GameStop (GME) 9 Jun 202020 Q1 Earnings call transcript

Greetings, welcome to the GameStop First Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, Eric Cerny, Investor Relations.

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cause welcome in conference and well updates on which first be fiscal statement Sherman; that of quarter any our detail George subject strategic from call can with on differ Thank Any earnings risk expectations. factors update This discussed to call earnings such conjunction could uncertainties and with will call. section Bell. various the be discussed statements, more these results the and for into results today will the earnings our found website. insights our obligation provide measures your framework and call, fiscal statements share performance XXXX With release of financial GameStop to to materially Safe considered first you, take Financial Harbor should risks GameStop’s GameStop’s, no Chief actual include the On reports George we’ll and questions. the regarding today, are or Jim Officer, then call release as open today’s Chief Executive reconciliation filed the statements Then, the for cautionary statement SEC. assumes expectations GameStop’s in regarding information. the me other Investors and forward-looking in non-GAAP to the financial Jim future. A will forward-looking as Officer, XXXX. are and and to in issued quarter earlier information

to Sherman. Executive George like would the call to company’s I turn Chief over Now, the Officer,

first joining quarter for thank our Good earnings on you, afternoon, Eric. Thank and today you everyone call. us

in healthy. we I last So you're hope and much March all truly safe has spoke to that since you and changed

want responders, their the for thoughts We workers, by have on healthcare extend as people and first the the our COVID-XX efforts. Our the all affected providers frontlines. medical of pandemic to are appreciation as well who with been are who

well of a that the the cruelty stores customers solidarity, to during of we been Fayetteville through against each appalling as stand time. endured of as the At priority racial our business markets. and partners of respective unrest closed has unprecedented continues being an those this period and employees, and each social this of underscored injustice in we've act Our be and have in acts our recently, Houston memorial endures Minneapolis, this the country. of services in GameStop, markets injustice More

to quarter regarding response the review how COVID-XX financial start our the a our optimize, Jim For performance an and first results company's transform we're our first for the by overview approaching XXXX. executing we’re like then the to company's briefly and time framework stabilize comments to will provide and business. few Then a I'd of initiatives discuss today, providing quarter outbreak, strategic

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demand planned pickup, category, e-commerce with Switch hardware curbside top well quickly Beyond our fully quarter XXX% our while Canada the during online ability with compared sales global e-commerce stores, surge needs. far limited were the context, a mix most to and demonstrates total of sales XXXX store in well By is in GameStop lower fourth sales and toward The during shy despite final comparable our store the us unable that are New saw Equally representing commerce, but sales our perform for expectations team's orders. decline sales pleased to software of comp for our expectations. also the new levels that and staffing either Nintendo operations, generally Across Zealand improvement the to for remained global in just expectations, initiative of QX. adapt fulfill content XX%. and sales distribution in that fleet for customers the to and Europe, build roughly continues XX%, shift ecosystem and maintain digital sales of as encouraged disruption, global our encouraging our a was frictionless our and leaving hardware centers ability the we’re In orders destination U.S., at a to volume only XX% their opened original demand and last included we down which rose our to our home above quarter largely increasing our comp comes stores six quarter. effectively the closed weeks were retain stores to a managed the sequential in closed, we’re our Australia, or I margin, for a from of of stay year. delivered limited number exceeding to at giving strategic of our quarter significant titles gaming

with limited than hardware chain in not production position believe in last resulting ramp-up With we in the e-commerce a sold stores, retailer manufacturers demand few for who a a into able the are customers fact, to first other to and console the a quarter Nintendo leverage hardware end we months of cycle, software the category. given globally at consoles in entrants OEM the more In the perspective, weak supply demand From in business or a seven-year console Switch from expected any category we competitive unique slate title gaming buy-sell-trade quarter. new advantage for cycle. supplement we’re our decline in surge to to the

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has For customers into those The increased great title new launch, title good exceeding strong experienced and far entertainment did expectations. options. we that for gaming growth titles release turned releases entertainment as seek releases our demand

focus of to expense reduction SG&A we efforts in SG&A, on cost our we XX% continue year-over-year. pressures additional stores, long-term despite and by adjusted terms closed reduced the In de-leveraging

