Cover
Cover - shares | 3 Months Ended | |
Apr. 30, 2022 | May 26, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-32637 | |
Entity Registrant Name | GameStop Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2733559 | |
Entity Address, Address Line One | 625 Westport Parkway | |
Entity Address, City or Town | Grapevine, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76051 | |
City Area Code | (817) | |
Local Phone Number | 424-2000 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | GME | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 76,129,034 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001326380 | |
Current Fiscal Year End Date | --01-28 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Current assets: | |||
Cash and cash equivalents | $ 1,035 | $ 1,271.4 | $ 694.7 |
Restricted cash | 33.3 | 33.1 | 57.4 |
Receivables, net of allowance of $3.5, $3.7 and $3.3, respectively | 103.4 | 141.1 | 102.1 |
Merchandise inventories | 917.6 | 915 | 570.9 |
Prepaid expenses and other current assets | 240.3 | 238.2 | 232.1 |
Total current assets | 2,329.6 | 2,598.8 | 1,657.2 |
Property and equipment, net of accumulated depreciation of $993.6, $1,109.9, and $1,029.8, respectively | 157.4 | 163.6 | 192.6 |
Operating lease right-of-use assets | 568.7 | 586.6 | 654.2 |
Deferred income taxes | 16.7 | 16.3 | 0 |
Long-term restricted cash | 15.3 | 15.4 | 18.7 |
Other noncurrent assets | 37.8 | 118.6 | 40 |
Total assets | 3,125.5 | 3,499.3 | 2,562.7 |
Current liabilities: | |||
Accounts payable | 386.8 | 471 | 388.6 |
Accrued liabilities and other current liabilities | 533.3 | 668.9 | 561.8 |
Current portion of operating lease liabilities | 200.3 | 210.7 | 219.4 |
Current portion of long-term debt | 6.5 | 4.1 | 48.1 |
Total current liabilities | 1,126.9 | 1,354.7 | 1,217.9 |
Long-term debt | 35.7 | 40.5 | 0 |
Operating lease liabilities | 374.5 | 393.7 | 445 |
Other long-term liabilities | 137.7 | 107.9 | 20.3 |
Total liabilities | 1,674.8 | 1,896.8 | 1,683.2 |
Stockholders’ equity: | |||
Class A common stock — $.001 par value; 300 shares authorized; 75.9, 69.3 and 75.9 shares issued and outstanding, respectively | 0.1 | 0.1 | 0.1 |
Additional paid-in capital | 1,587.5 | 1,577.5 | 518.5 |
Accumulated other comprehensive loss | (72.6) | (68.7) | (47.2) |
Retained (loss) earnings | (64.3) | 93.6 | 408.1 |
Total stockholders’ equity | 1,450.7 | 1,602.5 | 879.5 |
Total liabilities and stockholders’ equity | $ 3,125.5 | $ 3,499.3 | $ 2,562.7 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Statement of Financial Position [Abstract] | |||
Receivables, net of allowances | $ 3.5 | $ 3.3 | $ 3.7 |
Accumulated depreciation | $ 993.6 | $ 1,029.8 | $ 1,109.9 |
Class A common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Class A common stock, shares authorized (in shares) | 300 | 300 | 300 |
Class A common stock, shares issued (in shares) | 75.9 | 75.9 | 69.3 |
Class A common stock, shares outstanding (in shares) | 75.9 | 75.9 | 69.3 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 1,378.4 | $ 1,276.8 |
Cost of sales | 1,079.9 | 946.7 |
Gross profit | 298.5 | 330.1 |
Selling, general and administrative expenses | 452.2 | 370.3 |
Asset impairments | 0 | 0.6 |
Operating loss | (153.7) | (40.8) |
Interest expense, net | 0.7 | 24.7 |
Loss before income taxes | (154.4) | (65.5) |
Income tax expense | 3.5 | 1.3 |
Net loss | $ (157.9) | $ (66.8) |
Net loss per share: | ||
Basic (in dollars per share) | $ (2.08) | $ (1.01) |
Diluted (in dollars per share) | $ (2.08) | $ (1.01) |
Weighted-average shares outstanding: | ||
Basic (in shares) | 75.9 | 66 |
Diluted (in shares) | 75.9 | 66 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (157.9) | $ (66.8) |
Other comprehensive loss: | ||
Foreign currency translation adjustment | (3.9) | 2.1 |
Total comprehensive loss | $ (161.8) | $ (64.7) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (157.9) | $ (66.8) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 17.1 | 18.7 |
Stock-based compensation expense | 11.1 | 5.7 |
Gain on sale of digital assets | (6.9) | 0 |
Digital asset impairments | 33.7 | 0 |
Asset impairments | 0 | 0.6 |
Loss on disposal of property and equipment, net | 0.4 | 0.4 |
Loss on retirement of debt | 0 | 18.2 |
Other, net | (4.8) | (0.5) |
Changes in operating assets and liabilities: | ||
Receivables, net | 36.3 | 3.1 |
Merchandise inventories | (9.9) | 32.4 |
Prepaid expenses and other assets | (30.3) | (2.9) |
Prepaid income taxes and income taxes payable | 3.5 | (1.2) |
Accounts payable and accrued liabilities | (179.8) | (11.4) |
Operating lease right-of-use assets and lease liabilities | (16.4) | (15) |
Changes in other long-term liabilities | 0 | (0.1) |
Net cash flows used in operating activities | (303.9) | (18.8) |
Cash flows from investing activities: | ||
Proceeds from sale of digital assets | 76.9 | 0 |
Capital expenditures | (10.8) | (14.7) |
Net cash flows provided by (used in) investing activities | 66.1 | (14.7) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock, net of costs | 0 | 551.7 |
Repayments of revolver borrowings | 0 | (25) |
Payments of senior notes | 0 | (307.4) |
