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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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FOR THE QUARTERLY PERIOD ENDED MAY 4, 2019
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-2733559
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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625 Westport Parkway,
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76051
(Zip Code)
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Grapevine, Texas
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(Address of principal executive offices)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Class A Common Stock
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GME
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NYSE
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Large accelerated filer
x
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Accelerated filer
☐
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Non-accelerated filer
☐
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Smaller reporting company
☐
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Emerging growth company
☐
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
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Page No.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 6.
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ITEM 1.
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FINANCIAL STATEMENTS
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May 4,
2019 |
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May 5,
2018 |
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February 2,
2019 |
||||||
ASSETS
|
||||||||||||
Current assets:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
543.2
|
|
|
$
|
242.1
|
|
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$
|
1,624.4
|
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Receivables, net
|
|
126.0
|
|
|
104.5
|
|
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134.2
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Merchandise inventories, net
|
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1,149.1
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|
1,184.5
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1,250.5
|
|
|||
Prepaid expenses and other current assets
|
|
101.8
|
|
|
133.1
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|
|
118.6
|
|
|||
Assets held for sale
|
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—
|
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|
663.1
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—
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|
|||
Total current assets
|
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1,920.1
|
|
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2,327.3
|
|
|
3,127.7
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|
|||
Property and equipment, net
|
|
313.3
|
|
|
333.5
|
|
|
321.3
|
|
|||
Operating lease right-of-use assets
|
|
807.0
|
|
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—
|
|
|
—
|
|
|||
Deferred income taxes
|
|
147.3
|
|
|
153.6
|
|
|
147.3
|
|
|||
Goodwill
|
|
363.9
|
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|
1,342.3
|
|
|
363.9
|
|
|||
Other noncurrent assets
|
|
81.7
|
|
|
151.7
|
|
|
84.1
|
|
|||
Total assets
|
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$
|
3,633.3
|
|
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$
|
4,308.4
|
|
|
$
|
4,044.3
|
|
|
|
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|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||
Current liabilities:
|
|
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|
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|
||||||
Accounts payable
|
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$
|
458.4
|
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|
$
|
547.8
|
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$
|
1,051.9
|
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Accrued and other current liabilities
|
|
588.9
|
|
|
646.2
|
|
|
780.0
|
|
|||
Current portion of operating lease liabilities
|
|
250.0
|
|
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—
|
|
|
—
|
|
|||
Current portion of debt, net
|
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—
|
|
|
—
|
|
|
349.2
|
|
|||
Liabilities held for sale
|
|
—
|
|
|
35.6
|
|
|
—
|
|
|||
Total current liabilities
|
|
1,297.3
|
|
|
1,229.6
|
|
|
2,181.1
|
|
|||
Deferred income taxes
|
|
0.1
|
|
|
5.0
|
|
|
0.1
|
|
|||
Long-term debt, net
|
|
468.9
|
|
|
818.6
|
|
|
471.6
|
|
|||
Operating lease liabilities
|
|
552.6
|
|
|
—
|
|
|
—
|
|
|||
Other long-term liabilities
|
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22.7
|
|
|
71.7
|
|
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55.3
|
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|||
Total liabilities
|
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2,341.6
|
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2,124.9
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2,708.1
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|||
Commitments and contingencies (Note 7)
