GameStop Corp. Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Total Sales: $1.02 billion, down 34% compared to Q1 2019 ($1.55 billion).
  • Comparable Store Sales: Down 17% globally, a sequential improvement over Q4 2019’s decline of 26%.
  • E-commerce Sales: Up 519% YoY; grew to over 50% of total sales during Q1. In some weeks, growth exceeded 1,500%.
  • Hardware Sales: Declined by 21.8%, driven by store closures. However, Nintendo Switch sales increased YoY and GameStop claims to be the top global retailer of the console.
  • Software and Collectibles Sales: Down ~43% each due to store closures and market basket effects. Titles like Animal Crossing, Final Fantasy VII Remake, and Doom Eternal significantly exceeded expectations.
  • Gross Margin: 27.7%, down 270 basis points from 30.4% in Q1 2019 due to a higher mix of lower-margin hardware sales.
  • SG&A: Adjusted SG&A was $381.2 million, a 16% reduction YoY. Included $21M in COVID-19 related expenses.
  • Operating Earnings: Adjusted operating loss of $98.8 million versus income of $17.5 million in Q1 2019.
  • Net Loss: Adjusted net loss of $103.9 million ($1.61/share) versus net income of $7.5 million ($0.07/share) in Q1 2019.

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Operator: Greetings. Welcome to the GameStop First Quarter 2020 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Eric Cerny, Investor Relations. You may begin. Eric Cerny: Thank you and welcome to GameStop's First Quarter Fiscal 2020 Earnings Conference Call. This call will include forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. Any such statements should be considered in conjunction with the cautionary statements in the safe harbor statement in the earnings release and risk factors discussed in reports filed with the SEC. GameStop assumes no obligation to update any of these forward-looking statements or information. A reconciliation and other information regarding non-GAAP financial measures discussed on the call can be found in the earnings release issued earlier today as well as the Investors section of our website. With me today are GameStop's Chief Executive Officer, George Sherman; and Chief Financial Officer, Jim Bell. On today's call, George will share insights in our first quarter performance and updates regarding GameStop's strategic framework for the future. Jim will then provide more detail on our financial results and expectations for fiscal 2020. Then we will open the call to take your questions. Now I would like to turn the call over to the company's Chief Executive O

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