$XX includes related the million paying to an additional two related impact SG&A of incremental decision of adjusted burden we store hourly closures. including ease eligible of for our of costs or paid our pay COVID-XX mandated incurred, to time-off support weeks some Importantly, the base by pandemic over those associate of our the

a by effectiveness the customers. reach progress GameStop of on across quarter share strong our the and our pillars. building efficiency with and I’ll to core saw the strategic Importantly, in pillars frictionless you business improving Today, priorities. optimize we four organization, focus ecosystem digital Typically,

the saw the relates progress. first to core, As optimizing financial quarter significant it

all working executing cash a and We the inventory maintaining payable, in capital, a at XX% XX% continue quarter-end, in reduction to $XXX the quarter. end deliver greatly to accounts million on decline of at improve while our goal in

sales recapture a Regarding our of which fulfillment improved to advanced to pickup we the quarter. by build efforts led ecosystem, initiative for this curbside open frictionless who capabilities, digital limited our the leveraging during stores

last Total customers, sales to to surge closures the XX% sales store versus over sales in grew over our the growth XXXX% we quarter following of XXX% weeks for year-over-your saw total weeks the e-commerce company to period. some During e-commerce during and entire year.

closed. of quarter, As were the we global that reopening phase enter the begun second stores temporarily we've

world of limited of today, recent either around safe, we’re States. obviously stores pick-up, reopened several nearly As on by unrest that And impacted associates the been our for social the the curbside in customers. access to we safety United continue XX% focus have and we the have customer to

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to with pleased reopen. third-party our finding being shown we’re part continue they published our stores relatively experience initiatives, interacting of to omnichannel end, generation like the ramp all a we the back evolve before appointed for are benefited retail While new perspectives to gaming the our We're to execute analyzing and of us enjoyable next to has joined performance as three To experience in indices the appointments as with our board locations evolving expectations. far this guidelines equation. three members to we reopen an safe these feel there's Directors company's quarter. create our ramp for and Customers of later that the early from GameStop’s launches and navigate company represent stores return of and need as weeks to to to reopening and with locations, so strategic expertise a to a mobility already getting these our our value correlation maximize I'd some of four These stores welcome customer. transformation, ability and console comfortable of all traffic follow the prepare success. build milestone associates. only CDC continued our whom to to creation is the reopen out, We as know business published strategy to that we We’ve the have strictly sales local our and the during and on also environments, long-term newly the important associated year. in to board, continue

implementing fully several new able to competitive confident the I'm over better like are and more and future. share We capitalize Jim, the year. us make GameStop on I'd Before why cycle turning console bright efficient possess call a initiatives unique advantages to to later and developing has to that this

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improvement stabilize. we such, as As expect drive sales to margin

the navigate release, adjusted expect to deliver strategy. and press strongly we’re and our current we fifth, environment our in challenges to macro the in XXXX, mentioned have positive As invest in EBITDA capitalized liquidity

the expect and our So while improved we to expect the progress make we strategic half the also in to faced deliver challenges performance pillars during we second QX, QX continue in into of year. more

Now Jim to response me to in more call to financials COVID-XX turn let in the discuss detail. over our

everyone. through this like Good XXXX I'd results. then of to quarter first how Thank afternoon, approaching George. some the take fiscal into walk our to insights remainder you, year. share you time we're the I'll

but As to March, of number George approximately all stores. such pickup international we leveraging online omnichannel And temporarily customers priority any close and XX% U.S. closed capabilities. associates, in one in-store X,XXX conduct we buy safety of X,XXX a discussed, did locations, our pick during limited of the XX, access, curbside the is and company’s communities ship-from-store closed On COVID-XX and offering our health pandemic. were of our two-thirds direct our up customer March temporarily which the just as

quarter, remainder was customers. the our global business XX% During to Despite around in reflected first impact Unit store opened elements primary from home surge a of which in remained and Australian accessible first, approximately our gaming of three the primarily work the fully of QX fleet and the closures Business world, the products.

increased product exclude for during quarter. customer ability its light, limited that that In teams results to Secondly, of fiscal quickly two our the the longer to these the deep a loyal delivered stores engagement contiguous quarter, Consistent with for store the other sales demand, and with decline our face-to-face despite than omnichannel customers. weeks around of closed finally, global the the first base, GameStop’s we to meet the meet ability were adapt XX%. comp of power with retailers, world