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||||||
Stockholders’ equity:
|
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||||||
Class A common stock — $.001 par value; 300 shares authorized; 102.3, 101.9 and 102.0 shares issued and outstanding
|
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0.1
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0.1
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0.1
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Additional paid-in capital
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29.0
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25.5
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27.7
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|
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Accumulated other comprehensive loss
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(68.2
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)
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(23.0
|
)
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(54.3
|
)
|
|||
Retained earnings
|
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1,330.8
|
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|
2,180.9
|
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1,362.7
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|
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Total stockholders’ equity
|
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1,291.7
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2,183.5
|
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1,336.2
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|
|||
Total liabilities and stockholders’ equity
|
|
$
|
3,633.3
|
|
|
$
|
4,308.4
|
|
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$
|
4,044.3
|
|
|
|
13 Weeks Ended
|
||||||
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|
May 4,
2019 |
|
May 5,
2018 |
||||
Net sales
|
|
$
|
1,547.7
|
|
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$
|
1,785.8
|
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Cost of sales
|
|
1,076.5
|
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1,254.7
|
|
||
Gross profit
|
|
471.2
|
|
|
531.1
|
|
||
Selling, general and administrative expenses
|
|
430.6
|
|
|
456.1
|
|
||
Depreciation and amortization
|
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23.1
|
|
|
28.5
|
|
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Operating earnings
|
|
17.5
|
|
|
46.5
|
|
||
Interest income
|
|
(5.3
|
)
|
|
(0.5
|
)
|
||
Interest expense
|
|
13.0
|
|
|
14.2
|
|
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Earnings from continuing operations before income tax expense
|
|
9.8
|
|
|
32.8
|
|
||
Income tax expense
|
|
2.3
|
|
|
12.4
|
|
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Net income from continuing operations
|
|
7.5
|
|
|
20.4
|
|
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(Loss) income from discontinued operations, net of tax
|
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(0.7
|
)
|
|
7.8
|
|
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Net income
|
|
$
|
6.8
|
|
|
$
|
28.2
|
|
|
|
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|
||||
Dividends per common share
|
|
$
|
0.38
|
|
|
$
|
0.38
|
|
|
|
|
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|
||||
Basic earnings (loss) per share:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
0.07
|
|
|
$
|
0.20
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
0.08
|
|
||
Basic earnings per share
|
|
$
|
0.07
|
|
|
$
|
0.28
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per share:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
0.07
|
|
|
$
|
0.20
|
|
Discontinued operations
|
|
(0.01
|
)
|
|
0.08
|
|
||
Diluted earnings per share
|
|
$
|
0.07
|
|
|
$
|
0.28
|
|
|
|
|
|
|
||||
Weighted-average shares outstanding:
|
|
|
|
|
||||
Basic
|
|
102.4
|
|
|
101.8
|
|
||
Diluted
|
|
102.5
|
|
|
102.0
|
|
|
|
13 Weeks Ended
|
||||||
|
|
May 4,
2019 |
|
May 5,
2018 |
||||
Net income
|
|
$
|
6.8
|
|
|
$
|
28.2
|
|
Other comprehensive loss:
|
|
|
|
|
||||
Foreign currency translation adjustment
|
|
(13.9
|
)
|
|
(35.2
|
)
|
||
Total comprehensive loss
|
|
$
|
(7.1
|
)
|
|
$
|
(7.0
|
)
|
|
Class A
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Total
Stockholders'
Equity
|
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at February 2, 2019
|
102.0
|
|
|
$
|
0.1
|
|
|
$
|
27.7
|
|
|
$
|
(54.3
|
)
|
|
$
|
1,362.7
|
|
|
$
|
1,336.2
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6.8
|
|
|
6.8
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(13.9
|
)
|
|
—
|
|
|
(13.9
|
)
|
|||||
Dividends declared, $0.38 per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.7
|
)
|
|
(38.7
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|||||
Settlement of stock-based awards
|
0.3
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|||||
Balance at May 4, 2019
|
102.3
|
|
|
$
|
0.1
|
|
|
$
|
29.0
|
|
|
$
|
(68.2
|
)
|
|
$
|
1,330.8
|
|
|
$
|
1,291.7
|
|
|
Class A
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Retained
Earnings
|
|
Total
Stockholders' Equity |
|||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance at February 3, 2018
