GameStop (GME) 29 Nov 182018 Q3 Earnings call transcript

Thank you, and welcome to GameStop's Third Quarter Fiscal 2018 Earnings Conference Call. This conference call will include forward-looking statements which are subject to various risk and uncertainties that could cause actual results to differ materially from expectations. Any such statements should be considered in conjunction with Cautionary Statements and Safe Harbor statement in the earnings release and risk factors discussed in reports filed with the SEC. GameStop assumes no obligation to update any of these forward-looking statements or information. A reconciliation and other information regarding non-GAAP financial measures discussed on the call can be found in the Company's earnings release issued earlier today, as well as in the Investors section of the Company's website.

turn Kim. over to Interim the like Shane CEO, I'd the to call Company's Now ahead, go Please sir.

everyone afternoon. you Thank for joining us this

discuss the several detailed the for turn initiatives it I review results, we're working to of thoughts our to year. then take remainder that our the we I'll and on and time few share outlook Rob want business quarter holiday over and on some of a Before to QX for more

be available have. will answer any Following may we Rob's to questions you comments,

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our Good I'll and our you to time of the quarter the through third afternoon, everyone. share Thank this then with you year. walk take Shane. you, results thoughts on remainder

know, launches looking the the back title of the you been across anticipation franchises. around to strong given half XXXX marquee several line As forward we've up and

for also we a share to per hardware, drove $XXX.X title accessories, million key the $XX in to sustained performance adjusted market software incurred collectibles XX% diluted impairment the delivered digital. the delivered quarter, share per share $X.XX non-operating, goodwill was of quarter Overall earnings the an primarily strong double-digit $XX.X that quarter, charge we to perspective, increase detail million price we million a and operating $X.XX From decline adjusted from October the in asset compared third fiscal basis, earnings intangible sales double-digit in triggered value. we during position across a quarter our X%, and delivered games. Company's go growth launches non-cash leading the XXXX more growth the and the on I'll as that demonstrates which authority an by of video last and increased categories nearly diluted in third into in of but related EPS shortly, year. For

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business declined Our XX.X% the quarter. pre-owned in

in up demand and growth customers offered in hardware meaningfully hardware pre-owned growth to overall to apparel. access digital including by in a reflective XXXX adoption, software and pre-owned levels, including a the of $XXX.X of Switch titles for in driven year-over-year continues physical grew portion We million software, experienced the to Vinyls face business grew sales. in digital smaller weakening Pop the our fewer and with although and quarter continued We title quarter. affect to Switch see the toys, collectibles in category. older sales software by which pre-owned the pre-owned decline XX% make promotions of fewer the We to declines inventory launches earlier

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increased both For gross and collectibles, sales we profit dollars.

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$XXX.X to SG&A; Now quarter total comparable $XXX.X third moving in the last was year. million to SG&A million

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remains of net were closed two around quarter very We the following X,XXX share, of the $X.XX of XXX. earnings stores in the Third overall we $X.XX our ending quarter and stores net with Mac compared a the impairment with X,XXX X,XXX one with impact diluted portfolio Simply the video closed healthy, per to made portfolio period. and prior stores, in during excluding We quarter closed to the ending world a quarter the adjusted store XX we our game the internationally; ending XX. ending game as we X year quarter: AT&T the charges, store, video opened with collectible stores, changes U.S.

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fourth and are sales than more sales hardware given overall our as November. what we are reducing planned, initially in as year and our that we quarter However, strong expected outlook will given skew the full performance not margin had expectation saw we toward

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Bank Instructions] from of our first with question take [Operator We'll Curtis America. Nagle

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still you're is still technically stay you So completed, when Spring because review, strategic of - market? out prevented the would still you or in are

We would to that change material we'll the our of point and information. results of the would complete, which strategic is able inside stay review market of possession that process be at out report the then until

you be? that have could any Do timeline when

No.

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next from Telsey Fernandez our Cristina with Advisory question take We'll Group.

PowerUp levels? Is to give I seeing down could to revamp bit. a on a Feldman any change up about little maybe Is in bit, little still? it membership are going a talk you come you that. the update And going also, Rewards. Joe that. it some on. the I could actually Wanted doing It's ask guys hoping little program to membership are know was about first you you work

research about time, June were timeframe the of the overall PowerUp experience understanding GameStop. we've the and when but back on, experience lot Yes, spring what in marketing grown Rewards, of Rewards segmentation reenvision just go of Overall, of as very in would at drive stores, that the lot talked gotten we this lot We've the as customer in has to we customers in working overall analysis Inside the customers market can PowerUp and out on year. customer a and inside we space expect experience around the for of that us have going program hard better how customer customer all with a a of firms that. that of not it to be studies, an has activity program we a value on we've activity helping shopping now forward. got our behaviors, the do lot we've road, our done are

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quarter has fourth the why changed. is Which

thank season. and else, somebody to Okay, good I’ll it Holiday you, with pass the luck

We'll question take Jefferies. our next with Stephanie Wissink from

this Hi, is our taking on for Ashley for Thanks question. Steph.

business to time? the merch, should and eSports regarding about know So think collectibles want penetration gross we we your and over of the the sustainability mix how

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growth unique past, we we for products the the those get and we As where exclusive thing that get see and how exclusive to drives that for we when us the don't can we case said in differentiation market products, be or those in is first can things.

And then any feedback eSports from takes or tests? the initial

I'm what? sorry, from

testing From eSports… the

to Not report yet. much

take Anthony question next from Capital our Chukumba We'll Markets. Loop with

I question one and up. had one follow

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say would CEO and any of terms minutes - update few difficulties first had my quick begun. search? the in if call, and apologies about follow-up a in called minutes after you just then you technical talked some had I few your of in the I And But

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our Ben Schachter Instructions] Macquarie. question We'll from with take [Operator next

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quick Rob, just you. a couple ones of for

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pleased Red very We're with Dead.

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one, can hardware? And you remind between then and hardware for margins the just me difference new versus last used

within handful points They're very other, of each a of close.

turn Kim, for to like Shane no would there the remarks. I closing you. in questions Thank are time At CEO, back call further the over queue. to Interim this

I'd Thank we very like to the your continuing to you progress for in to time on much. today, you our and thank everybody future. update again look forward

you. Ladies this and teleconference. concludes Thank today's gentlemen

You may now disconnect.