X%. pandemic a comp peak we March closures Importantly, for sales approximately of realized of during and decline global was despite these limited May, comp a the In sales decline operations of decline and XX.X%. the X.X% weeks, April our of month fiscal fiscal was

in so see of represented the store closures this can contrast year last related you we our by the across year, the believe to far the decline As regions. of pandemic is fiscal quarter fourth sales operating predominance all

from to the $X.XX The billion decline billion XX% prior-year to declined foreign sales closed stores sales fully remaining percentage of attributed to approximately the quarter, total points the the stores impact almost COVID-XX reported back XX%, and store permanently sales Turning XX% headwinds. closed period. consolidated and decline $X.XX global of attributable to four first comp overall the was related from in exchange

exit As a closures efforts businesses. either dedensify ongoing reminder, result geographies our permanent unprofitable these a or are store of to certain

continue completion by the and the from profit end sales July. to strong are region track see down the dedensification for wind the rates We on and transfer of strategy of Nordics

in to for Switch perform very the closures. year. in decline vast the last attributable full QX, showing first sales a quarter well In overall compared hardware to with category, to of terms was of category store XX.X% accessories declined the which the increase the Despite Nintendo material quarter continues majority performance, and

product Crossing, quarter, larger Software, for a Basket a particularly margin And There and each first sales builders XX% reflecting catalog their due of collectibles including Final approximately gross customer's of to margin level quarter, as storefronts. few access in-store. launched Animal VII the a product standpoint, the hardware and be the titles our approximately sales, with as such, much sales Maternal, of software inability pre-owned to categories compared collectibles both software as Market representing tend plans. the well year. and last Doom as XX% declined only XX% declined which penetration were that new in our exceeded far Fantasy all From mix to to

global first overall year. our XXX fiscal the XX.X% from result, last margins software a led were the a contraction XX.X% basis As more gross or in quarter point

improvement expenses adjusting expenses versus our and SG&A million, year. $X.X reboot expense or roughly quarter approximately reflecting our million roughly $XXX.X were of first to XX% transformation, in for initiative, After with severance GameStop objectives. other turning profit associated Now and management last million charges decline a our $XX.X the

we for Importantly, over these to adjust results million not one-time of COVID-XX. in quarter related $XX made the just do investments

with associates. approximately time-off $XX.X our pay was to if of weeks two which of two of first paid The to pay associated decision our weeks of an million or incremental wages hourly eligible, additional additional

the as related Secondly, safety the our million We over of $X and and ensure first our the we of products to stores return operations to of invested quarter back in customers. distribution associates centers. future and safety just do sanitary and some to more quarters come equipment normalized we in our anticipate SG&A reductions in

efforts reduction significant structure cost our directly portion to a However, aggressively business. the is to overall also the related ongoing the of of rationalize

severance million pandemic, loss, other the $XX.X our million million and of to As on store quarter. of operating of a first compared transformation, realized we prior-year result worldwide compared million operating income operating operations, was the COVID-XX prior-year $XX.X $XX.X Adjusted an income the the of loss in $XXX operating quarter. the excluding in impact first to the charges

again we Importantly, ago. quarter $XX in adjust for the do over mentioned not million a made investments these minute the of that I results one-time

which the million our effective for assets mix and to the quarter $XX rate items on across negative deferred by discrete tax in primarily allowance earnings a was Our we tax reported jurisdictions impacted related was XX.X% tax as the valuation first certain and of operate.

our charge costs $X.X share includes $X.XX associated excluding the this a was compared Excluding per income income our charge rate to diluted share prior-year effective or $XX $XXX.X $XX $X.XX million in million tax million the loss net is adjusted a of non-cash transformation, Again, or COVID-XX for earnings of of incremental mentioned net $XX $X.XX in net charges per the related XX first of reported tax with before. basis, loss million quarter. loss severance $X.X net the the $XXX.X the the per quarter was a loss adjusted non-cash or GameStop million tax diluted diluted compared or in share, Adjusted net loss On of not to was which of and diluted impact X.X%. adjustment reboot the million quarter, million other share. for $X adjusted per

focus store During our dedensifying to optimizing continue the and quarter, certain global first strategically on we fleet markets.