|
101.3
|
|
|
$
|
0.1
|
|
|
$
|
22.1
|
|
|
$
|
12.2
|
|
|
$
|
2,180.1
|
|
|
$
|
2,214.5
|
|
Adoption of ASU 2014-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11.5
|
|
|
11.5
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28.2
|
|
|
28.2
|
|
|||||
Foreign currency translation
|
—
|
|
|
—
|
|
|
—
|
|
|
(35.2
|
)
|
|
—
|
|
|
(35.2
|
)
|
|||||
Dividends declared, $0.38 per common share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38.9
|
)
|
|
(38.9
|
)
|
|||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
7.6
|
|
|
—
|
|
|
—
|
|
|
7.6
|
|
|||||
Settlement of stock-based awards
|
0.6
|
|
|
—
|
|
|
(4.2
|
)
|
|
—
|
|
|
—
|
|
|
(4.2
|
)
|
|||||
Balance at May 5, 2018
|
101.9
|
|
|
$
|
0.1
|
|
|
$
|
25.5
|
|
|
$
|
(23.0
|
)
|
|
$
|
2,180.9
|
|
|
$
|
2,183.5
|
|
|
|
13 Weeks Ended
|
||||||
|
|
May 4,
2019 |
|
May 5,
2018 |
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
6.8
|
|
|
$
|
28.2
|
|
Adjustments to reconcile net income to net cash flows from operating activities:
|
|
|
|
|
||||
Depreciation and amortization (including amounts in cost of sales)
|
|
23.3
|
|
|
34.4
|
|
||
Provision for inventory reserves
|
|
16.3
|
|
|
16.6
|
|
||
Stock-based compensation expense
|
|
1.9
|
|
|
7.6
|
|
||
Loss on disposal of property and equipment
|
|
0.7
|
|
|
0.4
|
|
||
Other
|
|
(3.6
|
)
|
|
(1.7
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Receivables, net
|
|
6.9
|
|
|
24.3
|
|
||
Merchandise inventories
|
|
73.1
|
|
|
27.7
|
|
||
Prepaid expenses and other current assets
|
|
3.8
|
|
|
(0.8
|
)
|
||
Prepaid income taxes and income taxes payable
|
|
(1.0
|
)
|
|
12.2
|
|
||
Accounts payable and accrued liabilities
|
|
(782.2
|
)
|
|
(678.2
|
)
|
||
Operating lease right-of-use assets and lease liabilities
|
|
(11.0
|
)
|
|
—
|
|
||
Changes in other long-term liabilities
|
|
—
|
|
|
(2.6
|
)
|
||
Net cash flows used in operating activities
|
|
(665.0
|
)
|
|
(531.9
|
)
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchase of property and equipment
|
|
(18.6
|
)
|
|
(17.6
|
)
|
||
Other
|
|
(0.1
|
)
|
|
1.2
|
|
||
Net cash flows used in investing activities
|
|
(18.7
|
)
|
|
(16.4
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Repayment of acquisition-related debt
|
|
—
|
|
|
(12.2
|
)
|
||
Dividends paid
|
|
(40.3
|
)
|
|
(40.9
|
)
|
||
Repayments of debt
|
|
(353.1
|
)
|
|
—
|
|
||
Settlement of stock-based awards
|
|
(0.6
|
)
|
|
(4.2
|
)
|
||
Net cash flows used in financing activities
|
|
(394.0
|
)
|
|
(57.3
|
)
|
||
Exchange rate effect on cash and cash equivalents and restricted cash
|
|
(6.4
|
)
|
|
(12.2
|
)
|
||
Decrease in cash held for sale
|
|
—
|
|
|
5.1
|
|
||
Decrease in cash and cash equivalents and restricted cash
|
|
(1,084.1
|
)
|
|
(612.7
|
)
|
||
Cash and cash equivalents and restricted cash at beginning of period
|
|
1,640.5
|
|
|
869.1
|
|
||
Cash and cash equivalents and restricted cash at end of period
|
|
$
|
556.4
|
|
|
$
|
256.4
|
|
|
|
May 4,
2019 |
|
May 5,
2018 |
|
February 2,
2019 |
||||||
Cash and cash equivalents
|
|
$
|
543.2
|
|
|
$
|
242.1
|
|
|
$
|
1,624.4
|
|
Restricted cash (included in prepaid expenses and other current assets)
|
|
—
|
|
|
2.8
|
|
|
2.7
|
|
|||
Restricted cash (included in other noncurrent assets)
|
|
13.2
|
|
|
11.5
|
|
|
13.4
|
|
|||
Total cash and cash equivalents and restricted cash in the statements of cash flows
|
|
$
|
556.4
|
|
|
$
|
256.4
|
|
|
$
|
1,640.5
|
|
|
13 Weeks Ended
|
||||||
|
May 4, 2019
|
|
May 5, 2018
|
||||
Net sales
|
$
|
—
|
|
|
$
|
148.2
|
|
Cost of sales
|
—
|
|
|
22.0
|
|
||
Gross profit
|
—
|
|
|
126.2
|
|
||
Selling, general and administrative expenses
|
0.8
|
|
|
110.0
|
|
||
Depreciation and amortization
|
—
|
|
|
5.6
|
|
||
(Loss) income from discontinued operations before income taxes
|
(0.8
|
)
|
|
10.6
|
|
||
Income tax (benefit) expense
|
(0.1
|
)
|
|
2.8
|
|
||
Net (loss) income from discontinued operations
|
$
|
(0.7
|
)
|
|
$
|
7.8
|
|
|
May 5, 2018
|
||
Assets:
|
|
||
Cash and cash equivalents
|
$
|
5.0
|
|
Receivables, net
|
51.9
|
|
|
Merchandise inventories, net
|
121.6
|
|
|
Prepaid expenses and other current assets
|
8.8
|
|
|
Property and equipment, net
|
78.6
|
|
|
Goodwill
|
316.9
|
|
|
Other intangible assets, net
|
77.0
|
|
|
Other assets
|
3.3
|
|
|
Total assets held for sale
|
$
|
663.1
|
|
|
|
||
Liabilities:
|
|
||
Accounts payable
|
$
|
3.6
|
|
Accrued liabilities
|
17.1
|
|
|
Other liabilities
|
14.9
|
|
|
Total liabilities held for sale
|
$
|
35.6
|
|
|
13 Weeks Ended
|
||
|
May 5, 2018
|
||
Capital expenditures
|
$
|
2.9
|
|
Depreciation and amortization
|
5.6
|
|
|
Provision for inventory reserves
|
4.2
|
|
|
|
13 Weeks Ended
|
||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
||||
New video game hardware
(1)
|
|
$
|
233.5
|
|
|
$
|
359.2
|
|
New video game software
|
|
446.4
|
|
|
466.7
|
|
||
Pre-owned and value video game products
|
|
395.3
|
|
|
495.7
|
|
||
Video game accessories
|
|
200.2
|
|
|
199.1
|
|
||
Digital
|
|
38.1
|
|
|
43.0
|
|
||
Collectibles
|
|
157.3
|
|
|
142.4
|
|
||
Other
(2)
|
|
76.9
|
|
|
79.7
|
|
||
Total
|
|
$
|
1,547.7
|
|
|
$
|
1,785.8
|
|
(1)
|
Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.
