expense (benefit) |
|
|
4.2 |
|
|
|
(20.2 |
) |
Net income (loss) |
|
$ |
48.2 |
|
|
$ |
(147.5 |
) |
|
|
|
|
|
||||
Earnings (loss) per share: |
|
|
|
|
||||
Basic earnings (loss) per share |
|
$ |
0.16 |
|
|
$ |
(0.49 |
) |
Diluted earnings (loss) per share |
|
|
0.16 |
|
|
|
(0.49 |
) |
|
|
|
|
|
||||
Weighted average common shares outstanding: |
|
|
|
|
||||
Basic |
|
|
304.3 |
|
|
|
303.6 |
|
Diluted |
|
|
304.5 |
|
|
|
303.6 |
|
|
|
|
|
|
||||
Percentage of |
|
|
|
|
||||
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales |
|
|
77.6 |
% |
|
|
83.2 |
% |
Gross profit |
|
|
22.5 |
% |
|
|
16.8 |
% |
Selling, general and administrative expenses |
|
|
20.4 |
% |
|
|
23.9 |
% |
Asset impairments |
|
|
— |
% |
|
|
0.3 |
% |
Operating earnings (loss) |
|
|
2.1 |
% |
|
|
(7.4 |
)% |
Interest (income) expense and other, net |
|
|
(0.3 |
)% |
|
|
— |
% |
Earnings (loss) before income taxes |
|
|
2.4 |
% |
|
|
(7.4 |
)% |
Income tax expense (benefit) |
|
|
0.2 |
% |
|
|
(0.9 |
)% |
Net income (loss) |
|
|
2.2 |
% |
|
|
(6.5 |
)% |
|
||||||||
Consolidated Statements of Operations |
||||||||
(in millions, except per share data) |
||||||||
(unaudited) |
||||||||
|
|
52 weeks ended
|
|
52 weeks ended
|
||||
Net sales |
|
$ |
5,927.2 |
|
|
$ |
6,010.7 |
|
Cost of sales |
|
|
4,555.1 |
|
|
|
4,662.9 |
|
Gross profit |
|
|
1,372.1 |
|
|
|
1,347.8 |
|
Selling, general and administrative expenses |
|
|
1,681.0 |
|
|
|
1,709.6 |
|
Asset impairments |
|
|
2.7 |
|
|
|
6.7 |
|
Operating loss |
|
|
(311.6 |
) |
|
|
(368.5 |
) |
Interest (income) expense and other, net |
|
|
(9.5 |
) |
|
|
26.9 |
|
Loss before income taxes |
|
|
(302.1 |
) |
|
|
(395.4 |
) |
Income tax expense (benefit) |
|
|
11.0 |
|
|
|
(14.1 |
) |
Net loss |
|
$ |
(313.1 |
) |
|
$ |
(381.3 |
) |
|
|
|
|
|
||||
Loss per share: |
|
|
|
|
||||
Basic loss per share |
|
$ |
(1.03 |
) |
|
$ |
(1.31 |
) |
Diluted loss per share |
|
|
(1.03 |
) |
|
|
(1.31 |
) |
|
|
|
|
|
||||
Weighted average common shares outstanding: |
|
|
|
|
||||
Basic |
|
|
304.2 |
|
|
|
290.4 |
|
Diluted |
|
|
304.2 |
|
|
|
290.4 |
|
|
|
|
|
|
||||
Percentage of |
|
|
|
|
||||
Net sales |
|
|
100.0 |
% |
|
|
100.0 |
% |
Cost of sales |
|
|
76.9 |
% |
|
|
77.6 |
% |
Gross profit |
|
|
23.1 |
% |
|
|
22.4 |
% |
Selling, general and administrative expenses |
|
|
28.4 |
% |
|
|
28.4 |
% |
Asset impairments |
|
|
— |
% |
|
|
0.1 |
% |
Operating loss |
|
|
(5.3 |
)% |
|
|
(6.1 |
)% |
Interest (income) expense and other, net |
|
|
(0.2 |
)% |
|
|
0.5 |
% |
Loss before income taxes |
|
|
(5.1 |
)% |
|
|
(6.6 |
)% |
Income tax expense (benefit) |
|
|
0.2 |
% |
|
|
(0.2 |
)% |
Net loss |
|
|
(5.3 |
)% |
|
|
(6.3 |
)% |
|
||||||
Consolidated Balance Sheets |
||||||
(in millions) |
||||||
(unaudited) |
||||||
|
|
|
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,139.0 |
|
$ |
1,271.4 |
Marketable securities |
|
|
251.6 |
|
|
— |
Receivables, net of allowance of |
|
|
153.9 |
|
|
141.1 |
Merchandise inventories |
|
|
682.9 |
|
|
915.0 |
Prepaid expenses and other current assets |
|
|
96.3 |
|
|
271.3 |
Total current assets |
|
|
2,323.7 |
|
|
2,598.8 |