total quarter XXX we net For closed stores. a of the

As or stores. we roughly in told strategic you to compared market to of XXXX, in a March, in expect result similar we our as number optimization closures efforts XXXX XXX store

rates closures. transfer and continue positive the sales that additional upwards to XXX given see, However, roughly estimate we’re by profit we revising

had the $XXX.X $XXX fiscal and revolver. we we stronger sheet, of million Now given cash of the quarter, June on at relatively turning $XX million million performance of down balance to Subsequently, million $XXX end X. to had total as the business, outstanding paid of the revolver first the including drawn the

at to quarter down payable $XXX.X a orders from the to reduced million at flexible end onset total of world our in XXXX which ability at flows. related were directly reflecting liability accounts creating reduction, ended Our XX% the is of and the or quarter the the a fiscal leverage quarter of pandemic, business first very first the end We purchase of chain the of of $XXX supply inventory around period, $X.XX the $XXX.X a drag viral thus on on to the reduction billion compared prior-year million not the with a XX%. cash million,

said, and efficiency including working our strong driver the a is capital in all a significant payable XX% and efficient further turns making cycle continued and have while of in of inventory key improvement the total and specifically reflected continues in cash financial equivalents. generation flexibility the effective We're industry, the and accessories improved working the investments sheet potential and be decline the efficacy. to progress us consistent the with management, retail titles Due on for inventory providing This we're regards upcoming is to inventory and meaning continue maintaining of to forward we quarter. software area and liquidity to balance As ongoing a well our XX% to which to is and the pleased cash as in million fourth necessary and us new key the as to the the respectively impacts current working is guidance. of focus of very capital position upcoming on crisis, continues consoles disciplined manifest manage inventory new over of the $XXX as third accounts inventory, support with itself inventory cash management in COVID-XX we in improvement and in the environment across the both capital, the associated conversion of suspend

believe efforts long-term. the will the maintain do sheet continue for we balance to that However, our of our strength

As in our we the that, an end of million second million total range cash be indication reflecting roughly flat flow the of quarter, fiscal at equivalents from expect of to positive operations. to to $XXX $XXX and the cash

are flexibility notes, continue as extending the by million focus As a with significant capital our we continue other keeping last we Xth, further now financial commencement we notes of the to $X.X million $XXX.X spent of expenditures. maintaining of $XX of holders the first the goals had is offering approximately roughly we high million our to a advancing of X, balance or and sale efficiently offer sheet $XX $XXX.X are we strong on completed XXXX. jet exchange corporate validly fiscal June certain intended we note May of an year, of notes to to June that capital to XXXX. and the healthy important to tendered million This on the the focus projects replacing our long-term expect value to quarter, in In sheet. of work our provide maintain balance and maturity end of outstanding the objectives on Further remaining and to to It's due maintenance for on with quarter our spending to balance week even of X, the invest X.XX% us existing in and which our mandatory business. the have real balance lowered reduction strong the sheet strategic objectives. that in announced assets the CapEx of certain property near-term from In the senior monetize strategy of a had on million

as before, As guidance generally I result impact the our mentioned of on have business. suspended we COVID-XX a

title organization operator we console important remain expectations any on it's for expected addition all year sales our questions our note peak for providing focused financial things the result positive and all However, streamlined, that an XXXX expectations us will do growth and to to turn actions fiscal earlier, now the by to and profit over to launch. during and current the performance progress late of against to and that we'll that you confident launch for call the as two half this console both including the improvement the the quarter reboot experienced efficient, continuing the our trying further time. three capitalize of we software key the take second to architecture, a pandemic, will We in to levers led trajectory, that cash slate back the one, overall our our expected three that objectives in I and the is believe year. intensely key remain poised Generation navigate robust generate have. contribute EBITDA the on unusual We that support through to X may flow adjusted new GameStop significant expense strengthen in execute will I shared profit is

from Please with Wissink Instructions] first At this is from session. Jefferies. proceed a we question. our time, your be will conducting question-and-answer question [Operator And Steph

two bigger if picture afternoon, a I Jim then housekeeping for have questions Thank I Good and could. gentlemen. question, you quick you. George

wondering seeing give what statistic can mentioned renewal the transfer in just us you a The us quick over and then on you remind can for your if And update value? of the percentages rates are foreclosures up you're first transfer leases I’m you the next script, what months? just in XX

primarily two average The Steph. the U.S. in hi, remains Yes, lease here years. around

XX-month obviously to going the say fleet a that of general, in perspective. in it period, from about And legal So how we're half that's tracks. would kind that turn over

second the rates we've seeing a But not transfer pragmatically actually sufficed that on. one, planned say published bit something we little is it's On stronger had, than I publicly. even actually think the that to rate we're really early

And better so the of by seeing terms accelerated expectations, XXX so than we've bit of than where a that's why closures that, little some about numbers we're in our our were. original expectations

My is, of helpful. of for result script question, something of that's me, by inspired struck in the Okay, George is really you was the gaming that you this in pandemic the the said interest or which a pandemic. kind that idea maybe renewed