Settlement of stock-based awards | (1.1) | (49.9) |
Other | 0 | (0.1) |
Net cash flows (used in) provided by financing activities | (1.1) | 169.3 |
Exchange rate effect on cash, cash equivalents and restricted cash | 2.6 | 0 |
(Decrease) increase in cash, cash equivalents and restricted cash | (236.3) | 135.8 |
Cash, cash equivalents and restricted cash at beginning of period | 1,319.9 | 635 |
Cash, cash equivalents and restricted cash at end of period | $ 1,083.6 | $ 770.8 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Millions, $ in Millions | Total | Class A Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings |
Beginning balance (in shares) at Jan. 30, 2021 | 65.3 | ||||
Beginning balance at Jan. 30, 2021 | $ 436.7 | $ 0.1 | $ 11 | $ (49.3) | $ 474.9 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (66.8) | (66.8) | |||
Issuance of common stock, net of cost (in shares) | 3.5 | ||||
Issuance of common stock, net of cost | 551.7 | 551.7 | |||
Foreign currency translation | 2.1 | 2.1 | |||
Stock-based compensation expense | 5.7 | 5.7 | |||
Settlement of stock-based awards (in shares) | 0.5 | ||||
Settlement of stock-based awards | (49.9) | (49.9) | |||
Ending balance (in shares) at May. 01, 2021 | 69.3 | ||||
Ending balance at May. 01, 2021 | 879.5 | $ 0.1 | 518.5 | (47.2) | 408.1 |
Beginning balance (in shares) at Jan. 29, 2022 | 75.9 | ||||
Beginning balance at Jan. 29, 2022 | 1,602.5 | $ 0.1 | 1,577.5 | (68.7) | 93.6 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
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) | |||
Ending balance (in shares) at Apr. 30, 2022 | 75.9 | ||||
Ending balance at Apr. 30, 2022 | $ 1,450.7 | $ 0.1 | $ 1,587.5 | $ (72.6) | $ (64.3) |
General Information
General Information | 3 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
General Information | General Information The Company GameStop Corp. (“GameStop,” “we,” “us,” “our,” or the “Company”) offers games, entertainment products and technology through its ecommerce properties and stores. We operate our business in four geographic segments: United States, Canada, Australia and Europe. The information contained in these consolidated financial statements refers to continuing operations unless otherwise noted. Basis of Presentation and Consolidation The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information for the periods presented. These consolidated 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 Form 10-Q and Article 10 of Regulation S-X. Accordingly, they exclude certain disclosures required under GAAP for complete consolidated financial statements. The accompanying consolidated financial statements and notes are unaudited. The consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the 52 weeks ended January 29, 2022, as filed with the Securities and Exchange Commission ("SEC") on March 17, 2022 (the “2021 Annual Report on Form 10-K”). Due to the seasonal nature of our business, our results of operations for the three months ended April 30, 2022 are not indicative of our future results for the 52 weeks ending January 28, 2023. Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Each of our fiscal years ending January 28, 2023 and January 29, 2022 consist of 52 weeks. All three month periods presented herein contain 13 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Our business, like that of many retailers, is seasonal, with the major portion of the net sales realized during the fourth quarter, which includes the holiday selling season. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying footnotes. We regularly evaluate the estimates related to our assets and liabilities, contingent assets and liabilities, and the reported amounts of revenues and expenses. In preparing these consolidated financial statements, we have made our best estimates and judgments of certain amounts recognized in the consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions that we have used could have a significant impact on our financial results. Actual results could differ from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no material changes to our significant accounting policies included in Note 2 , "Summary of Significant Accounting Policies," in the 2021 Annual Report on Form 10-K. Included below are certain updates related to those policies. Digital Assets We account for digital assets in accordance with ASC 350, Intangibles-Goodwill and Other (Topic 350) . Our digital assets are indefinite-lived intangible assets which are initially recorded at cost. Accordingly, if the fair market value at any point during the reporting period is lower than the carrying value, an impairment loss equal to the difference will be recognized in selling, general and administrative ("SG&A") expenses in our Consolidated Statement of Operations. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale or disposal of the asset. Gains on the sale of digital assets, if any, will be recognized based on the fair value upon sale or disposal of the assets in SG&A expenses in our Consolidated Statement of Operations. In January 2022, we entered into a partnership with Immutable X Pty Limited (“IMX”) and Digital Worlds NFTs Ltd. ("Digital Worlds") pursuant to which the Company was entitled to receive digital assets in the form of IMX tokens once certain milestones have been achieved. Upon entering the agreement, we recognized the fair value of noncurrent receivables and deferred income of $79.0 million. In February 2022, upon announcement of the agreement, we recognized the fair value of noncurrent receivables and deferred income of $31.7 million. Noncurrent receivables and deferred income are recognized in other noncurrent assets and other long-term liabilities, respectively, on our Consolidated Balance Sheets. Once the IMX tokens were received, we recorded the digital asset as an indefinite-lived intangible asset and derecognized the noncurrent receivable. The deferred income is recognized over the term of the agreement. During the first quarter of 2022, we recognized $13.9 million of income in SG&A expenses in our Consolidated Statement of Operations. In February 2022, we sold the digital assets related to this transaction and recognized a gain on sale of $6.9 million in SG&A expenses in our Consolidated Statement of Operations. At-the-Market Equity Offering During the three months ended May 1, 2021, we sold an aggregate of 3,500,000 shares of our common stock under our at-the market equity offering program (the "ATM Transaction"). We generated $556.7 million in aggregate gross proceeds from sales under the ATM Transaction and paid an aggregate of $5.0 million in commissions to the sales agent, among other legal and administrative fees. These commissions and fees are recognized in additional paid-in capital on our Consolidated Balance Sheets and SG&A expenses in our Consolidated Statements of Operations. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 3 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides practical expedients for contract modifications with the transition from reference rates, such as LIBOR, that are expected to be discontinued. This guidance is applicable for our revolving line of credit, which uses LIBOR as a reference rate. The provisions of ASU 2020-04 are effective as of March 12, 2020 and may be adopted prospectively through December 31, 2022. As of January 30, 2022, we adopted this ASU with no material impact to our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard is intended to simplify the accounting and disclosure requirements for income taxes by eliminating various exceptions in accounting for income taxes as well as clarifying and amending existing guidance to improve consistency in application of ASC 740. The provisions of ASU 2019-12 are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. As of January 30, 2022, we adopted this ASU with no material impact to our consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Apr. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The following table presents net sales by significant product category: Three Months Ended April 30, May 1, Hardware and accessories (1) $ 673.8 $ 703.5 Software (2) 483.7 397.9 Collectibles 220.9 175.4 Total $ 1,378.4 $ 1,276.8 __________________________________________________ (1) Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are sold together in a single SKU, interactive game figures, strategy guides, mobile and consumer electronics. (2) Includes sales of new and pre-owned gaming software, digital software, and PC entertainment software. See Note 9 , "Segment Information," for net sales by geographic location. Performance Obligations We have arrangements with customers where our performance obligations are satisfied over time, which primarily relate to extended warranties and our Game Informer ® magazine. We expect to recognize revenue in future periods for remaining performance obligations we have associated with unredeemed gift cards, trade-in credits, reservation deposits and our PowerUp Rewards loyalty program (collectively, "unredeemed customer liabilities"), extended warranties and subscriptions to our Game Informer ® magazine. Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time customers redeem gift cards, trade-in credits, customer deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance. We offer extended warranties on certain new and pre-owned products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a straight-line basis over the life of the contract. Performance obligations associated with subscriptions to Game Informer ® magazine are satisfied when periodic magazines are delivered in print form or made available in digital format. The following table presents our performance obligations: Three Months Ended April 30, May 1, Unredeemed customer liabilities $ 201.3 $ 200.3 Extended warranties 84.7 81.0 Subscription 44.0 41.3 Significant Judgments and Estimates We accrue PowerUp Rewards loyalty points at the estimated retail price per point, net of estimated breakage, which can be redeemed by loyalty program members for products we offer. The estimated retail price per point is based on the actual historical retail prices of products purchased through the redemption of loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates. Contract