gme-20221029

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED OCTOBER 29, 2022


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NO. 1-32637

GameStop Corp.

(Exact name of registrant as specified in its charter)


Delaware		20-2733559
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

625 Westport Parkway		76051
Grapevine,	Texas
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:

(817) 424-2000

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock

GME

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of $.001 par value Class A Common Stock outstanding as of December 1, 2022: 304,578,070

TABLE OF CONTENTS



Part I — FINANCIAL INFORMATION
		Page No.
Item 1.	Financial Statements (unaudited)	1

	Condensed Consolidated Balance Sheets — As of October 29, 2022, October 30, 2021 and January 29, 2022	1

	Condensed Consolidated Statements of Operations — For the three and nine months ended October 29, 2022 and October 30, 2021	2

	Condensed Consolidated Statements of Comprehensive Loss — For the three and nine months ended October 29, 2022 and October 30, 2021	3

	Condensed Consolidated Statements of Cash Flows — For the nine months ended October 29, 2022 and October 30, 2021	4

	Condensed Consolidated Statements of Stockholders’ Equity — For the three and nine months ended October 29, 2022 and October 30, 2021	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20

Item 4.	Controls and Procedures	20

PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

SIGNATURES		27

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

GAMESTOP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value per share)

(unaudited)


	October 29, 2022		October 30, 2021		January 29, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	803.8	$	1,413.0	$	1,271.4
Marketable securities	238.3		—		—
Receivables, net of allowance of $2.0, $5.1 and $3.3, respectively	125.3		83.4		141.1
Merchandise inventories	1,131.3		1,140.9		915.0
Prepaid expenses and other current assets	283.1		275.8		271.3
Total current assets	2,581.8		2,913.1		2,598.8
Property and equipment, net of accumulated depreciation of $981.4, $1,122.0 and $1,029.8, respectively	138.5		179.6		163.6
Operating lease right-of-use assets	523.2		615.8		586.6
Deferred income taxes	14.3		—		16.3
Other noncurrent assets	64.7		53.5		134.0
Total assets	$	3,322.5	$	3,762.0	$	3,499.3

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	888.4	$	711.5	$	471.0
Accrued liabilities and other current liabilities	504.2		608.5		668.9
Current portion of operating lease liabilities	186.2		211.9		210.7
Current portion of long-term debt	9.9		1.4		4.1
Total current liabilities	1,588.7		1,533.3		1,354.7
Long-term debt	28.8		44.8		40.5
Operating lease liabilities	349.6		409.7		393.7
Other long-term liabilities	110.4		19.3		107.9
Total liabilities	2,077.5		2,007.1		1,896.8
Stockholders’ equity:
Class A common stock — $.001 par value; 1,000 shares authorized; 304.3, 303.6 and 303.6 shares issued and outstanding, respectively	0.1		0.1		0.1
Additional paid-in capital	1,606.4		1,567.9		1,577.5
Accumulated other comprehensive loss	(93.8)		(54.2)		(68.7)
Retained (loss) earnings	(267.7)		241.1		93.6
Total stockholders’ equity	1,245.0		1,754.9		1,602.5
Total liabilities and stockholders’ equity	$	3,322.5	$	3,762.0	$	3,499.3

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GAMESTOP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)


	Three Months Ended				Nine Months Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Net sales	$	1,186.4	$	1,296.6	$	3,700.8	$	3,756.8
Cost of sales	894.8		978.0		2,828.5		2,787.2
Gross profit	291.6		318.6		872.3		969.6
Selling, general and administrative expenses	387.9		421.5		1,227.6		1,170.7
Asset impairments	—		—		2.5		0.6
Operating loss	(96.3)		(102.9)		(357.8)		(201.7)
Interest (income) expense and other, net	(3.7)		0.8		(3.3)		26.0
Loss before income taxes	(92.6)		(103.7)		(354.5)		(227.7)
Income tax expense	2.1		1.7		6.8		6.1
Net loss	$	(94.7)	$	(105.4)	$	(361.3)	$	(233.8)