Property and equipment, net of accumulated depreciation of |
|
|
136.5 |
|
|
163.6 |
Operating lease right-of-use assets |
|
|
560.8 |
|
|
586.6 |
Deferred income taxes |
|
|
18.3 |
|
|
16.3 |
Other noncurrent assets |
|
|
74.1 |
|
|
134.0 |
Total assets |
|
$ |
3,113.4 |
|
$ |
3,499.3 |
|
||||||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
531.3 |
|
$ |
471.0 |
Accrued liabilities and other current liabilities |
|
|
602.3 |
|
|
668.9 |
Current portion of operating lease liabilities |
|
|
194.7 |
|
|
210.7 |
Current portion of long-term debt |
|
|
10.8 |
|
|
4.1 |
Total current liabilities |
|
|
1,339.1 |
|
|
1,354.7 |
Long-term debt |
|
|
28.7 |
|
|
40.5 |
Operating lease liabilities |
|
|
382.4 |
|
|
393.7 |
Other long-term liabilities |
|
|
40.9 |
|
|
107.9 |
Total liabilities |
|
|
1,791.1 |
|
|
1,896.8 |
Stockholders’ equity |
|
|
1,322.3 |
|
|
1,602.5 |
Total liabilities and stockholders’ equity |
|
$ |
3,113.4 |
|
$ |
3,499.3 |
|
||||||||
Consolidated Statements of Cash Flows |
||||||||
(in millions) |
||||||||
(unaudited) |
||||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net income (loss) |
|
$ |
48.2 |
|
|
$ |
(147.5 |
) |
Adjustments to reconcile net income (loss) to net cash flows from operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
14.2 |
|
|
|
24.0 |
|
Gain on sale of digital assets |
|
|
(0.1 |
) |
|
|
— |
|
Digital asset impairments |
|
|
0.1 |
|
|
|
— |
|
Asset impairments |
|
|
0.2 |
|
|
|
6.1 |
|
Stock-based compensation expense |
|
|
7.9 |
|
|
|
9.8 |
|
Deferred income taxes |
|
|
(2.6 |
) |
|
|
(16.3 |
) |
(Gain) loss on disposal of property and equipment, net |
|
|
(2.6 |
) |
|
|
3.5 |
|
Other |
|
|
(5.7 |
) |
|
|
(2.1 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||||
Receivables, net |
|
|
(30.1 |
) |
|
|
(59.4 |
) |
Merchandise inventories |
|
|
474.6 |
|
|
|
215.6 |
|
Prepaid expenses and other assets |
|
|
13.5 |
|
|
|
(1.4 |
) |
Prepaid income taxes and income taxes payable |
|
|
171.5 |
|
|
|
(8.8 |
) |
Accounts payable and accrued liabilities |
|
|
(354.9 |
) |
|
|
(152.5 |
) |
Operating lease right-of-use assets and lease liabilities |
|
|
2.8 |
|
|
|
17.2 |
|
Changes in other long-term liabilities |
|
|
1.2 |
|
|
|
1.5 |
|
Net cash flows provided by (used in) operating activities |
|
|
338.2 |
|
|
|
(110.3 |
) |
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(11.6 |
) |
|
|
(21.3 |
) |
Purchases of marketable securities |
|
|
(39.8 |
) |
|
|
— |
|
Proceeds from maturities of marketable securities |
|
|
27.5 |
|
|
|
— |
|
Proceeds from sale of digital assets |
|
|
4.5 |
|
|
|
— |
|
Other |
|
|
0.3 |
|
|
|
(2.3 |
) |
Net cash flows used in investing activities |
|
|
(19.1 |
) |
|
|
(23.6 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Payments of financing costs |
|
|
— |
|
|
|
(3.0 |
) |
Repayments of French term loans |
|
|
(3.9 |
) |
|
|
— |
|
Settlement of stock-based awards |
|
|
(0.7 |
) |
|
|
(0.2 |
) |
Net cash flows used in financing activities |
|
|
(4.6 |
) |
|
|
(3.2 |
) |
Exchange rate effect on cash, cash equivalents and restricted cash |
|
|
22.0 |
|
|
|
(11.1 |
) |
