GameStop Corp. Q4 FY2021 earnings call

• Installed a new management team of technology veterans and introduced an equity-focused executive compensation structure.
• Refreshed the Board with stockholders and value-creating individuals, reduced individual director compensation.
• Ended relationships with high-priced external consultants.
• Hired hundreds of new individuals with e-commerce, operations, and technology experience, eliminated redundant roles.
• Recapitalized the balance sheet after raising ~$1.67 billion in capital.
• Expanded product catalog into areas like PC gaming, personal electronics, VR.
• Invested in fulfillment network with new facilities on East and West Coasts.
• Invested in systems and tech stack, U.S.-based customer service, and a dedicated blockchain team for NFT marketplace (expected launch by end of Q2).
• In Q4, established brand relationships with PC gaming companies, grew PowerUp Rewards Pro members by 31.8% to ~5.8 million, launched redesigned app, partnered with Immutable X with up to $150 million in IMX tokens upon milestones, and discussed partnerships with layer 1s and 2s.

For the fourth quarter of 2021, net sales were $2.25 billion compared to $2.12 billion in the fourth quarter of 2020 and $2.19 billion in the fourth quarter of 2019. For the full fiscal year 2021, net sales were $6.01 billion compared to $5.09 billion in fiscal year 2020. SG&A for the fourth quarter of 2021 was $538.9 million, which was 23.9% of sales, whereas in the fourth quarter of 2020 it was $419.1 million or 19.7% of sales. The company reported a net loss of $147.5 million, or $1.94 per diluted share in Q4 2021, compared to a net income of $80.3 million, or $1.18 per diluted share in the prior year's fourth quarter. For the full fiscal year 2021, SG&A was $1.71 billion compared to $1.51 billion in fiscal year 2020, and the net loss was $381.3 million in FY2021 versus $215.3 million in FY2020. Inventory ended the year at $915 million compared to $602.5 million at the close of fiscal year 2020.

We're not delivering guidance at this time. We anticipate growth across our stores, e-commerce properties, and blockchain gaming offerings.

• Global supply chain issues had a significant impact on the past year's holiday season.
• The Omicron variant affected the holiday season.
• Uncertainties during the early stages of the company's transformation pose risks.

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