GameStop Corp. (NYSE:GME) reported a wider-than-expected loss for its first quarter, while sales also missed expectations.
The results, coming out at the end of Tuesday, showed total global comparable store sales decreased 17% excluding stores that were closed during the first quarter as a result of the COVID-19 pandemic.
The Grapevine, Texas –based company also said SG&A was $386.5 million, down $67.2 million or 15% compared to $453.7 million in the prior year first quarter which includes $18.5 million in incremental wages paid to hourly associates to help offset lost wages due to store closures from the COVID-19 pandemic, and approximately $3.0 million in incremental costs associated with safety materials and equipment to ensure the safety of customers and associates.
GameStop ended the first quarter with $570 million in cash, inventory reduction of 43% and Accounts Payable Decline of 54% Compared to the First Quarter of Fiscal 2019.
Said CEO George Sherman, "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."
GME shares gained 16 cents, however, or 3.2%, to $5.12 early Wednesday.