Increase (decrease) in cash, cash equivalents and restricted cash |
|
|
336.5 |
|
|
|
(148.2 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
859.5 |
|
|
|
1,468.1 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,196.0 |
|
|
$ |
1,319.9 |
|
|
||||||||
Consolidated Statements of Cash Flows |
||||||||
(in millions) |
||||||||
(unaudited) |
||||||||
|
|
52 weeks ended
|
|
52 weeks ended
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(313.1 |
) |
|
$ |
(381.3 |
) |
Adjustments to reconcile net loss to net cash flows from operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
61.7 |
|
|
|
77.2 |
|
Loss on retirement of debt |
|
|
— |
|
|
|
18.2 |
|
Asset impairments |
|
|
2.7 |
|
|
|
6.7 |
|
Stock-based compensation expense |
|
|
40.1 |
|
|
|
30.5 |
|
Gain on sale of digital assets |
|
|
(7.2 |
) |
|
|
— |
|
Digital asset impairments |
|
|
34.0 |
|
|
|
— |
|
Deferred income taxes |
|
|
(2.6 |
) |
|
|
(16.3 |
) |
Loss on disposal of property and equipment, net |
|
|
2.5 |
|
|
|
5.4 |
|
Other |
|
|
1.2 |
|
|
|
(3.5 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||||
Receivables, net |
|
|
(16.8 |
) |
|
|
(38.4 |
) |
Merchandise inventories |
|
|
229.6 |
|
|
|
(329.6 |
) |
Prepaid expenses and other assets |
|
|
(25.2 |
) |
|
|
(6.5 |
) |
Prepaid income taxes and income taxes payable |
|
|
172.4 |
|
|
|
(21.7 |
) |
Accounts payable and accrued liabilities |
|
|
(66.2 |
) |
|
|
224.4 |
|
Operating lease right-of-use assets and lease liabilities |
|
|
(4.9 |
) |
|
|
(0.9 |
) |
Changes in other long-term liabilities |
|
|
— |
|
|
|
1.5 |
|
Net cash flows provided by (used in) operating activities |
|
|
108.2 |
|
|
|
(434.3 |
) |
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(55.9 |
) |
|
|
(62.0 |
) |
Purchases of marketable securities |
|
|
(276.8 |
) |
|
|
— |
|
Proceeds from maturities of marketable securities |
|
|
27.5 |
|
|
|
— |
|
Proceeds from sale of digital assets |
|
|
81.9 |
|
|
|
— |
|
Other |
|
|
0.6 |
|
|
|
(2.8 |
) |
Net cash flows used in investing activities |
|
|
(222.7 |
) |
|
|
(64.8 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from issuance of common stock, net of costs |
|
|
— |
|
|
|
1,672.8 |
|
Net repayments of senior notes |
|
|
— |
|
|
|
(307.4 |
) |
Repayments of revolver borrowings |
|
|
— |
|
|
|
(25.0 |
) |
Repayments of French term loans |
|
|
(3.9 |
) |
|
|
— |
|
Settlement of stock-based awards |
|
|
(4.0 |
) |
|
|
(136.8 |
) |
Payments of financing costs |
|
|
— |
|
|
|
(3.0 |
) |
Net cash flows (used in) provided by financing activities |
|
|
(7.9 |
) |
|
|
1,200.6 |
|
Exchange rate effect on cash, cash equivalents and restricted cash |
|
|
(1.5 |
) |
|
|
(16.6 |
) |
(Decrease) increase in cash, cash equivalents and restricted cash |
|
|
(123.9 |
) |
|
|
684.9 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
1,319.9 |
|
|
|
635.0 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,196.0 |
|
|
$ |
1,319.9 |
|
|
||||||||||||
Schedule I |
||||||||||||
Sales Mix |
||||||||||||
(in millions) |
||||||||||||
(unaudited) |
||||||||||||
|
|
13 Weeks Ended |
|
13 Weeks Ended |
||||||||
|
|
Net
|
|
Percent
|
|
Net
|
|
Percent
|
||||
|
|
