GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today
released financial results for the first quarter ended May 3, 2025.
The Company’s condensed and consolidated financial statements,
including GAAP and non-GAAP results, are below. The Company’s Form
10-Q and supplemental information can be found at
https://investor.gamestop.com.
FIRST QUARTER OVERVIEW
- Net sales were $732.4 million for the period, compared to
$881.8 million in the prior year's first quarter.
- Selling, general and administrative (“SG&A”) expenses were
$228.1 million for the period, compared to $295.1 million in the
prior year's first quarter.
- Operating loss was $10.8 million for the period, compared to an
Operating loss of $50.6 million in the prior year's first quarter.
- First quarter Operating loss includes $35.5 million of
impairment charges related to international restructuring
efforts.
- Excluding the impairment charges and other items, Adjusted
Operating Income was $27.5 million for the period compared to an
Adjusted Operating Loss of $55.0 million in the prior year's first
quarter.
- Net income was $44.8 million for the period, compared to a Net
loss of $32.3 million for the prior year’s first quarter.
- Excluding the impairment charges and other items, Adjusted Net
Income was $83.1 million for the period compared to an Adjusted Net
Loss of $36.7 million for the prior year's first quarter.
- Cash, cash equivalents and marketable securities were $6.4
billion at the close of the first quarter, compared to $1.0 billion
at the close of the prior year's first quarter.
SUBSEQUENT EVENTS
- Completed the divestiture of Canada on May 4, 2025.
- Purchased 4,710 Bitcoin between May 3, 2025 and June 10, 2025
for cash.
Additional information can be found in the Company’s Form
10-Q.
NON-GAAP MEASURES AND OTHER METRICS
As a supplement to the Company’s financial results presented in
accordance with U.S. generally accepted accounting principles
(“GAAP”), GameStop may use certain non-GAAP measures, such as
adjusted SG&A expenses, adjusted operating income (loss),
adjusted net income (loss), adjusted earnings (loss) per share,
adjusted EBITDA and free cash flow. The Company believes these
non-GAAP financial measures provide useful information to investors
in evaluating the Company’s core operating performance. Adjusted
SG&A expenses, adjusted operating loss, adjusted net income
(loss), adjusted net income (loss) per share and adjusted EBITDA
exclude the effect of items such as certain transformation costs,
asset impairments, severance, as well as divestiture costs. Free
cash flow excludes capital expenditures otherwise included in net
cash flows provided by (used in) operating activities. The
Company’s definition and calculation of non-GAAP financial measures
may differ from that of other companies. Non-GAAP financial
measures should be viewed as supplementing, and not as an
alternative or substitute for, the Company’s financial results
prepared in accordance with GAAP. Certain of the items that may be
excluded or included in non-GAAP financial measures may be
significant items that could impact the Company’s financial
position, results of operations or cash flows and should therefore
be considered in assessing the Company’s actual and future
financial condition and performance.
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. In some cases, forward-looking statements can be identified
by the use of terms such as "anticipates," "believes," "continues,"
"could," estimates," "expects," "intends," "may," "plans,"
potential," predicts," "pro forma," seeks," "should," "will" or
similar expressions. 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; changes 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; the
Company’s ability, or the ability of the third parties with whom we
work, to maintain the security of our information technology
systems or data (including customer, associate or Company
information); the Company's compliance with stringent and evolving
laws and other obligations related to data privacy and security;
occurrence of weather events, natural disasters, public health
crises and other unexpected events; risks associated with inventory
shrinkage; 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; 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; changes to tariff and import/export
regulations; potential litigation and other legal proceedings; the
value of the Company’s investment holdings; concentration of the
Company’s investment portfolio into one or fewer holdings; the
recognition of losses in a particular investment even if the
Company has not sold the investment; potential variability in the
Company's earnings due to our current and potential future holdings
of equity securities or certain crypto-currencies, including our
current holdings of Bitcoin; volatility in the Company’s stock
price, including volatility due to potential short squeezes;
continued high degrees of media coverage by third parties; the
availability and future sales of substantial amounts of the
Company’s Class A common stock; fluctuations in the Company’s
results of operations from quarter to quarter; the Company’s
ability to generate sufficient cash flow to fund its operations;
the Company’s ability to incur additional debt; dilution to current
stockholders caused by the conversion of the Company's convertible
debt securities; risks associated with the Company’s investment in
marketable, nonmarketable and interest-bearing securities,
including the impact of such investments on the Company’s financial
results; and the Company’s ability to maintain effective internal
control over financial reporting. Additional factors that could
cause results to differ materially from those reflected or
described in the forward-looking statements can be found in
GameStop's most recent Annual Report on Form 10-K and other filings
made from time to time with the SEC and available at www.sec.gov or
on the Company’s investor relations website
(https://investor.gamestop.com). Forward-looking statements
contained in this press release speak only as of the date of this
press release. The Company undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by any applicable securities laws.