|
(2)
|
Includes mobile and consumer electronics sold through our Simply Mac branded stores. Also includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving
Game Informer
magazine in print form.
|
|
|
Contract Liabilities
|
||
Balance at February 2, 2019
|
|
$
|
376.9
|
|
Increase to contract liabilities
(1)
|
|
215.2
|
|
|
Decrease to contract liabilities
(2)
|
|
(239.9
|
)
|
|
Other adjustments
(3)
|
|
(2.0
|
)
|
|
Balance at May 4, 2019
|
|
$
|
350.2
|
|
(1)
|
Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to
Game Informer
and extended warranties sold.
|
(2)
|
Includes redemptions of gift cards, trade-in credits, loyalty points and reservation deposits as well as revenues recognized for
Game Informer
and extended warranties. During the
13 weeks ended May 4, 2019
, there were
$28.3 million
of gift cards redeemed that were outstanding as of February 2, 2019.
|
(3)
|
Primarily includes foreign currency translation adjustments.
|
|
|
May 4, 2019
|
|
May 5, 2018
|
|
February 2, 2019
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Foreign currency contracts
(1)
|
|
$
|
3.5
|
|
|
$
|
7.7
|
|
|
$
|
1.0
|
|
Company-owned life insurance
(2)
|
|
15.1
|
|
|
14.6
|
|
|
14.6
|
|
|||
Total assets
|
|
$
|
18.6
|
|
|
$
|
22.3
|
|
|
$
|
15.6
|
|
Liabilities
|
|
|
|
|
|
|
||||||
Foreign currency contracts
(3)
|
|
$
|
2.0
|
|
|
$
|
3.2
|
|
|
$
|
1.2
|
|
Nonqualified deferred compensation
(3)
|
|
1.2
|
|
|
1.1
|
|
|
1.1
|
|
|||
Total liabilities
|
|
$
|
3.2
|
|
|
$
|
4.3
|
|
|
$
|
2.3
|
|
(1)
|
Recognized in prepaid expenses and other current assets in our unaudited condensed consolidated balance sheets.
|
(2)
|
Recognized in other non-current assets in our unaudited condensed consolidated balance sheets.
|
(3)
|
Recognized in accrued liabilities in our unaudited condensed consolidated balance sheets.
|
|
|
13 Weeks Ended
|
||||||
|
|
May 4,
2019 |
|
May 5,
2018 |
||||
Gains (losses) on the change in fair value of derivative instruments
|
|
$
|
2.4
|
|
|
$
|
4.7
|
|
(Losses) gains on the re-measurement of related intercompany loans and foreign currency assets and liabilities
|
|
(2.4
|
)
|
|
(3.0
|
)
|
||
Net gains
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
|
13 Weeks Ended
|
||
|
|
May 4, 2019
|
||
Operating lease cost
|
|
$
|
86.2
|
|
Variable lease cost
(1)
|
|
24.3
|
|
|
Total rent expense
|
|
$
|
110.5
|
|
(1)
|
Variable lease cost includes percentage rentals and variable executory costs.
|
|
|
May 4, 2019
|
|
|
Weighted-average remaining lease term (years)
|
|
4.6
|
|
(1)
|
Weighted-average discount rate
|
|
4.6
|
%
|
|
(1)
|
The weighted-average remaining lease term is weighted based on the lease liability balance for each lease as of May 4, 2019. This weighted average calculation differs from our simple average remaining lease term due to the inclusion of reasonably certain renewal options and the effect of the lease liability value of longer term leases.
