GameStop Corp. (NYSE:GME) Q3 2019 Earnings Conference Call - Final Transcript

Dec 10, 2019 • 05:00 pm ET


GameStop Corp. (NYSE:GME) Q3 2019 Earnings Conference Call - Final Transcript


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Welcome to GameStop's Third Quarter 2019 Earnings Call. This call is being recorded and will be made available.

I would now like to turn the call over to Eric Cerny, Investor Relations. Please go ahead.

Eric Cerny

Thank you and welcome to GameStop's Third Quarter Fiscal 2019 Earnings Conference Call. This call will include forward-looking statements, which are subject to various risks and uncertainties, it could cause actual results to differ materially from expectations. Any such statements should be considered in conjunction with the cautionary statements and the 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 earnings release issued earlier today, as well as in the Investors section of our website.

With me today are GameStop's Chief Executive Officer, George Sherman and Chief Financial Officer, Jim Bell. On today's call, George will share insights into our third fiscal quarter performance and updates regarding GameStop's strategic framework for the future. Jim will then provide more detail on our financial results and expectations for the remainder of the year.

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

George E. Sherman

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

I want to begin today's call by first addressing our results during the quarter, their direct impact on our outlook for the remainder of this year, and the trend we anticipate carrying into 2020.

Simply put, our top-line results remain softer than our original expectations and we believe they are a direct reflection of the overall industry. During the quarter in which NPD cited historically low sales. The near-term headwinds confronting the industry as we enter the final stages of the current Microsoft and Sony console cycles are having an outsized impact in our business, given we are the lone specialty retailer in the space. It's important to keep in mind that this is not uniquely a GameStop issue. This is a console issue and consoles are the trigger point for our industry, with Generation 9 consoles on the horizon set to bring excitement and significant innovation to the video game space, those anticipated releases in late 2020 are putting pressure on the current generation of consoles and related games, as consumers wait for new technology and publishers address their software delivery plans.

NPD recently reported significant double-digit industry declines in new hardware for September and October. And as an industry leader, we're feeling that pressure more directly than others. Jim will get into the details of our results, but our sales of new hardware in the third quarter declined 46% versus the prior-year quarter. While these were generally in line with the industry, they are well below our expectations.

Looking ahead, we believe this trend will likely carry through our