I'm your Were into And that with the now sharing does and in if to can become these seeing database. that population play little what a returned revenue you customer right the once how finding of about gamers, you're gamers negotiations new regarding curious partnerships? gamers? are a that OEMs talk bit customers have is So this having you're were you your

early Steph for question. we mean, on closures when began. this store I thanks Yes, the saw the

of So showed up really and of in of predominantly. it into the sales form the hardware March last couple kind really of weeks April, going

large was then And timeframe we than think better smaller that as certainly that really well. like in And on Animal that's mentioned Crossing. launched games game basis perform much I expected. any did better scale this

saw, that in devices toward has And console we customer of the ahead looking know in And hardware interest. purchasing November. next consoles a is and new core our lot since we of cycle. lot long a bought obviously saw generation late second we the So

to that gaming is predominantly. in return So certain new don't we're we we saw have addresses gaming, new new reason it net we as net interest. to net think us that for and And up loyalty that come that a e-mail of any gamers believe shows it's in, terms

So mean, benefit overall I share. from to that given the anytime bigger, pie truly that, beneficial we it's us. our market gets

look So road. our yes you looking can know we And social new into interaction get them these and can our is hope that we that with into build as partners deeper have be something means, close well. as all and maintain new certainly start parlay deeper the would conversations to we gaming contact, them down customers, consoles forward with by that

very, And we're a commodity then still, as very, no in well. yes, XX world of which mean we device. sell largest was said, the viable sellers the course I switch, doubt. the did pretty them think out get end and of very very cycle. So hours. hardware them And in, we we scarce And that of in amazingly is we

So still gamers. which new largely is big demand we attributable think to in

Thank you.

please Stochel And your question Consumer Ray proceed from from our is next with Edge Research, question.

the for thanks your than hit that seeing to making fulfilled you're your drive much Great, that of taking as all going that you're update expectations? lot itself then able closures you've platform far you've that billion us a store On with success I'm you to an dollar but seen, are your result? earlier that sure my question. changes demands give to to expected and e-commerce, growth due target And had the a to is as as what just omnichannel, to can results you or be e-commerce incremental

first fire the all, in is right it it's is I experienced. of direction obviously to going Ray growth Yes, mean a thanks, help step that pretty us, rapid we

So up some the XXX made again, XXXX% process and means, improvements. those By all for over over peak periods we've quarter.

begins all the Chief it think of hiring I with Digital Officer.

supply ripple versus much DCs applies seven-day flows it a one to hard. been ground as distribution number were We've a a that this. week through this held the effect fulfillment e-commerce. our been pillars centers. It's going is stores put the frictionless process, had growth on mean, of digital back how stake it's has now after changed in strategy. of amount to our operation the pretty a we chain freight obviously It's from We've improving We four in ecosystem. of one I on a So in our things.

So it's been great growth.

I Of mean right to unnatural, our mean, been in really question a hurry. with course unfortunate it it But of began I in the sure point, inflection no you're right. closure but that there's the business drove and degree a a stores. of direction has lot certain an it

because lot I’d relative to of of business the channel the importantly, that the driven pick growth important, by so e-commerce gives us as or we a and online, health those in just itself And those the day we works in because up color what true to we continue to and vast was omnichannel, and both add the not omnichannel in-store function But picked entirety efficiency buy it's are a up stores, the of point the majority to brick-and-mortar we'll same the operates some e-commerce, of how but that, the the that more it see that's is next ordering. continued omnichannel how And open collectively. important with ship-from-store. a continue importantly, driven saw But in by e-commerce is balance orders day. locations. of

Jim of pick mean of with in-store build-off couldn't I’d buy up and without ability capability. our to e-commerce capability. off Yes, our we directly online said, built done have I what this it delivery contact was curbside

flow As the I of would more we it to mentioned, hold and stores through generally freight our there.

terms in a ship big us of driving store fulfillment on So channel from was for omnichannel. early

assets, another. one the of So it off leveraging really these was all fungibility of

then a and you, thank inventory. on follow-up pre-owned it, Got

seen lack to as keep strong trending? about So points far as your rewards are Is money points rewards So you there that wrong have trade inventory rewards of pre-owned then are and points. where a way well, year-over-year about. sort down those you’re that to in falling you're seeing the you've heading think people for total is some buying of products, hardware other things where or to guys talked you are think with be into sort substantially new any And as a to customer in situation you the it, as of of as way holiday system the about going of so sort buy well perspective? demand the doing with perspective demand