|
|
|
|
|
|
|
||||
Hardware and accessories(1) |
|
$ |
1,242.8 |
|
55.8 |
% |
|
$ |
1,188.7 |
|
52.7 |
% |
Software(2) |
|
|
670.4 |
|
30.1 |
% |
|
|
785.9 |
|
34.9 |
% |
Collectibles |
|
|
313.2 |
|
14.1 |
% |
|
|
279.3 |
|
12.4 |
% |
Total |
|
$ |
2,226.4 |
|
100.0 |
% |
|
$ |
2,253.9 |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
||||
|
|
52 weeks ended |
|
52 weeks ended |
||||||||
|
|
Net
|
|
Percent
|
|
Net
|
|
Percent
|
||||
|
|
|
|
|
|
|
|
|
||||
Hardware and accessories(1) |
|
$ |
3,140.0 |
|
53.0 |
% |
|
$ |
3,171.7 |
|
52.8 |
% |
Software(2) |
|
|
1,822.6 |
|
30.7 |
% |
|
|
2,014.8 |
|
33.5 |
% |
Collectibles |
|
|
964.6 |
|
16.3 |
% |
|
|
824.2 |
|
13.7 |
% |
Total |
|
$ |
5,927.2 |
|
100.0 |
% |
|
$ |
6,010.7 |
|
100.0 |
% |
| (1) | Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are packaged 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. |
Schedule II
(in millions)
(unaudited)
Non-GAAP results
The following tables reconcile the Company's SG&A, operating earnings, net income (loss) and earnings (loss) per share as presented in its consolidated statements of operations and prepared in accordance with
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Adjusted SG&A |
|
|
|
|
|
|
|
|
|||||||
SG&A |
|
$ |
453.4 |
|
|
$ |
538.9 |
|
$ |
1,681.0 |
|
|
$ |
1,709.6 |
|
Transformation costs(1)(3) |
|
|
(0.5 |
) |
|
|
— |
|
|
(0.9 |
) |
|
|
(24.7 |
) |
Significant transactions (2) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(0.4 |
) |
Divestitures and other (3) |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(0.1 |
) |
Adjusted SG&A |
|
$ |
452.9 |
|
|
$ |
538.9 |
|
$ |
1,680.1 |
|
|
$ |
1,684.4 |
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|||||||
Adjusted Operating Income (Loss) |
|
|
|
|
|
|
|
|
|||||||
Operating earnings (loss) |
|
$ |
46.2 |
|
$ |
(166.8 |
) |
|
$ |
(311.6 |
) |
|
$ |
(368.5 |
) |
Transformation costs(1)(3) |
|
|
0.5 |
|
|
— |
|
|
|
0.9 |
|
|
|
24.7 |
|
Asset impairments |
|
|
0.2 |
|
|
6.1 |
|
|
|
2.7 |
|
|
|
6.7 |
|
Significant transactions (2) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
Divestitures and other (3) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Adjusted operating income (loss) |
|
$ |
46.9 |
|
$ |
(160.7 |
) |
|
$ |
(308.0 |
) |
|
$ |
(336.6 |
) |
|
|
|
|
|
|
|
|
|
|||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
|||||||
Adjusted Net Income (Loss) |
|
|
|
|
|
|
|
|
|||||||
Net income (loss) |
|
$ |
48.2 |
|
$ |
(147.5 |
) |
|
$ |
(313.1 |
) |
|
$ |
(381.3 |
) |
Transformation costs(1)(3) |
|
|
0.5 |
|
|
— |
|
|
|
0.9 |
|
|
|
24.7 |
|
Asset impairments |
|
|
0.2 |
|
|
6.1 |
|
|
|
2.7 |
|
|
|
6.7 |
|
Significant transactions (2) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
18.6 |
|
Divestitures and other (3) |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Adjusted net income (loss) |
|
$ |
48.9 |
|
$ |
(141.4 |
) |
|
$ |
(309.5 |
) |
|
$ |
(331.2 |
) |
|
|
|
|
|
|
|
|
|
|||||||
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||
Adjusted Earnings (Loss) Per Share |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
$ |
0.16 |
|
$ |
(0.47 |
) |
|
$ |