Balances Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with gift cards, extended warranties and subscriptions to Game Informer ® magazine. The following table presents a rollforward of our contract liabilities: April 30, May 1, Contract liability beginning balance $ 378.3 $ 348.2 Increase to contract liabilities (1) 207.0 208.7 Decrease to contract liabilities (2) (253.5) (234.5) Other adjustments (3) (1.8) 0.2 Contract liability ending balance $ 330.0 $ 322.6 __________________________________________________ (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 customer deposits and revenues recognized for Game Informer ® and extended warranties. During the three months ended April 30, 2022, there were $27.3 million of gift cards redeemed that were outstanding as of January 29, 2022. During the three months ended May 1, 2021, there were $23.5 million of gift cards redeemed that were outstanding as of January 30, 2021. (3) Primarily includes foreign currency translation adjustments. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Apr. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial InstrumentsFair value is defined 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. Applicable accounting standards require 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. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants. Assets and Liabilities that are Measured at Fair Value on a Recurring Basis Assets and liabilities that are measured at fair value on a recurring basis include our foreign currency contracts, Company-owned life insurance policies with a cash surrender value, and certain nonqualified deferred compensation liabilities. We value our foreign currency contracts, life insurance policies with cash surrender values and certain nonqualified deferred compensation liabilities based on Level 2 inputs using quotations provided by major market news services, such as Bloomberg , and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, and contractual prices for the underlying instruments, and other relevant economic measures, all of which are observable in active markets. When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. The following table presents our assets and liabilities measured at fair value on a recurring basis, which utilize Level 2 inputs: April 30, May 1, January 29, 2022 Assets Foreign currency contracts (1) $ 4.7 $ 2.7 $ 3.8 Company-owned life insurance (2) 0.5 2.8 0.6 Total assets $ 5.2 $ 5.5 $ 4.4 Liabilities Foreign currency contracts (3) $ — $ 0.8 $ 0.4 Nonqualified deferred compensation (3) 0.5 0.6 0.6 Total liabilities $ 0.5 $ 1.4 $ 1.0 _________________________________________________ (1) Recognized in prepaid expenses and other current assets on our Consolidated Balance Sheets. (2) Recognized in other noncurrent assets on our Consolidated Balance Sheets. (3) Recognized in accrued liabilities and other current liabilities on our Consolidated Balance Sheets. Assets that are Measured at Fair Value on a Nonrecurring Basis Assets that are measured at fair value on a nonrecurring basis relate primarily to property and equipment, operating lease right-of-use ("ROU") assets and other intangible assets, including digital assets, which are remeasured when the estimated fair value is below its carrying value. When we determine that impairment has occurred, the carrying value of the asset is reduced to its fair value. Fair value of digital assets held are based on Level 2 inputs, as described above, and impairment losses for digital assets cannot be recovered for any subsequent increase in fair value until the sale or disposal of the asset. During the three months ended April 30, 2022, we recognized impairment charges of $33.7 million associated with digital assets in SG&A expenses in our Consolidated Statements of Operations. These charges were recognized in the United States segment. During the three months ended May 1, 2021, we recognized impairment charges totaling $0.6 million associated with store-level ROU assets to reflect their fair values in asset impairments in our Consolidated Statements of Operations. These charges were recognized in our United States segment. The carrying values of our cash and cash equivalents, restricted cash, net receivables, accounts payable and current portion of debt approximate their fair values due to their short-term maturities. |
Debt
Debt | 3 Months Ended |
Apr. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt During 2020, our French subsidiary, Micromania SAS, entered into six separate unsecured term loans for a total of €40.0 million, or $42.2 million, as of April 30, 2022. In the second quarter of 2021, at the request of Micromania SAS, these term loans were extended for five years, with an amortization plan for the principal starting in October 2022. The interest rate is 0.7% for three of the term loans totaling €20.0 million, and 1% for the remaining three term loans totaling €20.0 million. The French government has guaranteed 90% of the term loans pursuant to a state guaranteed loan program instituted in connection with the COVID-19 pandemic. As of April 30, 2022, May 1, 2021 and January 29, 2022 there was $42.2 million, $48.1 million and $44.6 million of outstanding debt, including $6.5 million, $48.1 million and $4.1 million of short-term and current debt, respectively, which represents the current portion of the French Term Loans. