GameStop Corp. (NYSE:GME) reported a wider-than-expected loss for its second quarter, while sales also missed estimates.
The company, out of Grapevine, Texas, reported net sales were $942 million, down 26.7% from the fiscal 2019 second quarter reflecting:
the impact of operating during the last few months of the seven-year-long current generation console cycle and the subsequent limited availability of hardware and accessories;
A 13% reduction in total store operating days due to temporary store closures driven by the global COVID-19 pandemic; and a 10% reduction in the store base, as part of the Company’s de-densification strategy, partially offset by almost 40% of closed store sales recaptured through the transfer to neighboring locations and online, leading to improved cash flow.
The company reported a net loss of ($111.3) million, or ($1.71) per diluted share, including approximately $2.7 million in incremental costs associated with safety materials and equipment to ensure the safety of our customers and associates, compared to net loss of ($415.3) million, or loss per share of ($4.15) per diluted share in the prior year second quarter.
CEO George Sherman, said, "The second quarter saw strong progress toward our strategic initiatives, fueling an 800% increase in global E-commerce sales, a $133.7 million reduction in SG&A and a significant improvement in our balance sheet with $735.1 million in cash at quarter-end and a 50% reduction in inventory, as compared to the second quarter last year.
"These achievements combined drove $181.9 million in free cash flow for the quarter."
GME shares dipped $1.09, or 14.9%, to $6.25.