(1.02 |
) |
|
$ |
(1.14 |
) |
Diluted |
|
$ |
0.16 |
|
$ |
(0.47 |
) |
|
$ |
(1.02 |
) |
|
$ |
(1.14 |
) |
|
|
|
|
|
|
|
|
|
|||||||
Number of shares used in adjusted calculation |
|
|
|
|
|
|
|
|
|||||||
Basic |
|
|
304.3 |
|
|
303.6 |
|
|
|
304.2 |
|
|
|
290.4 |
|
Diluted |
|
|
304.5 |
|
|
303.6 |
|
|
|
304.2 |
|
|
|
290.4 |
|
(1) Current year includes the impact of cash severance costs partially offset by stock-based compensation forfeitures related to workforce optimization efforts in connection with our transformation initiatives. Prior year includes cash severance and stock-based compensation costs for key personnel that separated from the Company and expenses for consultants and advisors related to the transformation initiatives. |
|||||||||||||||
|
|||||||||||||||
(2) Prior year includes transaction costs associated with our at-the-market ("ATM") offering. Adjusted net loss in the prior year also includes the impact of the make-whole premium and accelerated amortization associated with the voluntary redemption of the 2023 Senior Notes recognized in interest (income) expense and other, net in our Consolidated Statements of Operations. |
|||||||||||||||
|
|||||||||||||||
(3) Prior year amount related to cash severance costs and stock-based compensation have been reclassified to conform to the current year presentation. |
|||||||||||||||
|
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
||||||||
Reconciliation of Adjusted EBITDA to Net Income (Loss) |
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
48.2 |
|
|
$ |
(147.5 |
) |
|
$ |
(313.1 |
) |
|
$ |
(381.3 |
) |
Interest (income) expense and other, net |
|
|
(6.2 |
) |
|
|
0.9 |
|
|
|
(9.5 |
) |
|
|
26.9 |
|
Depreciation and amortization |
|
|
14.2 |
|
|
|
24.0 |
|
|
|
61.7 |
|
|
|
77.2 |
|
Income tax expense (benefit) |
|
|
4.2 |
|
|
|
(20.2 |
) |
|
|
11.0 |
|
|
|
(14.1 |
) |
EBITDA |
|
$ |
60.4 |
|
|
$ |
(142.8 |
) |
|
$ |
(249.9 |
) |
|
$ |
(291.3 |
) |
Stock-based compensation expense |
|
|
21.4 |
|
|
|
9.8 |
|
|
|
53.6 |
|
|
|
22.5 |
|
Transformation costs(1)(3) |
|
|
0.5 |
|
|
|
— |
|
|
|
0.9 |
|
|
|
24.7 |
|
Asset impairments |
|
|
0.2 |
|
|
|
6.1 |
|
|
|
2.7 |
|
|
|
6.7 |
|
Significant transactions(2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
Divestitures and other(3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.1 |
|
Adjusted EBITDA |
|
$ |
82.5 |
|
|
$ |
(126.9 |
) |
|
$ |
(192.7 |
) |
|
$ |
(236.9 |
) |
|
|
|
|
|
|
|
|
|
||||||||
(1) Current year includes the impact of cash severance costs partially offset by stock-based compensation forfeitures related to workforce optimization efforts in connection with our transformation initiatives. Prior year includes cash severance and stock-based compensation costs for key personnel that separated from the Company and expenses for consultants and advisors related to the transformation initiatives. |
||||||||||||||||
|
||||||||||||||||
(2) Prior year includes transaction costs associated with the ATM offering. |
||||||||||||||||
|
||||||||||||||||
(3) Prior year amounts related to cash severance costs and stock-based compensation have been reclassified to conform to the current year presentation. |
