GameStop (GME) 10-Q 9 Jun 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information (USD $)
In Billions, except Share data	3 Months Ended May. 01, 2010	Jun. 03, 2010	Jan. 31, 2009
Document and Entity Information [Abstract]
Entity Registrant Name	GameStop Corp.
Entity Central Index Key	0001326380
Document Type	10-Q
Document Period End Date	2010-05-01
Amendment Flag	false
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--01-30
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			3.6
Entity Common Stock, Shares Outstanding		151,540,280

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (USD $)
In Thousands	3 Months Ended May. 01, 2010	3 Months Ended May. 02, 2009	12 Months Ended Jan. 30, 2010
Current assets:
Cash and cash equivalents	$431,878	$230,255	$905,418
Receivables, net	36,031	47,265	64,006
Merchandise inventories, net	1,152,043	1,160,769	1,053,553
Deferred income taxes - current	16,561	19,000	21,229
Prepaid expenses	69,216	60,339	59,434
Other current assets	30,612	9,453	23,664
Total current assets	1,736,341	1,527,081	2,127,304
Property and equipment:
Land	11,655	10,801	11,569
Buildings and leasehold improvements	530,188	473,654	522,965
Fixtures and equipment	731,134	645,051	711,477
Total property and equipment	1,272,977	1,129,506	1,246,011
Less accumulated depreciation and amortization	697,645	570,062	661,810
Net property and equipment	575,332	559,444	584,201
Goodwill, net	1,941,306	1,873,503	1,946,513
Other intangible assets	245,725	254,133	259,860
Other noncurrent assets	36,667	36,992	37,449
Total noncurrent assets	2,799,030	2,724,072	2,828,023
Total assets	4,535,371	4,251,153	4,955,327
Current liabilities:
Accounts payable	767,490	775,554	961,673
Accrued liabilities	485,758	411,099	632,103
Taxes payable	32,154	43,261	61,900
Total current liabilities	1,285,402	1,229,914	1,655,676
Senior notes payable, long-term portion, net	447,567	495,571	447,343
Deferred taxes	19,869	6,308	25,466
Other long-term liabilities	102,680	101,904	103,831
Total long-term liabilities	570,116	603,783	576,640
Total liabilities	1,855,518	1,833,697	2,232,316
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock - authorized 5,000 shares; no shares issued or outstanding	0	0	0
Class A common stock - $.001 par value; authorized 300,000 shares; 152,853, 164,622 and 158,662 shares outstanding, respectively	153	165	159
Additional paid-in-capital	1,091,852	1,317,100	1,210,539
Accumulated other comprehensive income	115,411	9,268	114,704
Retained earnings	1,472,927	1,090,923	1,397,755
Equity attributable to GameStop Corp. stockholders	2,680,343	2,417,456	2,723,157
Equity (deficit) attributable to noncontrolling interest	(490)	0	(146)
Total equity	2,679,853	2,417,456	2,723,011
Total liabilities and stockholders' equity	$4,535,371	$4,251,153	$4,955,327

1_Condensed Consolidated Balanc

Condensed Consolidated Balance Sheets (Parenthetical)
Share data in Thousands	May. 01, 2010	Jan. 30, 2010	May. 02, 2009
Stockholders' equity:
Preferred stock, shares authorized	5,000	5,000	5,000
Preferred stock, shares issued	0	0	0
Preferred stock, shares outstanding	0	0	0
Common stock, par value	0.001	0.001	0.001
Common stock, shares authorized	300,000	300,000	300,000
Common stock, shares outstanding	152,853	158,662	164,622

