GameStop Corp. (NYSE: GME) announced financial results for the first quarter that ended May 2nd, 2020. Net sales for the quarter amounted to USG 1.021 Billion as comparable store sales fell 17% excluding store closures due to COVID-19. Ecommerce sales for the first quarter increased 519% . The company closed the quarter with USD 570 Million in cash.
George Sherman, GameStop’s chief executive officer said, “During this unprecedented time, our priority is focused on ensuring the safety and well-being of our employees, customers and business partners as we continue the process of opening our stores as restrictions are lifted, in our ongoing effort to meet our customers’ needs. We are proud of our team’s ability to quickly adapt to meet the increased demand for our product offerings. As the pandemic spread, we leaned in on our upgraded omni-channel capabilities to fulfill customer orders through curbside pick-up where available, we reduced discretionary spending and enhanced our liquidity while continuing to advance our strategic priorities. While we delivered a loss for the quarter in total, our performance included total sales just shy of our original expectations, even as stores closed due to the COVID-19 pandemic and key video game titles shifted to the second and third quarters, exacerbating the headwind from operating in the final stage of a console cycle. Even more impressive is that our e-commerce sales grew 519% in the first quarter and over 1,000% during the six weeks that our store base temporarily closed to customer access. We believe this reflects the loyalty of the GameStop customer and the confidence they place in us as their preferred place to shop.”
Mr. Sherman, continued, “Importantly, we continued to make progress on our strategic initiatives. We continued to optimize the core business operation and maintained financial strength and flexibility, recording a 43% decline in inventory and a 54% decrease in accounts payable compared to last year. Additionally, we saw significant progress towards building a frictionless digital ecosystem as evidenced by our successful omni-channel activities, including improved fulfillment capabilities as we utilized our stores as distribution centers and for curbside pick-up, which in most cases supported same day delivery to the customer.”
Mr. Sherman, concluded, “As we begin the second quarter, we are cautiously and prudently navigating the near-term, as we are operating in the last few months of the current generation console cycle and believe we have experienced a pull forward in demand for end-of-life inventory given a surge in gaming product demand following the global stay-at-home orders. That said, we believe the performance we achieved despite multiple headwinds is further evidence of the power of GameStop and the advantages that we possess driven by our global footprint, knowledgeable sales associates and strong loyalty base. We believe these attributes along with our intense focus on expense and working capital management have us poised to capitalize on the hardware and software sales growth expected as several new software titles and next generation consoles are introduced later this year.”