||||||||||||||||
Schedule III
(in millions)
(unaudited)
Non-GAAP results
The following table reconciles the Company's cash flows provided by operating activities as presented in its unaudited Consolidated Statements of Cash Flows and prepared in accordance with GAAP to its free cash flow.
|
13 Weeks Ended
|
|
13 Weeks Ended
|
|
52 Weeks Ended
|
|
52 Weeks Ended
|
||||||||
Net cash flows provided by (used in) operating activities |
$ |
338.2 |
|
|
$ |
(110.3 |
) |
|
$ |
108.2 |
|
|
$ |
(434.3 |
) |
Capital expenditures |
|
(11.6 |
) |
|
|
(21.3 |
) |
|
|
(55.9 |
) |
|
|
(62.0 |
) |
Free cash flow |
$ |
326.6 |
|
|
$ |
(131.6 |
) |
|
$ |
52.3 |
|
|
$ |
(496.3 |
) |
Non-GAAP Measures and Other Metrics
Adjusted EBITDA, adjusted SG&A expense, adjusted operating income, adjusted net income and adjusted earnings (loss) per share are supplemental financial measures of the Company’s performance that are not required by, or presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures provides useful information to investors in assessing our financial condition and results of operations.
We define Adjusted EBITDA as net income (loss) before income taxes, net interest (income) expense, depreciation and amortization, stock-based compensation expense, transformation costs, business divestitures, asset impairments, severance and other non-cash charges. Net income (loss) is the GAAP financial measure most directly comparable to Adjusted EBITDA. Our non-GAAP financial measures should not be considered as an alternative to the most directly comparable GAAP financial measure. Furthermore, non-GAAP financial measures have limitations as an analytical tool because they exclude some but not all items that affect the most directly comparable GAAP financial measures. Some of these limitations include:
- Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure;
- Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash requirements for our working capital needs;
- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
- Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
We compensate for the limitations of Adjusted EBITDA, adjusted SG&A expense, adjusted operating income, adjusted net income and adjusted earnings (loss) per share as analytical tools by reviewing the comparable GAAP financial measure, understanding the differences between the GAAP and non-GAAP financial measures and incorporating these data points into our decision-making process. Adjusted EBITDA, adjusted SG&A expense, adjusted operating income, adjusted net income and adjusted earnings (loss) per share is provided in addition to, and not as an alternative to, the Company’s financial results prepared in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because Adjusted EBITDA, adjusted SG&A expense, adjusted operating income, adjusted net income and adjusted earnings (loss) per share may be defined and determined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230321005956/en/
(817) 424-2001
ir@gamestop.com
Source:
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