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letter of Credit Facilities We maintain uncommitted letter of credit facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of April 30, 2022, we had approximately $14.4 million of outstanding letters of credit and bank guarantees under these facilities. During the three months ended April 30, 2022, there were no material changes to our commitments as disclosed in our 2021 Annual Report on Form 10-K except as discussed in Note 6 , "Debt." Legal Proceedings In the ordinary course of business, we are, from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions and consumer class actions. We may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations or liquidity. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, unvested restricted stock and unvested restricted stock units outstanding during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be anti-dilutive. A net loss from continuing operations causes all potentially dilutive securities to be anti-dilutive. We have certain undistributed stock awards that participate in dividends on a non-forfeitable basis, however, their impact on earnings per share under the two-class method is negligible. The following table presents a reconciliation of shares used in calculating basic and diluted net loss per common share: Three Months Ended April 30, May 1, Weighted-average common shares outstanding 75.9 66.0 Dilutive effect of restricted stock awards — — Weighted-average diluted common shares 75.9 66.0 Anti-dilutive shares: Restricted stock units 1.2 — Restricted stock 0.2 2.6 As of April 30, 2022 and May 1, 2021 there were 1.4 million and 2.6 million, respectively, of unvested restricted stock and restricted stock units. As of April 30, 2022 and May 1, 2021 there were 77.3 million and 71.9 million, respectively, of shares of Class A common stock that are legally issued and outstanding or are unvested restricted share units that represent a right to one share of Class A Common Stock. As of April 30, 2022, 12.7 million shares of our Class A common stock were directly registered with our transfer agent. |
Segment Information
Segment Information | 3 Months Ended |
Apr. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We operate our business in four geographic segments: United States, Canada, Australia and Europe. We identified segments based on a combination of geographic areas and management responsibility. Segment results for the United States include retail operations in 50 states; our ecommerce operations; and Game Informer ® magazine. The United States segment also includes general and administrative expenses related to our corporate offices in the United States. Segment results for Canada include retail and ecommerce operations in Canada and segment results for Australia include retail and ecommerce operations in Australia and New Zealand. Segment results for Europe include retail and ecommerce operations in six countries. We measure segment profit using operating earnings, which is defined as income (loss) from operations before intercompany royalty fees, net interest expense and income taxes. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were no material intersegment sales during the three months ended April 30, 2022 and May 1, 2021. United Canada Australia Europe Consolidated Three months ended April 30, 2022 Net sales $ 995.3 $ 76.9 $ 126.7 $ 179.5 $ 1,378.4 Operating loss (144.2) (1.1) 1.6 (10.0) (153.7) Three months ended May 1, 2021 Net sales $ 966.3 $ 61.9 $ 114.8 $ 133.8 $ 1,276.8 Operating loss (3.6) (2.9) (0.4) (33.9) (40.8) |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Coronavirus Aid, Relief, and Economic Securities Act (the "CARES Act"), which was enacted on March 27, 2020 in the United States, included measures to assist companies, including temporary changes to income and non-income-based tax laws. As of April 30, 2022, we have a $168.6 million U.S. federal income tax receivable resulting from the carryback of net operating losses allowed pursuant to the CARES Act. Income tax receivable is recognized in prepaid expenses and other current assets on our Consolidated Balance Sheets. Our interim tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events and/or adjustments that may occur during the first quarter. We recognized an income tax expense of $3.5 million, or (2.3)%, for the three months ended April 30, 2022 compared to an income tax expense of $1.3 million, or (2.0)%, for the three months ended May 1, 2021. Our effective income tax rate for both periods is primarily due to not recognizing tax benefits on certain current period losses as well as forecasted income taxes due in certain foreign and state jurisdictions in which we operate. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information for the periods presented. These consolidated 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 Form 10-Q and Article 10 of Regulation S-X. Accordingly, they exclude certain disclosures required under GAAP for complete consolidated financial statements. |