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended May. 01, 2010		3 Months Ended May. 02, 2009
Condensed Consolidated Statements of Operations [Abstract]
Sales	$2,082,697		$1,980,753
Cost of sales	1,511,916		1,438,640
Gross profit	570,781		542,113
Selling, general and administrative expenses	403,836		375,832
Depreciation and amortization	42,513		37,827
Operating earnings	124,432		128,454
Interest income	(787)		(517)
Interest expense	10,361		12,198
Debt extinguishment expense			2,862
Earnings before income tax expense	114,858		113,911
Income tax expense	40,019		43,478
Consolidated net income	74,839		70,433
Net loss attributable to noncontrolling interests	333
Consolidated net income attributable to GameStop	$75,172		$70,433
Basic net income per common share	0.49	[1]	0.43	[1]
Diluted net income per common share	0.48	[1]	0.42	[1]
Weighted average shares of common stock - basic	153,566		164,474
Weighted average shares of common stock - diluted	156,484		167,972
[1]Basic net income per share and diluted net income per share are calculated based on consolidated net income attributable to GameStop.

2_Condensed Consolidated Statem

Condensed Consolidated Statement of Changes in Equity (Unaudited) (USD $)
In Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income	Retained Earnings	Noncontrolling Interest	Total
Beginning Balance, Shares at Jan. 30, 2010	158,662
Beginning Balance at Jan. 30, 2010	$159	$1,210,539	$114,704	$1,397,755	($146)	$2,723,011
Comprehensive income:
Net income (loss) for the 13 weeks ended May 1, 2010				75,172	(333)	74,839
Foreign currency translation			707		(11)	696
Total comprehensive income						75,535
Stock-based compensation		7,221				7,221
Purchase of treasury stock	(7)	(124,237)				(124,244)
Purchase of treasury stock, shares	(6,528)
Exercise of stock options and issuance of shares upon vesting of restricted stock grants (including tax expense of $2,666)	1	(1,671)				(1,670)
Exercise of stock options and issuance of shares upon vesting of restricted stock grants (including tax expense of $2,666), shares	719
Ending Balance at May. 01, 2010	$153	$1,091,852	$115,411	$1,472,927	($490)	$2,679,853
Ending Balance, Shares at May. 01, 2010	152,853

3_Condensed Consolidated Statem

Condensed Consolidated Statement of Changes in Equity (Unaudited) (Parenthetical) (USD $)
In Thousands	3 Months Ended May. 01, 2010
Tax expense for Exercise of employee stock options and issuance of shares upon vesting of restricted stock grants	$2,666
Additional Paid-in Capital
Tax expense for Exercise of employee stock options and issuance of shares upon vesting of restricted stock grants	$2,666

4_Condensed Consolidated Statem

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	3 Months Ended May. 01, 2010	3 Months Ended May. 02, 2009
Cash flows from operating activities:
Consolidated net income	$74,839	$70,433
Adjustments to reconcile net income to net cash flows used in operating activities:
Depreciation and amortization (including amounts in cost of sales)	42,972	38,213
Amortization and retirement of deferred financing fees and issue discounts	830	1,767
Stock-based compensation expense	7,221	7,337
Deferred income taxes	1,832	2,693
Excess tax expense realized from exercise of stock-based awards	2,702	491
Loss on disposal of property and equipment	2,080	669
Changes in other long-term liabilities	(1,103)	3,080
Change in the value of foreign exchange contracts	(1,209)	11,769
Changes in operating assets and liabilities, net
Receivables, net	27,618	19,788
Merchandise inventories	(101,911)	(62,392)
Prepaid expenses and other current assets	(10,170)	3,028
Prepaid income taxes and accrued income taxes payable	(32,858)	25,861
Accounts payable and accrued liabilities	(270,788)	(391,457)
Net cash flows used in operating activities	(257,945)	(268,720)
Cash flows from investing activities:
Purchase of property and equipment	(35,337)	(36,630)
Other	(689)	(3,973)
Net cash flows used in investing activities	(36,026)	(40,603)
Cash flows from financing activities:
Repurchase of notes payable		(50,765)
Purchase of treasury shares	(188,853)
Issuance of shares relating to stock options	996	2,770
Excess tax expense realized from exercise of stock-based awards	(2,702)	(491)
Net cash flows used in financing activities	(190,559)	(48,486)
Exchange rate effect on cash and cash equivalents	10,990	9,923
Net decrease in cash and cash equivalents	(473,540)	(347,886)
Cash and cash equivalents at beginning of period	905,418	578,141
Cash and cash equivalents at end of period	$431,878	$230,255

