GameStop Corp New (NYSE:GME) Q4 2019 Earnings Conference Call - Final Transcript

Mar 26, 2020 • 06:00 pm ET

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GameStop Corp New (NYSE:GME) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you [Operator Instructions] Our first question comes from Steph Wissink with Jefferies. Please state your question.

Analyst
Stephanie Wissink

Hi, good afternoon, everyone. I have a few questions, hopefully these will go pretty quickly, but, Jim, I just wanted to make sure I heard you correctly that the statistic you gave on 2% comp is month-to-date from March, not quarter-to-date through March last Saturday?

Executive
Jim Bell

Hi. Steph, yes, that's correct. It's month-to-date through March through last Saturday. Correct.

Analyst
Stephanie Wissink

And that's a global measure as well?

Executive
Jim Bell

That is on a global basis. That's correct.

Analyst
Stephanie Wissink

Okay and then just second question is on the de-densification of the stores. I think you mentioned 320 at or above that level, which would imply 600 stores plus for the last couple of years. Can you just give us a snapshot of what the transfer rate has looked like. And I think, George, you mentioned in your comments as well, this idea of creating kind of network profitability. So looking at adjacent stores and trade regions and looking at the profitability as you de-densify, can talk a little bit about what you're seeing in the data?

Executive
George Sherman

Yes, Steph, I think when you talk about de-densification, we actually view this somewhat as some uncaptured synergies from the past, where there have been acquisitions and there is stores in very close proximity. So this is a proactive process on our part. It's where we see the probability for heavy sales transference from one store to another. We drop occupancy, we operate with one staff, we operate a far more efficient, far more profitable store. So we're kind of working our way around the world as we look at that to see where there's opportunity, but we certainly see plenty of it.

Executive
Jim Bell

Yeah, the -- Steph, this is Jim, we haven't really quantified publicly the effects, but suffice it to say the percentage of transfer needed to breakeven is fairly low and while that's the case, we're significantly exceeding that in those stores that we've closed and what we've seen in terms of our transferability. So more to come on that as it unfolds, but at this point we're not -- we haven't quantified that in any particular way.

Analyst
Stephanie Wissink

Okay, that's great. And last one for us is just on the working capital improvement you seen and the inventory in particular has been quite astonishing. Do you think about the business from a volume per store target level setting aside the generation 9 hardware, but just thinking about the business today, how much further do you think you can reduce that inventory level from here?

Executive
Jim Bell

Yeah, it's -- suffice it to say, I think this is the right way to think about it. This is about cash conversion and optimizing cash conversion across the entire chain and way the one measure that I think we really focus on is the inventory turn. To be clear, this is not about just taking the inventories down, it's about really creating that turn in cash conversion