GameStop Corp. Condensed
Statements of Operations (in millions, except per share data)
(unaudited)
13 Weeks Ended
May 3, 2025
13 Weeks Ended
May 4, 2024
Net sales
$
732.4
$
881.8
Cost of sales
479.6
637.3
Gross profit
252.8
244.5
Selling, general and administrative
expenses
228.1
295.1
Asset Impairments
35.5
—
Operating loss
(10.8
)
(50.6
)
Interest income, net
(56.9
)
(14.9
)
Other income, net
(2.2
)
—
Income (loss) before income taxes
48.3
(35.7
)
Income tax expense (benefit)
3.5
(3.4
)
Net income (loss)
$
44.8
$
(32.3
)
Net income (loss) per share:
Basic Income (loss) per share
$
0.10
$
(0.11
)
Diluted income (loss) per share
$
0.09
$
(0.11
)
Weighted-average common shares
outstanding:
Basic
447.1
305.9
Diluted
497.9
305.9
Percentage of Net
Sales:
Net sales
100.0
%
100.0
%
Cost of sales
65.5
72.3
Gross profit
34.5
27.7
Selling, general and administrative
expenses
31.1
33.5
Asset Impairments
4.8
—
Operating loss
(1.5
)
(5.7
)
Interest income, net
(7.8
)
(1.7
)
Other income, net
(0.3
)
—
Income (loss) before income taxes
6.6
(4.0
)
Income tax expense (benefit)
0.5
(0.4
)
Net income (loss)
6.1
%
(3.7
)%
GameStop Corp. Condensed
Statements of Operations by Segment (in millions, except per
share data) (unaudited)
United
States
Canada
Australia
Europe
Total
As of and for the Quarter ended May 3,
2025
Net sales
$
537.5
$
38.2
$
81.9
$
74.8
$
732.4
Cost of sales
343.6
28.2
55.0
52.8
$
479.6
Gross Profit
193.9
10.0
26.9
22.0
$
252.8
Selling, general and administrative
expenses:
160.3
13.9
32.3
21.6
$
228.1
Store related
131.6
11.3
26.6
22.4
$
191.9
Other
28.7
2.6
5.7
(0.8
)
$
36.2
Asset impairments
—
18.3
—
17.2
35.5
Operating income (loss)
33.6
(22.2
)
(5.4
)
(16.8
)
(10.8
)
Interest income
(56.9
)
Other income, net
(2.2
)
Income before income taxes
48.3
Income tax expense
3.5
Net income
44.8
Property and equipment, net(1)
37.5
—
16.7
—
54.2
Capital expenditures
1.2
0.1
1.0
0.6
2.9
United
States
Canada
Australia
Europe
Total
As of and for the Quarter ended May 4,
2024
Net sales
$
617.3
$
42.6
$
79.6
$
142.3
$
881.8
Cost of sales
448.5
31.6
53.4
103.8
637.3
Gross Profit
168.8
11.0
26.2
38.5
244.5
Selling, general and administrative
expenses:
194.1
15.5
34.3
51.2
295.1
Store related
168.2
11.9
28.2
44.4
252.7
Other
25.9
3.6
6.1
6.8
42.4
Operating loss
(25.3
)
(4.5
)
(8.1
)
(12.7
)
(50.6
)
Interest income
(14.9
)
Loss before income taxes
(35.7
)
Income tax benefit
(3.4
)
Net loss
(32.3
)
Property and equipment, net
44.9
2.0
19.6
15.9
82.4
Capital expenditures
2.5
0.7
1.2
0.5
4.9
(1)
Property and equipment, net for Canada and
France (Europe) is classified in Assets held for sale on our
Condensed Consolidated Balance Sheets.