Basis of Presentation

Basis of Presentation
	3 Months Ended May. 01, 2010
Basis of Presentation [Abstract]
Basis of Presentation	1. Basis of Presentation GameStop Corp. (together with its predecessor companies, GameStop, we, our, or the Company), a Delaware corporation, is the worlds largest retailer of video game products and PC entertainment software. The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. All dollar and share amounts in the consolidated financial statements and notes to the consolidated financial statements are stated in thousands of U.S.dollars unless otherwise indicated. The unaudited consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in the opinion of the Companys management, necessary for a fair presentation of the information for the periods presented. These unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and the instructions to Quarterly Report on Form10-Q and Article10 of RegulationS-X. Accordingly, they do not include all disclosures required under GAAP for complete financial statements. These consolidated financial statements should be read in conjunction with the Companys annual report on Form10-K for the 52weeks ended January30, 2010 (fiscal 2009). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. Changes in the estimates and assumptions used by management could have significant impact on the Companys financial results. Actual results could differ from those estimates. Due to the seasonal nature of the business, the results of operations for the 13weeks ended May1, 2010 are not indicative of the results to be expected for the 52weeks ending January29, 2011 (fiscal 2010). Certain reclassifications have been made to conform the prior period data to the current interim period presentation.

Accounting for Stock-Based Comp

Accounting for Stock-Based Compensation
	3 Months Ended May. 01, 2010
Accounting for Stock-Based Compensation [Abstract]
Accounting for Stock-Based Compensation	2. Accounting for Stock-Based Compensation The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model. This valuation model requires the use of subjective assumptions, including expected option life, expected volatility and expected employee forfeiture rate. The Company uses historical data to estimate the option life and the employee forfeiture rate, and uses historical volatility when estimating the stock price volatility. The options to purchase common stock granted during the 13weeks ended May1, 2010 and May2, 2009 were 1,177 and 1,419, respectively, with a weighted-average fair value estimated at $7.88 and $9.45, respectively, using the following assumptions: 13 Weeks Ended May1, May2, 2010 2009 Volatility 51.6 % 47.9 % Risk-free interest rate 1.8 % 1.5 % Expected life (years) 3.5 3.5 Expected dividend yield 0 % 0 % In the 13weeks ended May1, 2010 and May2, 2009, the Company included compensation expense relating to stock option grants of $2,965 and $2,412, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. As of May1, 2010, the unrecognized compensation expense related to the unvested portion of our stock options was $18,475, which is expected to be recognized over a weighted average period of 2.0years. The total intrinsic value of options exercised during the 13weeks ended May1, 2010 and May2, 2009 were $2,063 and $2,198, respectively. The restricted stock granted during the 13weeks ended May1, 2010 and May2, 2009 were 683shares and 571shares, respectively. The shares had a fair market value of $20.32 and $26.02 per share, respectively, and vest in equal annual installments over three years. During the 13weeks ended May1, 2010 and May2, 2009, the Company included compensation expense relating to the restricted share grants in the amount of $4,256 and $4,925, respectively, in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations. As of May1, 2010, there was $27,288 of unrecognized compensation expense related to nonvested restricted stock awards that is expected to be recognized over a weighted average period of 2.1years.

Computation of Net Income per C

Computation of Net Income per Common Share
	3 Months Ended May. 01, 2010
Computation of Net Income per Common Share [Abstract]
Computation of Net Income per Common Share	3. Computation of Net Income Per Common Share A reconciliation of shares used in calculating basic and diluted net income per common share is as follows: 13 Weeks Ended May1, May2, 2010 2009 (In thousands, except per share data) Net income attributable to GameStop $ 75,172 $ 70,433 Weighted average common shares outstanding 153,566 164,474 Dilutive effect of options and restricted shares on common stock 2,918 3,498 Common shares and dilutive potential common shares 156,484 167,972 Net income per common share: Basic $ 0.49 $ 0.43 Diluted $ 0.48 $ 0.42 The following table contains information on restricted shares and options to purchase shares of ClassA common stock which were excluded from the computation of diluted earnings per share because they were anti-dilutive: Anti- Range of Dilutive Exercise Expiration Shares Prices Dates (In thousands, except per share data) 13 Weeks Ended May1, 2010 4,739 $ 20.32 - 49.95 2010 - 2020 13 Weeks Ended May2, 2009 3,618 $ 26.02 - 49.95 2010 - 2018