|
Period
|
|
|
Operating Leases
(1)
|
||
Remainder of Fiscal Year 2019, as of May 4, 2019
|
|
$
|
224.5
|
|
|
Fiscal Year 2020
|
|
218.5
|
|
||
Fiscal Year 2021
|
|
153.5
|
|
||
Fiscal Year 2022
|
|
107.6
|
|
||
Fiscal Year 2023
|
|
73.5
|
|
||
Thereafter
|
|
118.9
|
|
||
Total remaining lease payments
|
|
896.5
|
|
||
Less: Interest
|
|
(93.9
|
)
|
||
Present value of lease liabilities
|
|
$
|
802.6
|
|
Period
|
|
|
||
Fiscal Year 2019
|
$
|
296.2
|
|
|
Fiscal Year 2020
|
208.7
|
|
||
Fiscal Year 2021
|
149.1
|
|
||
Fiscal Year 2022
|
105.4
|
|
||
Fiscal Year 2023
|
71.4
|
|
||
Thereafter
|
116.2
|
|
||
|
|
$
|
947.0
|
|
|
May 4, 2019
|
|
May 5, 2018
|
|
February 2, 2019
|
||||||
2019 Senior Notes principal amount
|
$
|
—
|
|
|
$
|
350.0
|
|
|
$
|
350.0
|
|
2021 Senior Notes principal amount
|
471.9
|
|
|
475.0
|
|
|
475.0
|
|
|||
Less: Unamortized debt financing costs
|
(3.0
|
)
|
|
(6.4
|
)
|
|
(4.2
|
)
|
|||
|
$
|
468.9
|
|
|
$
|
818.6
|
|
|
$
|
820.8
|
|
Less: Current portion
|
—
|
|
|
—
|
|
|
(349.2
|
)
|
|||
Long-term debt, net
|
$
|
468.9
|
|
|
$
|
818.6
|
|
|
$
|
471.6
|
|
|
13 Weeks Ended
|
||||||
|
May 4,
2019 |
|
May 5,
2018 |
||||
Net income from continuing operations
|
$
|
7.5
|
|
|
$
|
20.4
|
|
(Loss) income from discontinued operations, net of tax
|
(0.7
|
)
|
|
7.8
|
|
||
Net income
|
$
|
6.8
|
|
|
$
|
28.2
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
102.4
|
|
|
101.8
|
|
||
Dilutive effect of stock options and restricted stock awards
|
0.1
|
|
|
0.2
|
|
||
Weighted-average diluted common shares outstanding
|
102.5
|
|
|
102.0
|
|
||
|
|
|
|
||||
Basic earnings (loss) per share:
(1)
|
|
|
|
||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
0.20
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.08
|
|
||
Basic earnings per share
|
$
|
0.07
|
|
|
$
|
0.28
|
|
|
|
|
|
||||
Diluted earnings (loss) per share:
(1)
|
|
|
|
||||
Continuing operations
|
$
|
0.07
|
|
|
$
|
0.20
|
|
Discontinued operations
|
(0.01
|
)
|
|
0.08
|
|
||
Diluted earnings per share
|
$
|
0.07
|
|
|
$
|
0.28
|
|
|
|
|
|
||||
Anti-dilutive stock options and restricted stock awards
|
0.8
|
|
|
1.6
|
|
(1)
|
The components of basic and diluted earnings per share may not sum to the total earnings per share due to rounding.
|
|
|
United
States
|
|
Canada
|
|
Australia
|
|
Europe
|
|
Consolidated
|
||||||||||
13 weeks ended May 4, 2019:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
1,143.2
|
|
|
$
|
72.6
|
|
|
$
|
101.6
|
|
|
$
|
230.3
|
|
|
$
|
1,547.7
|
|
Operating earnings (loss)
|
|
52.2
|
|
|
(5.3
|
)
|
|
(8.2
|
)
|
|
(21.2
|
)
|
|
17.5
|
|
|||||
13 weeks ended May 5, 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
1,293.2
|
|
|
$
|
81.9
|
|
|
$
|
122.1
|
|
|
$
|
288.6
|
|
|
$
|
1,785.8
|
|
Operating earnings (loss)
|
|
67.3
|
|
|
(0.3
|
)
|
|
(7.6
|
)
|
|
(12.9
|
)
|
|
46.5
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