GameStop Corp. Condensed
Consolidated Balance Sheets (in millions) (unaudited)
May 3, 2025
May 4, 2024
ASSETS:
Current assets:
Cash and cash equivalents
$
6,385.8
$
999.9
Marketable securities
—
83.0
Receivables, net of allowance of $0.9 and
$4.4, respectively
44.1
58.9
Merchandise inventories, net
421.3
675.8
Prepaid expenses and other current
assets
29.3
62.1
Assets held for sale
226.2
9.4
Total current assets
7,106.7
1,889.1
Property and equipment, net of accumulated
depreciation of $572.5 and $843.6, respectively
54.2
82.4
Operating lease right-of-use assets
272.5
542.0
Deferred income taxes
18.7
17.5
Other noncurrent assets
50.5
56.1
Total assets
$
7,502.6
$
2,587.1
LIABILITIES AND STOCKHOLDERS’
EQUITY:
Current liabilities:
Accounts payable
$
198.4
$
282.7
Accrued liabilities and other current
liabilities
328.4
377.1
Current portion of operating lease
liabilities
113.3
177.7
Current portion of long-term debt
—
10.8
Liabilities held for sale
207.2
—
Total current liabilities
847.3
848.3
Long-term debt, net
1,480.7
14.9
Operating lease liabilities
167.8
385.3
Other long-term liabilities
19.4
31.3
Total liabilities
2,515.2
1,279.8
Total stockholders’ equity
4,987.4
1,307.3
Total liabilities and stockholders’
equity
$
7,502.6
$
2,587.1
GameStop Corp. Condensed
Consolidated Statements of Cash Flows (in millions)
(unaudited)
13 Weeks Ended
May 3, 2025
13 Weeks Ended
May 4, 2024
Cash flows from operating activities:
Net income (loss)
$
44.8
$
(32.3
)
Adjustments to reconcile net income (loss)
to net cash flows from operating activities:
Depreciation and amortization
5.6
16.8
Stock-based compensation expense, net
5.5
0.6
(Gain) loss on disposal of property and
equipment, net
(1.5
)
0.3
Asset impairments
35.5
—
Other, net
(0.4
)
(0.6
)
Changes in operating assets and
liabilities:
Receivables, net
12.0
33.4
Merchandise inventories, net
(10.1
)
(43.2
)
Prepaid expenses and other current
assets
6.7
8.5
Prepaid income taxes and income taxes
payable
(1.6
)
(5.1
)
Accounts payable and accrued
liabilities
110.3
(87.8
)
Operating lease right-of-use assets and
liabilities
(0.6
)
1.1
Changes in other long-term liabilities
(13.7
)
(1.5
)
Net cash flows provided by (used in)
operating activities
192.5
(109.8
)
Cash flows from investing activities:
Purchases of marketable securities
(14.7
)
(7.5
)
Proceeds from maturities and sales of
marketable securities
22.6
201.9
Capital expenditures
(2.9
)
(4.9
)
Proceeds from other divestitures
2.2
—
Other
0.1
0.3
Net cash flows provided by investing
activities
7.3
189.8
Cash flows from financing activities:
Proceeds from the issuance of convertible
debt
1,500.0
—
Debt issuance costs from convertible
debt
(19.3
)
—
Repayments of debt
(2.7
)
(2.7
)
Proceeds from equity awards directly
withheld from employees for tax purposes
2.3
2.2
Payments to tax authorities for equity
awards directly withheld from employees
(2.3
)
(2.2
)
Net cash flows provided by (used in)
financing activities
1,478.0
(2.7
)
Exchange rate effect on cash, cash
equivalents and restricted cash
5.9
1.3
Less: Net change in cash balance
classified as assets held for sale
(49.4
)
—
Increase in cash, cash equivalents, and
restricted cash
1,634.3
78.6
Cash, cash equivalents and restricted cash
at beginning of period
4,789.8
938.9
Cash, cash equivalents and restricted cash
at end of period
$
6,424.1
$
1,017.5
Schedule I Sales Mix (in
millions) (unaudited)
13 Weeks Ended May 3,
2025
13 Weeks Ended May 4,
2024
Net
Percent
Net
Percent
Net Sales:
Sales
of Total
Sales
of Total
Hardware and accessories (1)
$
345.3
47.1
%
$
505.3
57.3
%
Software (2)
175.6
24.0
%
239.7
27.2
%
Collectibles (3)
211.5
28.9
%
136.8
15.5
%
Total
$
732.4
100.0
%
$
881.8
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.