Fair Value Measurements and Fin

Fair Value Measurements and Financial Instruments
	3 Months Ended May. 01, 2010
Fair Value Measurements and Financial Instruments [Abstract]
Fair Value Measurements and Financial Instruments	4. Fair Value Measurements and Financial Instruments The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value accounting guidance applies to our forward exchange contracts, foreign currency options and cross-currency swaps (together, the Foreign Currency Contracts), Company-owned life insurance policies with a cash surrender value and certain nonqualified deferred compensation liabilities that are measured at fair value on a recurring basis in periods subsequent to initial recognition. Fair value accounting guidance requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level1 inputs are quoted prices in active markets for identical assets or liabilities. Level2 inputs are observable inputs other than quoted prices included within Level1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants. We value our Foreign Currency Contracts, Company-owned life insurance policies with cash surrender values and certain nonqualified deferred compensation liabilities based on Level2 inputs using quotations provided by major market news services, such as Bloomberg and The Wall Street Journal, and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, and contractual prices for the underlying instruments, as well as other relevant economic measures. When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. The following table provides the fair value of our assets and liabilities measured on a recurring basis and recorded on our consolidated balance sheets, in thousands: May1, 2010 May2, 2009 January30, 2010 Level 2 Level 2 Level 2 Assets Foreign Currency Contracts $ 27,291 $ 6,734 $ 20,062 Company-owned life insurance 2,808 2,174 2,584 Total assets $ 30,099 $ 8,908 $ 22,646 Liabilities Foreign Currency Contracts $ 6,588 $ 9,996 $ 8,991 Nonqualified deferred compensation 826 920 762 Total liabilities $ 7,414 $ 10,916 $ 9,753 The Company uses Foreign Currency Contracts to manage currency risk primarily related to intercompany loans denominated in non-functional currencies and certain foreign currency assets and liabilities. These Foreign Currency Contracts are not designated

Debt

Debt
	3 Months Ended May. 01, 2010
Debt [Abstract]
Debt	5. Debt In October 2005, the Company entered into a five-year, $400,000 Credit Agreement (the Revolver), including a $50,000 letter of credit sub-limit, secured by the assets of the Company and its U.S.subsidiaries. The Revolver places certain restrictions on the Company and its subsidiaries, including limitations on asset sales, additional liens and the incurrence of additional indebtedness. In April 2007, the Company amended the Revolver to extend the maturity date from October11, 2010 to April25, 2012, reduce the LIBO interest rate margin, reduce and fix the rate of the unused commitment fee and modify or delete certain other covenants. The extension of the Revolver to 2012 reduces our exposure to the current tightening in the credit markets. The availability under the Revolver is limited to a borrowing base which allows the Company to borrow up to the lesser of (x)approximately 70% of eligible inventory and (y)90% of the appraisal value of the inventory, in each case plus 85% of eligible credit card receivables, net of certain reserves. Letters of credit reduce the amount available to borrow by their face value. The Companys ability to pay cash dividends, redeem options and repurchase shares is generally prohibited, except that if availability under the Revolver is, or will be after any such payment, equal to or greater than 25% of the borrowing base, the Company may repurchase its capital stock and pay cash dividends. In addition, in the event that credit extensions under the Revolver at any time exceed 80% of the lesser of the total commitment or the borrowing base, the Company will be subject to a fixed charge coverage ratio covenant of 1.5:1.0. The per annum interest rate on the Revolver is variable and, at the Companys option, is calculated by applying a margin of (1)0.0% to 0.25% above the higher of the prime rate of the administrative agent or the federal funds effective rate plus 0.50% or (2)1.00% to 1.50% above the LIBO rate. The applicable margin is determined quarterly as a function of the Companys consolidated leverage ratio. As of May1, 2010, the applicable margin was 0.0% for prime rate loans and 1.00% for LIBO rate loans. In addition, the Company is required to pay a commitment fee of 0.25% for any unused portion of the total commitment under the Revolver. As of May1, 2010, there were no borrowings outstanding under the Revolver and letters of credit outstanding totaled $8,213. In September 2007, the Companys Luxembourg subsidiary entered into a discretionary $20,000 Uncommitted Line of Credit (the Line of Credit) with Bank of America. There is no term associated with the Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit will be made available to the Companys foreign subsidiaries for use primarily as a bank overdraft facility for short-term liquidity needs and for the issuance of bank guarantees and letters of credit to support operations. As of May1, 2010, there were cash overdrafts of $4,058 outstanding under the Line of Credit and bank guarantees outstanding totaled $15,803. In September 2005, the Company, along with GameStop,