13 Weeks Ended
|
||||||||||||
|
May 4, 2019
|
|
May 5, 2018
|
||||||||||
|
Amount
|
|
Percent of
Net Sales
|
|
Amount
|
|
Percent of
Net Sales
|
||||||
Net sales
|
$
|
1,547.7
|
|
|
100.0
|
%
|
|
$
|
1,785.8
|
|
|
100.0
|
%
|
Cost of sales
|
1,076.5
|
|
|
69.6
|
|
|
1,254.7
|
|
|
70.3
|
|
||
Gross profit
|
471.2
|
|
|
30.4
|
|
|
531.1
|
|
|
29.7
|
|
||
Selling, general and administrative expenses
|
430.6
|
|
|
27.8
|
|
|
456.1
|
|
|
25.5
|
|
||
Depreciation and amortization
|
23.1
|
|
|
1.5
|
|
|
28.5
|
|
|
1.6
|
|
||
Operating earnings
|
17.5
|
|
|
1.1
|
|
|
46.5
|
|
|
2.6
|
|
||
Interest expense, net
|
7.7
|
|
|
0.5
|
|
|
13.7
|
|
|
0.8
|
|
||
Earnings from continuing operations before income tax expense
|
9.8
|
|
|
0.6
|
|
|
32.8
|
|
|
1.8
|
|
||
Income tax expense
|
2.3
|
|
|
0.1
|
|
|
12.4
|
|
|
0.7
|
|
||
Net income from continuing operations
|
7.5
|
|
|
0.5
|
|
|
20.4
|
|
|
1.1
|
|
||
(Loss) income from discontinued operations, net of tax
|
(0.7
|
)
|
|
(0.1
|
)
|
|
7.8
|
|
|
0.5
|
|
||
Net income
|
$
|
6.8
|
|
|
0.4
|
%
|
|
$
|
28.2
|
|
|
1.6
|
%
|
|
|
13 Weeks Ended
|
||||||||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
||||||||||
|
|
Net
Sales
|
|
Percent
of Total
|
|
Net
Sales
|
|
Percent
of Total
|
||||||
New video game hardware
(1)
|
|
$
|
233.5
|
|
|
15.1
|
%
|
|
$
|
359.2
|
|
|
20.1
|
%
|
New video game software
|
|
446.4
|
|
|
28.8
|
|
|
466.7
|
|
|
26.1
|
|
||
Pre-owned and value video game products
|
|
395.3
|
|
|
25.5
|
|
|
495.7
|
|
|
27.8
|
|
||
Video game accessories
|
|
200.2
|
|
|
12.9
|
|
|
199.1
|
|
|
11.1
|
|
||
Digital
|
|
38.1
|
|
|
2.5
|
|
|
43.0
|
|
|
2.4
|
|
||
Collectibles
|
|
157.3
|
|
|
10.2
|
|
|
142.4
|
|
|
8.0
|
|
||
Other
(2)
|
|
76.9
|
|
|
5.0
|
|
|
79.7
|
|
|
4.5
|
|
||
Total
|
|
$
|
1,547.7
|
|
|
100.0
|
%
|
|
$
|
1,785.8
|
|
|
100.0
|
%
|
|
|
13 Weeks Ended
|
||||||||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
||||||||||
|
|
Gross
Profit
|
|
Gross
Profit
Percent
|
|
Gross
Profit
|
|
Gross
Profit
Percent
|
||||||
New video game hardware
(1)
|
|
$
|
22.5
|
|
|
9.6
|
%
|
|
$
|
35.2
|
|
|
9.8
|
%
|
New video game software
|
|
94.4
|
|
|
21.1
|
|
|
98.8
|
|
|
21.2
|
|
||
Pre-owned and value video game products
|
|
173.9
|
|
|
44.0
|
|
|
220.6
|
|
|
44.5
|
|
||
Video game accessories
|
|
72.5
|
|
|
36.2
|
|
|
67.5
|
|
|
33.9
|
|
||
Digital
|
|
34.8
|
|
|
91.3
|
|
|
38.2
|
|
|
88.8
|
|
||
Collectibles
|
|
51.4
|
|
|
32.7
|
|
|
45.8
|
|
|
32.2
|
|
||
Other
(2)
|
|
21.7
|
|
|
28.2
|
|
|
25.0
|
|
|
31.4
|
|
||
Total
|
|
$
|
471.2
|
|
|
30.4
|
%
|
|
$
|
531.1
|
|
|
29.7
|
%
|
(1)
|
Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.
|
(2)
|
Includes mobile and consumer electronics sold through our Simply Mac branded stores. Also includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our video game brands, and revenues from PowerUp Pro loyalty members receiving
Game Informer
magazine in print form.