(3) Includes the sale of apparel, toys,
trading cards, gadgets and other products for pop culture and
technology enthusiasts.
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 income (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
May 3, 2025
May 4, 2024
Adjusted SG&A
expense
SG&A expense
$
228.1
295.1
Transformation costs(1)
(2.8
)
4.4
Adjusted SG&A expense
$
225.3
$
299.5
Adjusted
Operating Income (Loss)
Operating (loss) income
$
(10.8
)
$
(50.6
)
Transformation costs(1)
2.8
(4.4
)
Asset impairments (2)
35.5
—
Adjusted operating income (loss)
$
27.5
$
(55.0
)
Adjusted Net
Income (Loss)
Net Income (loss)
$
44.8
$
(32.3
)
Transformation costs(1)
2.8
(4.4
)
Asset impairments(2)
35.5
—
Adjusted net income (loss)
$
83.1
$
(36.7
)
Adjusted net income (loss) per share
Basic
$
0.19
$
(0.12
)
Diluted
0.17
(0.12
)
Number of shares used in adjusted
calculation
Basic
447.1
305.9
Diluted
497.9
305.9
(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 the
commitment made by management during the first quarter of fiscal
2025 to divest the Company's operations in Canada and France.
13 Weeks Ended
13 Weeks Ended
May 3, 2025
May 4, 2024
Reconciliation of
Net Income (loss) to Adjusted EBITDA
Net income (loss)
$
44.8
$
(32.3
)
Interest income, net
(56.9
)
(14.9
)
Depreciation and amortization
5.6
16.8
Income tax expense (benefit)
3.5
(3.4
)
EBITDA
$
(3.0
)
$
(33.8
)
Stock-based compensation
5.5
0.6
Transformation costs(1)
2.8
(4.4
)
Divestitures and other
(2.2
)
—
Asset impairments(2)
35.5
—
Adjusted EBITDA
$
38.6
$
(37.6
)
(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 the
commitment made by management during the first quarter of fiscal
2025 to divest the Company's operations in Canada and France.
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
May 3, 2025
May 4, 2024
Net cash flows provided by (used in)
operating activities
$
192.5
$
(109.8
)
Capital expenditures
(2.9
)
(4.9
)
Free cash flow
$
189.6
$
(114.7
)
Non-GAAP Measures and Other
Metrics
Adjusted EBITDA, adjusted SG&A expense, adjusted operating
income (loss), adjusted net income (loss) and adjusted net income
(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 provide useful information to investors
in assessing our financial condition and results of operations. We
define adjusted EBITDA as net income (loss) before income taxes,
plus interest income, net and depreciation and amortization,
excluding stock-based compensation, certain 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 (loss), adjusted net
income (loss) and adjusted net income (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 (loss), adjusted net
income (loss) and adjusted net income (loss) per share are 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 (loss), adjusted net
income (loss) and adjusted net income (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/20250610606573/en/
GameStop Investor Relations 817-424-2001 ir@gamestop.com
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