Income Taxes

Income Taxes
	3 Months Ended May. 01, 2010
Income Taxes [Abstract]
Income Taxes	6. Income Taxes The Company and its subsidiaries file income tax returns in the U.S.federal jurisdiction and various states and foreign jurisdictions. The Company is no longer subject to U.S.federal income tax examination by the Internal Revenue Service (IRS) for years before and including the fiscal year ended January28, 2006. The IRS completed an examination of EBs U.S.income tax return for the short year ended October8, 2005 during fiscal 2009. EB is no longer subject to U.S.federal income tax examination by tax authorities for fiscal years prior to and including the short year ended October8, 2005. We accrue for the effects of uncertain tax positions and the related potential penalties and interest. There were no net material adjustments to our recorded liability for unrecognized tax benefits during the 13weeks ended May1, 2010. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions could significantly increase or decrease during the next 12months. At this time, an estimate of the range of the reasonably possible outcomes cannot be made. The tax provisions for the 13weeks ended May1, 2010 and May2, 2009 are based upon managements estimate of the Companys annualized effective tax rate.

Certain Relationships and Relat

Certain Relationships and Related Transactions
	3 Months Ended May. 01, 2010
Certain Relationships and Related Transactions [Abstract]
Certain Relationships and Related Transactions	7. Certain Relationships and Related Transactions The Company operates departments within seven bookstores operated by Barnes Noble, Inc. (Barnes Noble), a related party through a common stockholder who is the Chairman of the Board of Directors of Barnes Noble and a member of the Companys Board of Directors. The Company pays a license fee to Barnes Noble on the gross sales of such departments. The Company deems the license fee to be reasonable and based upon terms equivalent to those that would prevail in an arms length transaction. During the 13weeks ended May1, 2010 and May2, 2009, these charges amounted to $226 and $250, respectively. In May 2005, the Company entered into an arrangement with Barnes Noble under which www.gamestop.com became the exclusive specialty video game retailer listed on www.bn.com, Barnes Nobles e-commerce site. Under the terms of this agreement, the Company pays a fee to Barnes Noble for sales of video game or PC entertainment products sold through www.bn.com. For the 13weeks ended May1, 2010 and May2, 2009, the fee to Barnes Noble totaled $62 and $82, respectively. Until June 2005, GameStop participated in Barnes Nobles workers compensation, property and general liability insurance programs. The costs incurred by Barnes Noble under these programs were allocated to GameStop based upon total payroll expense, property and equipment, and insurance claim history of GameStop. Although GameStop secured its own insurance coverage, costs will likely continue to be incurred by Barnes Noble on insurance claims which were incurred under its programs prior to June 2005 and any such costs applicable to insurance claims against GameStop will be allocated to the Company. During the 13weeks ended May1, 2010 and May2, 2009, these allocated charges amounted to $10 and $62, respectively.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended May. 01, 2010
Commitments and Contingencies [Abstract]