|
|
|
13 Weeks Ended
|
|
Change
|
|||||||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$
|
|
%
|
|||||||
|
|
($ in millions)
|
|
|
|
|
|||||||||
Net sales
|
|
$
|
1,547.7
|
|
|
$
|
1,785.8
|
|
|
$
|
(238.1
|
)
|
|
(13.3
|
)%
|
Cost of sales
|
|
1,076.5
|
|
|
1,254.7
|
|
|
(178.2
|
)
|
|
(14.2
|
)
|
|||
Gross profit
|
|
471.2
|
|
|
531.1
|
|
|
(59.9
|
)
|
|
(11.3
|
)
|
|||
Selling, general and administrative expenses
|
|
430.6
|
|
|
456.1
|
|
|
(25.5
|
)
|
|
(5.6
|
)
|
|||
Depreciation and amortization
|
|
23.1
|
|
|
28.5
|
|
|
(5.4
|
)
|
|
(18.9
|
)
|
|||
Operating earnings
|
|
17.5
|
|
|
46.5
|
|
|
(29.0
|
)
|
|
(62.4
|
)
|
|||
Interest expense, net
|
|
7.7
|
|
|
13.7
|
|
|
(6.0
|
)
|
|
(43.8
|
)
|
|||
Earnings from continuing operations before income tax expense
|
|
9.8
|
|
|
32.8
|
|
|
(23.0
|
)
|
|
(70.1
|
)
|
|||
Income tax expense
|
|
2.3
|
|
|
12.4
|
|
|
(10.1
|
)
|
|
(81.5
|
)
|
|||
Net income from continuing operations
|
|
7.5
|
|
|
20.4
|
|
|
(12.9
|
)
|
|
(63.2
|
)
|
|||
(Loss) income from discontinued operations, net of tax
|
|
(0.7
|
)
|
|
7.8
|
|
|
(8.5
|
)
|
|
(109.0
|
)
|
|||
Net income
|
|
$
|
6.8
|
|
|
$
|
28.2
|
|
|
$
|
(21.4
|
)
|
|
(75.9
|
)%
|
|
|
13 Weeks Ended
|
|
Change
|
|||||||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$
|
|
%
|
|||||||
Net Sales:
|
|
($ in millions)
|
|
|
|
|
|||||||||
New video game hardware
(1)
|
|
$
|
233.5
|
|
|
$
|
359.2
|
|
|
$
|
(125.7
|
)
|
|
(35.0
|
)%
|
New video game software
|
|
446.4
|
|
|
466.7
|
|
|
(20.3
|
)
|
|
(4.3
|
)
|
|||
Pre-owned and value video game products
|
|
395.3
|
|
|
495.7
|
|
|
(100.4
|
)
|
|
(20.3
|
)
|
|||
Video game accessories
|
|
200.2
|
|
|
199.1
|
|
|
1.1
|
|
|
0.6
|
|
|||
Digital
|
|
38.1
|
|
|
43.0
|
|
|
(4.9
|
)
|
|
(11.4
|
)
|
|||
Collectibles
|
|
157.3
|
|
|
142.4
|
|
|
14.9
|
|
|
10.5
|
|
|||
Other
(2)
|
|
76.9
|
|
|
79.7
|
|
|
(2.8
|
)
|
|
(3.5
|
)
|
|||
Total
|
|
$
|
1,547.7
|
|
|
$
|
1,785.8
|
|
|
$
|
(238.1
|
)
|
|
(13.3
|
)%
|
|
|
13 Weeks Ended
|
|
Change
|
|||||||||||
|
|
May 4, 2019
|
|
May 5, 2018
|
|
$
|
|
%
|
|||||||
Gross Profit:
|
|
($ in millions)
|
|
|
|
|
|||||||||
New video game hardware
(1)
|
|
$
|
22.5
|
|
|
$
|
35.2
|
|
|
$
|
(12.7
|
)
|
|
(36.1
|
)%
|
New video game software
|
|
94.4
|
|
|
98.8
|
|
|
(4.4
|
)
|
|
(4.5
|
)
|
|||
Pre-owned and value video game products
|
|
173.9
|
|
|
220.6
|
|
|
(46.7
|
)
|
|
(21.2
|
)
|
|||
Video game accessories
|
|
72.5
|
|
|
67.5
|
|
|
5.0
|
|
|
7.4
|
|
|||
Digital
|
|
34.8
|
|
|
38.2
|
|
|
(3.4
|
)
|
|
(8.9
|
)
|
|||
Collectibles
|
|
51.4
|
|
|
45.8
|
|
|
5.6
|
|
|
12.2
|
|
|||
Other
(2)
|
|
21.7
|
|
|
25.0
|
|
|
(3.3
|
)
|
|
(13.2
|
)
|
|||
Total
|
|
$
|
471.2
|
|
|
$
|
531.1
|
|
|
$
|
(59.9
|
)
|
|
(11.3
|
)%
|
(1)
|
Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.
|
(2)
|
Includes mobile and consumer electronics sold through our Simply Mac branded stores. Also includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our video game brands, and revenues from PowerUp Pro loyalty members receiving
Game Informer
magazine in print form.
|
•
|
New video game hardware sales decreased
$125.7 million
, or
35.0%
, for the
13 weeks ended May 4, 2019
compared to the
13 weeks ended May 5, 2018
, primarily driven by a higher promotional activity in the prior year period, supply constraints in the market and the impact of next-generation console news; partially offset by an increase in sales of the Nintendo Switch.
|
•
|
Pre-owned and value video game product sales decreased
$100.4 million
, or
20.3%
, for the
13 weeks ended May 4, 2019
compared to the
13 weeks ended May 5, 2018
. The decrease was primarily driven by a decline in sales of pre-owned software due to weakening demand as a result of increasing digital adoption, including digital access to older titles.