Fiscal Period | The accompanying consolidated financial statements and notes are unaudited. The consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the 52 weeks ended January 29, 2022, as filed with the Securities and Exchange Commission ("SEC") on March 17, 2022 (the “2021 Annual Report on Form 10-K”). Due to the seasonal nature of our business, our results of operations for the three months ended April 30, 2022 are not indicative of our future results for the 52 weeks ending January 28, 2023. Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Each of our fiscal years ending January 28, 2023 and January 29, 2022 consist of 52 weeks. All three month periods presented herein contain 13 weeks. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Our business, like that of many retailers, is seasonal, with the major portion of the net sales realized during the fourth quarter, which includes the holiday selling season. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and accompanying footnotes. We regularly evaluate the estimates related to our assets and liabilities, contingent assets and liabilities, and the reported amounts of revenues and expenses. In preparing these consolidated financial statements, we have made our best estimates and judgments of certain amounts recognized in the consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions that we have used could have a significant impact on our financial results. Actual results could differ from those estimates. |
Digital Assets | Digital Assets We account for digital assets in accordance with ASC 350, Intangibles-Goodwill and Other (Topic 350) . Our digital assets are indefinite-lived intangible assets which are initially recorded at cost. Accordingly, if the fair market value at any point during the reporting period is lower than the carrying value, an impairment loss equal to the difference will be recognized in selling, general and administrative ("SG&A") expenses in our Consolidated Statement of Operations. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale or disposal of the asset. Gains on the sale of digital assets, if any, will be recognized based on the fair value upon sale or disposal of the assets in SG&A expenses in our Consolidated Statement of Operations. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides practical expedients for contract modifications with the transition from reference rates, such as LIBOR, that are expected to be discontinued. This guidance is applicable for our revolving line of credit, which uses LIBOR as a reference rate. The provisions of ASU 2020-04 are effective as of March 12, 2020 and may be adopted prospectively through December 31, 2022. As of January 30, 2022, we adopted this ASU with no material impact to our consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard is intended to simplify the accounting and disclosure requirements for income taxes by eliminating various exceptions in accounting for income taxes as well as clarifying and amending existing guidance to improve consistency in application of ASC 740. The provisions of ASU 2019-12 are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. As of January 30, 2022, we adopted this ASU with no material impact to our consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Sales and Percentage of Total Net Sales by Significant Product Category | The following table presents net sales by significant product category: Three Months Ended April 30, May 1, Hardware and accessories (1) $ 673.8 $ 703.5 Software (2) 483.7 397.9 Collectibles 220.9 175.4 Total $ 1,378.4 $ 1,276.8 __________________________________________________ (1) Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are sold together in a single SKU, interactive game figures, strategy guides, mobile and consumer electronics. (2) Includes sales of new and pre-owned gaming software, digital software, and PC entertainment software. |
Performance Obligations Associated with Subscriptions | The following table presents our performance obligations: Three Months Ended April 30, May 1, Unredeemed customer liabilities $ 201.3 $ 200.3 Extended warranties 84.7 81.0 Subscription 44.0 41.3 |
Contract with Customer, Asset and Liability | The following table presents a rollforward of our contract liabilities: April 30, May 1, Contract liability beginning balance $ 378.3 $ 348.2 Increase to contract liabilities (1) 207.0 208.7 Decrease to contract liabilities (2) (253.5) (234.5) Other adjustments (3) (1.8) 0.2 Contract liability ending balance $ 330.0 $ 322.6 __________________________________________________ (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 customer deposits and revenues recognized for Game Informer ® and extended warranties. During the three months ended April 30, 2022, there were $27.3 million of gift cards redeemed that were outstanding as of January 29, 2022. During the three months ended May 1, 2021, there were $23.5 million of gift cards redeemed that were outstanding as of January 30, 2021. (3) Primarily includes foreign currency