Net loss per share:
Basic	$	(0.31)	$	(0.35)	$	(1.19)	$	(0.82)
Diluted	(0.31)		(0.35)		(1.19)		(0.82)

Weighted-average shares outstanding:
Basic	304.2		303.6		304.1		286.0
Diluted	304.2		303.6		304.1		286.0

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GAMESTOP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in millions)

(unaudited)


	Three Months Ended				Nine Months Ended
	October 29, 2022		October 30, 2021		October 29, 2022		October 30, 2021
Net loss	$	(94.7)	$	(105.4)	$	(361.3)	$	(233.8)
Other comprehensive loss:
Foreign currency translation adjustment	(16.6)		2.1		(24.9)		(4.9)
Net change in unrealized loss on available-for-sale securities	(0.2)		—		(0.2)		—
Total comprehensive loss	$	(111.5)	$	(103.3)	$	(386.4)	$	(238.7)

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GAMESTOP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)


	Nine Months Ended
	October 29, 2022		October 30, 2021
Cash flows from operating activities:
Net loss	$	(361.3)	$	(233.8)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization	47.5		53.2
Stock-based compensation expense	32.2		20.7
Gain on sale of digital assets	(7.1)		—
Digital asset impairments	33.9		—
Asset impairments	2.5		0.6
Loss on disposal of property and equipment, net	5.1		1.9
Loss on retirement of debt	—		18.2
Other, net	6.9		(1.4)
Changes in operating assets and liabilities:
Receivables, net	13.3		21.0
Merchandise inventories	(245.0)		(545.2)
Prepaid expenses and other assets	(38.7)		(5.1)
Prepaid income taxes and income taxes payable	0.9		(12.9)
Accounts payable and accrued liabilities	288.7		376.9
Operating lease right-of-use assets and lease liabilities	(7.7)		(18.1)
Changes in other long-term liabilities	(1.2)		—
Net cash flows used in operating activities	(230.0)		(324.0)
Cash flows from investing activities:
Proceeds from sale of digital assets	77.4		—
Purchases of marketable securities	(237.0)		—
Capital expenditures	(44.3)		(40.7)
Other	0.3		(0.4)
Net cash flows used in investing activities	(203.6)		(41.1)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of costs	—		1,672.8
Repayments of revolver borrowings	—		(25.0)
Payments of senior notes	—		(307.4)
Settlement of stock-based awards	(3.3)		(136.6)
Other	—		(0.1)
Net cash flows (used in) provided by financing activities	(3.3)		1,203.7
Exchange rate effect on cash, cash equivalents and restricted cash	(23.5)		(5.5)
(Decrease) increase in cash, cash equivalents and restricted cash	(460.4)		833.1
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	$	859.5	$	1,468.1

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GAMESTOP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except for per share data)

(unaudited)


	Class A Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Earnings (Loss)		Total Stockholders' Equity
	Shares	Amount
Balance at January 29, 2022	303.6	$	0.1	$	1,577.5	$	(68.7)	$	93.6	$	1,602.5
Net loss	—	—		—		—		(157.9)		(157.9)
Foreign currency translation	—	—		—		(3.9)		—		(3.9)
Stock-based compensation expense	—	—		11.1		—		—		11.1
Settlement of stock-based awards	—	—		(1.1)		—		—		(1.1)
Balance at April 30, 2022	303.6	$	0.1	$	1,587.5	$	(72.6)	$	(64.3)	$	1,450.7
Net loss	—	—		—		—		(108.7)		(108.7)
Foreign currency translation	—	—		—		(4.4)		—		(4.4)
Stock-based compensation expense	—	—		7.8		—		—		7.8
Settlement of stock-based awards	0.4	—		(1.9)		—		—		(1.9)
Balance at July 30, 2022	304.0	$	0.1	$	1,593.4	$	(77.0)	$	(173.0)	$	1,343.5
Net loss	—	—		—		—		(94.7)		(

SEC Form 10-Q filed by GameStop Corporation