|
•
|
New video game software sales decreased
$20.3 million
, or
4.3%
, for the
13 weeks ended May 4, 2019
compared to the
13 weeks ended May 5, 2018
, primarily due to a stronger lineup of new title releases in the prior year quarter.
|
As of and for the 13 Weeks Ended May 4, 2019
|
|
United
States
|
|
Canada
|
|
Australia
|
|
Europe
|
|
Consolidated
|
||||||||||
Net sales
|
|
$
|
1,143.2
|
|
|
$
|
72.6
|
|
|
$
|
101.6
|
|
|
$
|
230.3
|
|
|
$
|
1,547.7
|
|
Operating earnings (loss)
|
|
$
|
52.2
|
|
|
$
|
(5.3
|
)
|
|
$
|
(8.2
|
)
|
|
$
|
(21.2
|
)
|
|
$
|
17.5
|
|
Segment operating data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Store count
|
|
3,791
|
|
|
310
|
|
|
459
|
|
|
1,203
|
|
|
5,763
|
|
|||||
Comparable store sales
(1)
|
|
(10.2
|
)%
|
|
(6.4
|
)%
|
|
(8.2
|
)%
|
|
(12.6
|
)%
|
|
(10.3
|
)%
|
As of and for the 13 Weeks Ended May 5, 2018
|
|
United
States
|
|
Canada
|
|
Australia
|
|
Europe
|
|
Consolidated
|
||||||||||
Net sales
|
|
$
|
1,293.2
|
|
|
$
|
81.9
|
|
|
$
|
122.1
|
|
|
$
|
288.6
|
|
|
$
|
1,785.8
|
|
Operating earnings (loss)
|
|
$
|
67.3
|
|
|
$
|
(0.3
|
)
|
|
$
|
(7.6
|
)
|
|
$
|
(12.9
|
)
|
|
$
|
46.5
|
|
Segment operating data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Store count
|
|
3,899
|
|
|
318
|
|
|
467
|
|
|
1,236
|
|
|
5,920
|
|
|||||
Comparable store sales
(1)
|
|
(2.6
|
)%
|
|
(13.8
|
)%
|
|
(14.9
|
)%
|
|
(9.5
|
)%
|
|
(5.3
|
)%
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
Exhibit
Number
|
|
Description
|
|
Previously Filed as an Exhibit to and Incorporated by Reference From
|
|
Date Filed
|
10.1
|
|
|
Current Report on Form 8-K
|
|
March 21, 2019
|
|
10.2
|
|
|
Current Report on Form 8-K
|
|
May 10, 2019
|
|
10.3
|
|
|
Current Report on Form 8-K
|
|
May 30, 2019
|
|
10.4
|
|
|
Current Report on Form 8-K
|
|
May 30, 2019
|
|
10.5
|
|
|
Current Report on Form 8-K
|
|
May 30, 2019
|
|
10.6
|
|
|
Current Report on Form 8-K
|
|
April 1, 2019
|
|
31.1
|
|
|
Filed herewith.
|
|
|
|
31.2
|
|
|
Filed herewith.
|
|
|
|
32.1
|
|
|
Furnished herewith.
|
|
|
|
32.2
|
|
|
Furnished herewith.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
Submitted electronically herewith.
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
Submitted electronically herewith.
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
Submitted electronically herewith.
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
Submitted electronically herewith.
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
Submitted electronically herewith.
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
Submitted electronically herewith.
|
|
|
|
GAMESTOP CORP.
|
||
|
|
|
|
|
By:
|
|
/s/ JAMES A. BELL
|
|
|
|
James A. Bell
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date: June 11, 2019
|
|
|
|
|
|
||
|
GAMESTOP CORP.
|
||
|
|
|
|
|
By:
|
|
/s/ TROY W. CRAWFORD
|
|
|
|
Troy W. Crawford
|
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
Date: June 11, 2019
|
|
|
|
1
|
I have reviewed this report on Form 10-Q of GameStop Corp.;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ GEORGE E. SHERMAN
|
|
|
|
George E. Sherman
|
|
|
|
Chief Executive Officer
|
|
|
|
GameStop Corp.
|
|
1
|
I have reviewed this report on Form 10-Q of GameStop Corp.;
|
2
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ JAMES A. BELL
|
|
|
|
JAMES A. BELL
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
GameStop Corp.
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ GEORGE E. SHERMAN
|
|
|
George E. Sherman
|
|
|
Chief Executive Officer
|
|
|
GameStop Corp.
|
|
|
|
|
|
June 11, 2019
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ JAMES A. BELL
|
|
|
James A. Bell
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
GameStop Corp.
|
|
|
|
|
|
June 11, 2019
|
|