translation adjustments. |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents our assets and liabilities measured at fair value on a recurring basis, which utilize Level 2 inputs: April 30, May 1, January 29, 2022 Assets Foreign currency contracts (1) $ 4.7 $ 2.7 $ 3.8 Company-owned life insurance (2) 0.5 2.8 0.6 Total assets $ 5.2 $ 5.5 $ 4.4 Liabilities Foreign currency contracts (3) $ — $ 0.8 $ 0.4 Nonqualified deferred compensation (3) 0.5 0.6 0.6 Total liabilities $ 0.5 $ 1.4 $ 1.0 _________________________________________________ (1) Recognized in prepaid expenses and other current assets on our Consolidated Balance Sheets. (2) Recognized in other noncurrent assets on our Consolidated Balance Sheets. (3) Recognized in accrued liabilities and other current liabilities on our Consolidated Balance Sheets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Shares Used in Calculating Basic and Diluted Net Loss Per Common Share | The following table presents a reconciliation of shares used in calculating basic and diluted net loss per common share: Three Months Ended April 30, May 1, Weighted-average common shares outstanding 75.9 66.0 Dilutive effect of restricted stock awards — — Weighted-average diluted common shares 75.9 66.0 Anti-dilutive shares: Restricted stock units 1.2 — Restricted stock 0.2 2.6 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Segment Reporting [Abstract] | |
Information on Segments and Reconciliation to Earnings Before Income Taxes | We identified segments based on a combination of geographic areas and management responsibility. Segment results for the United States include retail operations in 50 states; our ecommerce operations; and Game Informer ® magazine. The United States segment also includes general and administrative expenses related to our corporate offices in the United States. Segment results for Canada include retail and ecommerce operations in Canada and segment results for Australia include retail and ecommerce operations in Australia and New Zealand. Segment results for Europe include retail and ecommerce operations in six countries. We measure segment profit using operating earnings, which is defined as income (loss) from operations before intercompany royalty fees, net interest expense and income taxes. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were no material intersegment sales during the three months ended April 30, 2022 and May 1, 2021. United Canada Australia Europe Consolidated Three months ended April 30, 2022 Net sales $ 995.3 $ 76.9 $ 126.7 $ 179.5 $ 1,378.4 Operating loss (144.2) (1.1) 1.6 (10.0) (153.7) Three months ended May 1, 2021 Net sales $ 966.3 $ 61.9 $ 114.8 $ 133.8 $ 1,276.8 Operating loss (3.6) (2.9) (0.4) (33.9) (40.8) |
General Information (Details)
General Information (Details) | 3 Months Ended |
Apr. 30, 2022segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 4 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Digital Assets (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Apr. 30, 2022 | May 01, 2021 | Feb. 28, 2022 | Jan. 29, 2022 | Jan. 30, 2021 | |
Indefinite-lived Intangible Assets [Line Items] | |||||
Contract liability beginning balance | $ 330 | $ 322.6 | $ 378.3 | $ 348.2 | |
Gain on sale of digital assets | (6.9) | $ 0 | |||
Digital Assets | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Noncurrent receivable | $ 31.7 | 79 | |||
Contract liability beginning balance | $ 31.7 | $ 79 | |||
Deferred income recognized | $ 13.9 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - At-the-Market Equity Offering (Details) shares in Millions, $ in Millions | 3 Months Ended |
May 01, 2021USD ($)shares | |
Subsidiary or Equity Method Investee [Line Items] | |
Gross proceeds from sale of common stock | $ 556.7 |
Fees paid to sales agent | $ 5 |
Common Stock | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of shares sold (in shares) | shares | 3.5 |
Revenue - Sales and Percentage
Revenue - Sales and Percentage of Total Net Sales by Significant Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 1,378.4 | $ 1,276.8 |
Hardware and accessories | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 673.8 | 703.5 |
Software | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 483.7 | 397.9 |
Collectibles | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 220.9 | $ 175.4 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) | 3 Months Ended |
Apr. 30, 2022 | |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Extended warranty term | 12 months |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Extended warranty term | 24 months |
Revenue - Performance Obligatio
Revenue - Performance Obligations (Details) - USD ($) $ in Millions | Apr. 30, 2022 | May 01, 2021 |
Unredeemed customer liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligation | $ 201.3 | $ 200.3 |
Extended warranties | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligation | 84.7 | 81 |
Subscription | ||
Disaggregation of Revenue [Line Items] | ||
Performance obligation | $ 44 | $ 41.3 |
Revenue - Change In Contract Li
Revenue - Change In Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Contract With Customer, Contract Liabilities [Roll Forward] | ||
