GameStop Provides Business Update Related to COVID-19
The Company is taking the following actions in response to the COVID-19 pandemic:
- A temporary base salary reduction of 50% for
George Sherman, Chief Executive Officer, 30% for Jim Bell, Chief Financial Officer and the remainder of the executive leadership team.
- The Board of Directors has temporarily reduced cash compensation to directors by 50%.
- Other actions include:
April 26th, certain other employees across the Company’s worldwide operating units will receive temporarily reduced pay of between 10% and 30%.
- Offered certain of the Company’s corporate support staff the option to either a temporary furlough or reduced workweek / reduced pay program.
- Reduced inventory receipts to match demand with a focus on key hardware, software and accessories products.
- Lowered capital spending to focus on mandatory maintenance or near-term high value strategic projects.
- Due to the impact of governmental regulations and certain landlord decisions to close properties, the Company did not make a portion of certain lease payments and remains in discussions with its landlords regarding ongoing rent payments, including potential abatement, deferral and or restructuring of future rents during this period of COVID-19 related closure.
The Company announced today the following updates to its global store operations:
- Approximately one-third of
U.S.stores locations remain closed, with two-thirds of stores closed to customers but available for curbside pick-up.
- The Company has begun the process of re-opening stores in
Italy, Germany, Austriaand the states of South Carolinaand Georgiaand is preparing for the potential to re-open in other operating countries and states in the coming weeks.
- All stores in
Australiaremain open for business with strong results continuing with approximately 24% comparable store sales for the nine weeks ended April 4, 2020.
Sales Update 1
The Company’s comparable store sales for the nine-week period ended
- In the fiscal March period ended
March 21, 2020, the date when the Company closed its stores to customer access, comparable U.S.store sales grew approximately 3% as the Company experienced a surge in demand across products that people need to work, learn or play from home.
- For the five-week fiscal March period,
Australiaposted comparable store sales increase of approximately 64%.
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Notes: (1) All references to sales within this release are calculated based on the company’s internal data, which the company uses to estimate revenue performance on a daily or weekly interval. Sales growth percentages represent the amount of absolute sales recovered relative the company’s planned sales volumes during this period. Due to the adoption of the temporary operating model and closure of some stores, changes are based on absolute sales dollar changes and are not presented in accordance with the company’s comparable sales definition. The sales percentages in this release are estimated, unaudited and subject to the closing of the fiscal quarter ending
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information, including expectations as to future operating profit improvement. Such statements include without limitation those about the Company’s expectations for fiscal 2020, future financial and operating results, projections, expectations and other statements that are not historical facts. All statements regarding targeted and expected benefits of our transformation, capital allocation, profit improvement and cost-savings initiatives, and expected fiscal 2020 results, are forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those reflected or described in the forward-looking statements: the uncertain impact, effects and results of pursuit of operating, strategic, financial and structural initiatives, including the Reboot strategic plan; volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital and credit; the impact of the COVID-19 outbreak on capital markets and our business; our inability to obtain sufficient quantities of product to meet consumer demand, including due to supply chain disruptions on account of trade restrictions, political instability, COVID-19, labor disturbances and product recalls; the timing of release and consumer demand for new and pre-owned products; our ability to continue to expand, and successfully open and operate new stores for our collectibles business; risks associated with achievement of anticipated financial and operating results from acquisitions; our ability to sustain and grow our console digital video game sales; our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve; our ability to assess and implement technologies in support of our omnichannel capabilities; the impact of goodwill and intangible asset impairments; cost reduction initiatives, including store closing costs; risks related to changes in, and our continued retention of, executives and other key personnel and our ability to attract and retain qualified employees in all areas of the organization; changes in consumer preferences and economic conditions; increased operating costs, including wages; disruptions to our information technology systems including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; risks associated with international operations; increased competition and changing technology in the video game industry; changes in domestic or foreign laws and regulations that reduce consumer demand for, or increase prices of, our products or otherwise adversely affect our business; our effective tax rate and the factors affecting our effective tax rate, including changes in international, federal or state tax, trade and other laws and regulations; the costs and outcomes of legal proceedings and tax audits; our use of proceeds from the sale of our Spring Mobile business; and unexpected changes in the assumptions underlying our outlook for fiscal 2020. Additional factors that could cause our results to differ materially from those reflected or described in the forward-looking statements can be found in
Source: GameStop Corporation