Commitments and Contingencies	8. Commitments and Contingencies On February14, 2005, and as amended, Steve Strickland, as personal representative of the Estate of Arnold Strickland, deceased, Henry Mealer, as personal representative of the Estate of Ace Mealer, deceased, and Willie Crump, as personal representative of the Estate of James Crump, deceased, filed a wrongful death lawsuit in the Circuit Court of Fayette, Alabama, against GameStop, Sony, Take-Two Interactive, Rock Star Games and Wal-Mart (collectively, the Defendants) and Devin Moore, alleging that Defendants actions in designing, manufacturing, marketing and supplying Defendant Moore with violent video games were negligent and contributed to Defendant Moore killing Arnold Strickland, Ace Mealer and James Crump. Moore was found guilty of capital murder in a criminal trial and was sentenced to death in August 2005. Plaintiffs counsel named an expert who plaintiffs indicated would testify that violent video games were a substantial factor in causing the murders. The testimony of plaintiffs psychologist expert was heard by the Court on October30, 2008, and the motion to exclude that testimony was argued on December12, 2008. On July30, 2009, the trial court entered its Order granting summary judgment for all defendants, dismissing the case with prejudice on the grounds that plaintiffs experts testimony did not satisfy the Frye standard for expert admissibility. Subsequent to the entry of the Order, the plaintiffs filed a notice of appeal. The plaintiffs have filed their appellate brief in support of their appeal and the defendants have filed their consolidated appellate brief in opposition to the appeal. The Company does not believe there is sufficient information to estimate the amount of the possible loss, if any, resulting from the lawsuit if the plaintiffs appeal is successful. In the ordinary course of the Companys business, the Company is, from time to time, subject to various other legal proceedings, including matters involving wage and hour employee class actions. The Company may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if it believes settlement is in the best interest of the Companys shareholders. Management does not believe that any such other legal proceedings or settlements, individually or in the aggregate, will have a material adverse effect on the Companys financial condition, results of operations or liquidity. In 2003, the Company purchased a 51% controlling interest in GameStop Group Limited, which operates stores in Ireland and the United Kingdom. Under the terms of the purchase agreement, the minority interest owners have the ability to require the Company to purchase their remaining shares in incremental percentages at a price to be determined based partially on the Companys price to earnings ratio and GameStop Group Limiteds earnings. Shares representing approximately 16% were purchased in June 2008 and in July 2009 an additional 16% was purchased, bringing the Companys total interest in GameStop Group Limited to approximately 84%. The Company already consolidates the result

Significant Products

Significant Products
	3 Months Ended May. 01, 2010
Significant Products [Abstract]
Significant Products	9. Significant Products The following table sets forth sales (in millions) by significant product category for the periods indicated: 13 Weeks Ended May1, May2, 2010 2009 Percent Percent Sales of Total Sales of Total Sales: New video game hardware $ 348.3 16.7 % $ 395.9 20.0 % New video game software 873.1 41.9 % 770.5 38.9 % Used video game products 570.8 27.4 % 548.5 27.7 % Other 290.5 14.0 % 265.9 13.4 % Total $ 2,082.7 100.0 % $ 1,980.8 100.0 % The following table sets forth gross profit (in millions) and gross profit percentages by significant product category for the periods indicated: 13 Weeks Ended May1, May2, 2010 2009 Gross Gross Gross Profit Gross Profit Profit Percent Profit Percent Gross Profit: New video game hardware $ 21.2 6.1 % $ 24.1 6.1 % New video game software 174.5 20.0 % 165.5 21.5 % Used video game products 274.4 48.1 % 263.6 48.1 % Other 100.7 34.7 % 88.9 33.4 % Total $ 570.8 27.4 % $ 542.1 27.4 %