Jim. is this hi Yes,

we in that been our manage as that pre-owned of out and on efficiencies from myself more Chief work in our not inventory about will cycle. area with teams inventory. overall conversion perspective, of and inventory has Merchant how I'll terms think creating extensively, turn First cash all, just Homeister, but pre-owned management, comment our globally I new an and the an Chris This well

So loyalty it. right way you that's and engagement discuss isn't think products, the with that way two to with in to the that respect points certainly about program one, the the our

fact, last In we file. particular, we in months of tend we can it, is mentioned these be the what the to see with are, the these terms in what George this saw from surge entrants in new what of entrants at really least into new couple several here

our which capability the So the opportunity on in gave that new supplement in we actually lot people lean -- to when a there be for And of us we not scarcity that we in pre-owned think hardware, system. scarce, buy-sell-trade think new is that's product when the important. is pre-owned we product the able have, again, the to able have were

Got it, thanks again.

You bet.

from And of our proceed Curtis Please America. from next Nagle with question. is question your Bank

Good afternoon. Thanks taking the for question.

excluding number number that case, you performance X% down all-in any clarification the a And the could is just comp. comp? that one, on within comment if category closures on that's and and the what's First May

that more we we're some any and not relative months we May to we're pre giving insight performing the were some some to to of, kind business make, no during providing on make May, information we how want mean which is disclosed, information how that still was not the was how contiguous do into trending on we're not sure just when we provide we to also Yes, that and wanted some and for we two is that give the evolution closed stores, middle than continuing longer of indication that to adjusted, peak wanted out this are the and of the of include obviously, basis. make We're of we're in I weeks it’s stores you say yes, process. opening all-in as the pandemic. we direction

of a in hardware products. coming higher but for of margin Got comment to aren't very as in cycle, then launches, more it, know obviously can positive of just the into for sales terms looking mix And I sales console history, just quarters the given a some I where typically your and of those into less back from maybe at at see the what bit great I are about know positive EBITDA kind least terms don't little hitting dig EBITDA guys year. the in just the understood. wanted follow-up, you

about, expecting how expecting So, cash are are comment? XQ should free think for you in an that given you positive we increase EBITDA flow the in and year

core much this you I this here, working take on Yes, place as that specifically together architecture of launch. year been especially in actually been color the the think management think re-architecting advantage to and activities about console of have George of we're optimizing around and business, some I'll been better the way might the financial comment the has focused a a core to well. our But the have is, in it really team so that I’ve business of we

all sales at much management, think flow to should looking cash you're through look incredibly conversion yield tighter better cycles. And that in through you in ability growth. of terms way lower cycle, all if sits difference inventory at versus don't that GameStop results that's those of things have where through expenses, the I long the prior a of flow the those think actually because have ability important history, George? So to today the we

year look of cycle when feel think I a the the the add, the you're over I'd we of you retailer, so. full felt downside impact as last Yes, or specialty Curtis,

important a to themselves. at You attach where very upside. also our That's play we're different we're, the a where get of That's by benefit It we community, is the to we not intent gaming vendor consoles level. the sell role different.

expect rate would at margin higher this. expect attach we a to games, as certainly would part expect and attach collectibles to attach certainly we of we So certainly would to accessories

No out So traffic. question stores. it's online for event a for the parlay we going about be our it, to both and will traffic

Thanks very much.

you. Thank

Sigman with our your And Credit proceed from from question Please is Suisse. next Seth question.

Hey trends. May guys, thanks to I taking did for the want on question. follow-up that

to very given down store April, numbers in store closing dynamics. I the each in heard that of included different the those just think comps X% down presumably but I XX.X% periods compares So

of help you store So is comp just for can percent us your a versus that base little captured base April? bit here? in May What

mean way very, I it. think Again, very week-to-week. here's Yes, about to the dynamic

really secure access. we When to we of or example, to store sanitary in the form limited market started some say is, amount access open distancing. to, an up we started for So, limited safe mean customers a of limited access, as U.S. is social and what safe and for maintain proper

one dynamic little we it have give evolve any over really today. number. roughly as I and that opening a And are XXX so it’s a stores still can't is continuing to because speak. binary point, we And you

door it's access. binary So answer it weeks, for that a four week Yes, across and at across have open country the you you for one have me all And difficult dimensional, really to have versus for versus really in open delivery question form. limited versus you the three is open closed, rolling world.

script, as XX% world of the So that right across mentioned the in includes open entirety the Europe. virtually now

