Today is another very important day for GameStop shareholders. The company has announced their Q1 2021 earnings results and the stock is currently trading lower. Revenues came in at $1.277 billion during the quarter, up 25.1% from the prior year, and earnings-per-share amounted to a loss of 45 cents per diluted share. The company also announced a new CEO and CFO today.
Wall Street analysts expected earnings to come in at a loss of 83 cents per share, with revenues totaling $1.2 billion. The more optimistic earnings whisper number was set at loss of 64 cents per share with revenue expected to come in a bit light at $1.16 billion. GameStop actually beat all of these expectations, so it remains to be seen how the stock will respond as the earnings conference call kicks off within the hour.
Here's a breakdown of some interesting data points from the GameStop Q1 2021 earnings release:
As of May 1, 2021, the Company had $770.8 million in cash and restricted cash, compared to $583.9 million in cash and restricted cash in the prior year. The Company had no borrowings under its asset-based revolving credit facility and no long-term debt.
On April 26, 2021, the Company announced it raised approximately $551.7 million in net proceeds through the issuance of 3.5 million shares of common stock under its “at-the-market” equity offering program, resulting in total shares outstanding of approximately 71.9 million. The Company has used and intends to continue using net proceeds to accelerate GameStop’s transformation as well as for general corporate purposes and further strengthening the balance sheet.
On April 30, 2021, the Company completed its voluntary early redemption of $216.4 million in principal amount of its 10.0% Senior Notes due 2023 on April 30, 2021. This voluntary early redemption covered the entire amount of the outstanding 10.0% Senior Notes, which represented all of the Company’s long-term debt.
GameStop is continuing to suspend guidance at this time; however, it believes total net sales is the most appropriate metric to evaluate performance at this time. The Company’s second quarter sales trends continue to reflect momentum, with May total sales increasing approximately 27% compared to last year.
- Hardware and accessories accounted for 55.1% of sales
- Software totaled 31.2% of sales
- Collectibles were 13.7% of sales
- Net cash flows from operating improved from the prior year to an outflow of $66.8 million (outflow of $165.7 million in 2020)
- On May 26, 2021, we received a request from the Staff of the SEC for the voluntary production of documents and information concerning a SEC investigation into the trading activity in our securities and the securities of other companies. We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC Staff regarding this matter. This inquiry is not expected to adversely impact us.
Listen to the GameStop (GME) Q1 2021 Earnings Call here
You can listen to the GameStop (GME) Q1 2021 Earnings Call today at 2 p.m. PT/5 p.m. ET on the Shacknews Twitch channel, as we will be streaming the entire conference call live. If you don’t feel like going over to Twitch, you can also watch/listen to the broadcast using the video embed above.
Find out more information about GameStop's Q1 2021 earnings on their investor relations website:
With a new C suite and actual earnings momentum, it seems like GameStop is here to stay. The company also has no long-term debt, removing one of the largest going concerns clouding its future. This is a truly amazing turnaround for a stock that was struggling to trade above $2/share just last year.
Captain Business posted a new article, GameStop (GME) stock Q1 2021 earnings results show better than expected loss, 25% sales growth
Yes, my one share is now up a little bit!