GameStop Quarterly Report: Q2 2018

Key insights

6 takeaways

01
GameStop's net sales for the 13 weeks ended May 5, 2018, were $1,934.0 million, representing a decrease from $2,045.9 million in the same period of the prior year.See it on page 1
02
Net income for the 13 weeks ended May 5, 2018, was $28.2 million, down from $59.0 million for the 13 weeks ended April 29, 2017.See it on page 1
03
The company operated 7,216 stores as of May 5, 2018, across its global retail network.See it on page 1
04
Operating earnings for the 13 weeks ended May 5, 2018, were $57.1 million, compared to $101.1 million for the 13 weeks ended April 29, 2017.See it on page 1
05
The company is contesting a tax reassessment from the French Tax Administration involving a collection notice of approximately €80.0 million.See it on page 1
06
The adoption of the new revenue recognition standard (ASU 2014-09) resulted in a $16.1 million increase to retained earnings, or $11.5 million net of tax.See it on page 1

Summary

This Form 10-Q report details the financial performance of GameStop Corp. for the 13-week period ended May 5, 2018. The company operates as a global retailer of video games, consumer electronics, and wireless services, maintaining 7,216 company-operated stores across the United States, Canada, Australia, and Europe. Financial results are presented on a consolidated basis, reflecting the company's performance across its five reportable segments: four geographic Video Game Brands segments and a Technology Brands segment.

For the 13 weeks ended May 5, 2018, GameStop reported net sales of $1,934.0 million, compared to $2,045.9 million for the 13 weeks ended April 29, 2017. Net income for the current period was $28.2 million, a decrease from $59.0 million in the prior year period. Operating earnings were $57.1 million, down from $101.1 million in the same period of 2017. The company's cash and cash equivalents totaled $247.2 million as of May 5, 2018, compared to $864.4 million as of February 3, 2018.

During the first quarter of fiscal 2018, the company adopted new accounting standards for revenue recognition, which resulted in a $16.1 million increase to retained earnings. The company also noted that it is currently contesting a tax reassessment from the French Tax Administration regarding fiscal years 2008 through 2015, which resulted in a tax collection notice of approximately €80.0 million received on January 16, 2018.