So practical stores. for purposes, all save five

answer working And it just think one in rolling that a quickly. the in New Milan large around But in suburbs, directly. towards, open. happening Jim is it's Italy that Paris XXX% to too that in but the leaves in said, very, the really nature open. very and I malls Australia, Zealand Europe is U.S. we're France majority the in the area. Canada few it's is as

just But the just the is help to it's flows us four model. I it's clarification, here, model. negative a since really I know to modeling real illustrated really This the okay. But then doesn't follow-up. right. Yes, a that through revenue have flow

growth So revenue of that you time model? the a sense May the what look sort so like period that quarter-to-date, the in of would we can can give in us use

me. of I don't in have it front

to today. So I that prepared talk we're don't think about

okay. Okay,

a EBITDA that little Can come quarter? in confirm pretty It I to help gets want hardware more, my us was a the alone if you is it you all just fourth comments around follow-up does to imply so, year. year-over-year So bit doesn't the real like expected around And there. the significant positive increase. for with that seem

you of sense assumptions kind And there? give of can other what of you. a gives you the confidence? some us Thank So embedded

Yes, we're of not breakout to any a quarterly giving that. contribution again

I'd give as entirety how were indication the of this of year couple year a is to of share software year. number into from postponed we which of many titles, key to the So things, that's last on just third key meant some are in working together. this there quarter, the A view

half. some in pandemic to that due for And there those the the beginning the back to year the originally were of were from year earlier then of slated again, postponed the

whole come collectibles, attachment warranty brings marketplace it that console technology remember, parts to whether those by earlier the with, now And we certainly levels, significant that's quarter. the consoles, series seven moving in the a along a there's George fourth whether launches, so as see series further that excuse in indicated that might the I And the be, comments, new of whether now accessories OEMs. development that it's things it's it technological controllers, as me, expected and the expect But of also which then degree of whole years is hit of entails to of a And here mean well. around launches. whatever there's software some what

Best thanks. luck. of it, Got

you. Thank

Thank you.

from Casella proceed question. is your with please question from next our Carla And JPMorgan,

you seasonality that my base the the Hi, the about expect quarter, and talk how year. you through revolver? how I'm was gave if sure much trend is to liquidity the available if not borrowing of could you question us And of as to it number under the the

is So the inventory high the quarter. function it so follows It's I that, fourth of a that, and Carla the factors an as of don't backed our supported the the revolver, borrowing it's remember and primary base But specifically. seasonality saying security by way works, lending asset AR, that obviously inventory. the

$XXX only speaking. that peak availability of in November, months, million, timeframe, couple the generally revolver you about really but December is that way so if it available the during that And think really

rest million between depending again the $XXX essence, anywhere for And inventory of the the in so $XXX million year and on availability levels.

this so and was XQ pretty was be understand the I expect as wondering of that your are, the just, different, you availability that considerably. season inventory I with but to any COVID you've reduced of disruption year did I give if was And

in mentioned it's there head, that, number it but example, my top of paid the and the it we've just sorry actually we that I my and Yes, don’t borrowed down top in certainly Carla, that. down Q $XXX suffice for have again don't do inventory of about and to $XX off have we have but down But and XXX, just head. we million yes, And about we million available as of levels, say, off revolver, reduced but paid our we about availability. about really I

holding $XXX or of as week we're So about two ago. million a about

them on different one look versus had software this there's going it launches, to margins great. how hardware, business we've since of do And long if hardware at It's historically. then your will been those a a I that's trend you on the year the pre-owned versus because into we new question any as categories your we're launch? if launch, Okay, margins so trend time trends been gross seen margins expect and on

that and of Yes, of as new hardware. months, saw a hardware about so we you so example, again, I you think to have think shift, couple for last saw was lot a

shift to those order with especially come that program. respect new if there really second, And then looking And it, for important we was that you're are was the that so are in the new hardware. to entrants. XXX between that into It's transactions margin fourth the loyalty change the into driver because our come here from the third, year-over-year those about basis of example mix for due primary points entrants example, customers enjoy

talked going least that software, to in and obviously some it but expected than software velocity tend lower ago, basket our rate P And Hardware, part pre-owned at hardware a that of so are say new change to rates rate into third those into continues suffice a the to titles, some perspective be important software. better the new mix mix products market pre-owned business. a in minute that product about hardware. going at be think titles be will key than transactions, are and you an to have you'll And see from the major margin to I will quarter of launches, that if of later about

come a are categories basket. two important attachments in my collectibles the Importantly, when are stores in, And customers as market I generally software comments, and it's mentioned closed because higher that their and are pre-owned don't into margin categories.