Contract liability beginning balance | $ 378.3 | $ 348.2 |
Increase to contract liabilities | 207 | 208.7 |
Decrease to contract liabilities | (253.5) | (234.5) |
Other adjustments | (1.8) | 0.2 |
Contract liability ending balance | 330 | 322.6 |
Gift Card Trade In Credits | ||
Contract With Customer, Contract Liabilities [Roll Forward] | ||
Revenue recognized | $ (27.3) | $ (23.5) |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value - Fair Value, Recurring - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Assets | |||
Foreign currency contracts | $ 4.7 | $ 3.8 | $ 2.7 |
Company-owned life insurance | 0.5 | 0.6 | 2.8 |
Total assets | 5.2 | 4.4 | 5.5 |
Liabilities | |||
Foreign currency contracts | 0 | 0.4 | 0.8 |
Nonqualified deferred compensation | 0.5 | 0.6 | 0.6 |
Total liabilities | $ 0.5 | $ 1 | $ 1.4 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Narrative (Details) € in Millions, $ in Millions | 3 Months Ended | ||
Apr. 30, 2022USD ($) | May 01, 2021USD ($) | Jan. 29, 2022EUR (€) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Digital asset impairments | $ 33.7 | $ 0 | |
Asset impairments | 0 | $ 0.6 | |
Unsecured Debt | French term loans due in 2026 | Fair Value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debt | 39 | ||
Unsecured Debt | French Term Loans and Credit Facility | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt issued | $ 42.2 | € 40 |
Debt (Details)
Debt (Details) € in Millions, $ in Millions | 3 Months Ended | |||||
Jul. 31, 2021EUR (€)loan | Apr. 30, 2022USD ($) | Jan. 29, 2022EUR (€) | Jan. 29, 2022USD ($) | May 01, 2021USD ($) | Jan. 30, 2021loan | |
Debt Disclosure [Line Items] | ||||||
Net carrying value | $ | $ 42.2 | $ 44.6 | $ 48.1 | |||
Current debt | $ | (6.5) | $ (4.1) | $ (48.1) | |||
French Term Loans and Credit Facility | Unsecured Debt | ||||||
Debt Disclosure [Line Items] | ||||||
Number of separate unsecured term loans | loan | 6 | |||||
Debt issued | $ 42.2 | € 40 | ||||
Debt instrument, extension term | 5 years | |||||
Percent guaranteed by French government | 90.00% | |||||
French term loans due July 2021 | Unsecured Debt | ||||||
Debt Disclosure [Line Items] | ||||||
Number of separate unsecured term loans | loan | 3 | |||||
Debt issued | € | € 20 | |||||
French term loans due July 2021 | Unsecured Debt | Maximum | ||||||
Debt Disclosure [Line Items] | ||||||
Interest rate | 0.70% | |||||
French term loans due October 2021 | Unsecured Debt | ||||||
Debt Disclosure [Line Items] | ||||||
Debt issued | € | € 20 | |||||
Interest rate | 1.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Apr. 30, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding letters of credit and bank guarantees | $ 14.4 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Common Shares Used in Calculating Basic and Diluted Net Income (Loss) Per Common Share (Details) - shares shares in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted-average common shares outstanding (in shares) | 75.9 | 66 |
Dilutive effect of restricted stock awards (in shares) | 0 | 0 |
Weighted-average diluted common shares (in shares) | 75.9 | 66 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted stock units, restricted stock and stock options (in shares) | 1.2 | 0 |
Restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive restricted stock units, restricted stock and stock options (in shares) | 0.2 | 2.6 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - Common Class A - shares shares in Millions | Apr. 30, 2022 | May 01, 2021 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Unvested restricted stock and restricted stock units (in shares) | 1.4 | 2.6 |
Common stock and unvested shares of restricted stock (in shares) | 77.3 | 71.9 |
ComputerShare | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock and unvested shares of restricted stock (in shares) | 12.7 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Apr. 30, 2022segmentcountrylocation | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 4 |
United States | |
Segment Reporting Information [Line Items] | |
Number of states the entity operates | location | 50 |
Europe | Retail and e-commerce | |
Segment Reporting Information [Line Items] | |
Number of countries in which the entity operates, during the period | country | 6 |
Segment Information - Sales by
Segment Information - Sales by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 1,378.4 | $ 1,276.8 |
Operating loss | (153.7) | (40.8) |
United States | ||
Segment Reporting Information [Line Items] | ||
Net sales | 995.3 | 966.3 |
Operating loss | (144.2) | (3.6) |
Canada | ||
Segment Reporting Information [Line Items] | ||
Net sales | 76.9 | 61.9 |
Operating loss | (1.1) | (2.9) |
Australia | ||
Segment Reporting Information [Line Items] | ||
Net sales | 126.7 | 114.8 |
Operating loss | 1.6 | (0.4) |
Europe | ||
Segment Reporting Information [Line Items] | ||
Net sales | 179.5 | 133.8 |
Operating loss | $ (10) | $ (33.9) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income taxes receivable | $ 168.6 | |
Income tax expense | $ 3.5 | $ 1.3 |
Effective tax rate | (2.30%) | (2.00%) |