Segment Information

Segment Information
	3 Months Ended May. 01, 2010
Segment Information [Abstract]
Segment Information	10. Segment Information The Company operates its business in the following segments: United States, Canada, Australia and Europe. Segment results for the United States include retail operations in all 50states, the District of Columbia, Guam and Puerto Rico, the electronic commerce Web site www.gamestop.com and Game Informer Magazine. Segment results for Canada include retail operations in Canada and segment results for Australia include retail operations in Australia and New Zealand. Segment results for Europe include retail operations in 13 European countries. The Company measures segment profit using operating earnings, which is defined as income from continuing operations before intercompany royalty fees, net interest expense and income taxes. There has been no material change in total assets by segment since January30, 2010. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. Information on segments appears in the following tables: Net sales by operating segment were as follows: 13 Weeks Ended May1, May2, 2010 2009 United States $ 1,531,228 $ 1,474,758 Canada 104,297 97,232 Australia 107,170 91,602 Europe 340,002 317,161 Total $ 2,082,697 $ 1,980,753 Segment operating earnings (loss) were as follows: 13 Weeks Ended May1, May2, 2010 2009 United States $ 118,574 $ 112,546 Canada 3,742 4,804 Australia 2,566 5,623 Europe (450 ) 5,481 Total $ 124,432 $ 128,454

Supplemental Cash Flow Informat

Supplemental Cash Flow Information
	3 Months Ended May. 01, 2010
Supplemental Cash Flow Information [Abstract]
Supplemental Cash Flow Information	11. Supplemental Cash Flow Information 13 Weeks Ended May1, May2, 2010 2009 Cash paid during the period for: Interest $ 18,336 $ 22,502 Income taxes $ 71,209 $ 8,363

Consolidating Financial Stateme

Consolidating Financial Statements
	3 Months Ended May. 01, 2010
Consolidating Financial Statements [Abstract]
Consolidating Financial Statements	12. Consolidating Financial Statements In order to finance the EB merger, as described in Note5, on September28, 2005, the Company, along with GameStop, Inc. as co-issuer, completed the offering of the Notes. The direct and indirect U.S.wholly-owned subsidiaries of the Company, excluding GameStop, Inc., as co-issuer, have guaranteed the Senior Notes on a senior unsecured basis with unconditional guarantees. The following condensed consolidating financial statements present the financial position as of May1, 2010, May2, 2009 and January30, 2010 and results of operations and cash flows for the 13weeks ended May1, 2010 and May2, 2009 of the Companys guarantor and non-guarantor subsidiaries. GameStop Corp. Condensed Consolidating Balance Sheet Issuers and Guarantor Non-Guarantor Subsidiaries Subsidiaries Consolidated May1, May1, May1, 2010 2010 Eliminations 2010 (Amounts in thousands, except per share amounts) (Unaudited) ASSETS: Current assets: Cash and cash equivalents $ 298,783 $ 133,095 $ $ 431,878 Receivables, net 151,551 619,435 (734,955 ) 36,031 Merchandise inventories, net 673,436 478,607 1,152,043 Deferred income taxes current 13,193 3,368 16,561 Prepaid expenses 44,768 24,448 69,216 Other current assets 5,882 24,730 30,612 Total current assets 1,187,613 1,283,683 (734,955 ) 1,736,341 Property and equipment: Land 2,670 8,985 11,655 Buildings and leasehold improvements 301,750 228,438 530,188 Fixtures and equipment 586,375 144,759 731,134 Total property and equipment 890,795 382,182 1,272,977 Less accumulated depreciation and amortization 522,091 175,554 697,645 Net property and equipment 368,704 206,628 575,332 Investment 2,060,673 595,945 (2,656,618 ) Goodwill, net 1,096,622 844,684 1,941,306 Other intangible assets 2,476 243,249 245,725 Other noncurrent assets 9,133 27,534 36,667 Total noncurrent assets 3,537,608 1,918,040 (2

Subsequent Events

Subsequent Events
	3 Months Ended May. 01, 2010
Subsequent Events [Abstract]
Subsequent Events	13. Subsequent Events On January11, 2010, the Board of Directors of the Company approved a $300,000share repurchase program authorizing the Company to repurchase its common stock. Since the end of the 13-week period ended May1, 2010, the Company has purchased an additional 1,320.7shares for an average price per share of $21.43.