in And that that's associates basket the so catalog. in. coming in And customers stores new building and they're with the software market as also you're are the

have the we also the able And then the shift profile of back see when But change don't walk so stores, stores, into margin does customers it the we transaction. when to into that come way. they other back

not do his Yes, door sales. mentioned is mode we at delivery of in sales a the script, see part area think when I Jim catalog in we're COVID, that during especially in

software So back we software tend experience particular the would in getting release case new access and hardware most by to as of be the have sales open the customers to dominated a of sales. shopping to store, stores catalog in depth up this expect different see

no there access the than course, collectibles other was web. Of via to

visibility. a via down curbside, refurb Funko it just release fall we would to new exchanging reemergence Pop our the new we our and we it's a something a now that as So have stores or operation center, of going consoles expect UV our toward new games And a well. as process We've open. hygiene software season expect something off games. from are not of was to going something into standpoint, or do see and to exchanging gaming as now pre-owned through the return business that like we And cleaning closed. hardware putting do trading much we payment It's not wanted have been to unless been that,

so much. you Thank that. Very That's great. helpful. Okay,

you, Carla. Thank

with William question. next America, is from Reuter your please Bank our of proceed from question And

afternoon. Good

In that got capital I handful holidays? maybe have when you turns imagine around sell Will be periods due, terms less for working a well out we've of I in are payables would software quickly. console which the the you extremely are do that you've the should be seen it and than timing such expected to those inventory historical probably launches, the build of of given then expect fairly which the of

our not about vendors, you're that's payment yes, terms say about here suffice to going the it perspective terms, terms, So about our given it to about think in on that the comment of that, once a thinking is that think I'm yes, inside it. to when of agreements to but way turning, right those if what our the right you're which are twice with product to right or way a inside of think yes, payment selling way

the us there terms if the I'm shift you aggregate would sure new is what guidance Okay, and with releases, then, XQ of into any could were software shifted help be, you XQ there? which provide can from an in not

now. -- any really importantly, there's much still remains guidance. too we're marketplace there there's Again, No, just providing right not the too uncertainty further in

Okay, all me. thank you much. for That's very

Thank you, William.

Thanks.

final question Bryan Please Hunt Wells with is from And Fargo. our question. from your proceed

question for looking may first My was could from what your base, yield when touch the proceeds sale asset sales plane, sold, if corporate jet their is were Jim. gears, and George at to you and afternoon, I the of type Good was you on asset during shifting proceeds? And what are the wondering then what expecting are assets year? be

are you? It's Yes, how this Hey, Jim. long time. is been Bryan, a

been while. It's a

terms just and buildings sale, We million break the last in It's the so several held for out down over as for while, now and hey marketplace assets U.S. were in we just roughly estate Australia around and asset some last just it jet holding that in one $X Canada, it an have here weeks was then real here the sale had we've in And that on I'll asset. in short week. three a we of on sold been the of one

And are those all your distribution centers?

centers Canada, as distribution we offices centers. They well distribution co-locate the with U.S. locations all in and are three offices the Australia and

on like, Okay, or the assets to you facility? you looking continuing plan completely use exit leasebacks to are do sale those are

efficient them, utilize this can growth way. the don't capital in sitting real owning much as plate the more are vehicles assets. to we those expect in that balance making feel of but estate, as for that's business just on own certainly we have we assets that some one important of on we that the transition be fully deploy need they're the a and we retailer sheet We we to And that

Very good.

assets those for XX-Q? have as you So listed sale don't the on

that -- yes, the is a do Not is intention because leaseback. to sale

And that. provide so requirement for therefore doesn't

Jim I to talk forward and good, appreciate you Very of luck. to Best more. look

Thanks, Bryan.

Thank you.

Thank you.

the to George now question-and-answer the I'll have for reached session. of remarks. the conference any end over closing We turn

in closing distribution entire honored this of group across of for so in all time, very store about that I'd Thank during and in store thank I'm as that you, interest serve rapidly associates team the this Yes, stock. our our proud team environment. will thanks resilience our the unprecedented refurbishment team your to customers, like and are to shown the teams and I’m a well you of of they've total company. to passionate team, serving changing the have gaming

disconnect time. And you conference. today’s at concludes Thank this This your your for may you lines participation.