gamestop (gme -2.67%)q2 2021 earnings calls September 08, 2021, 5:00 p.m. and
content:
- prepared remarks
- questions and answers
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prepared remarks:
operator
Reading: Gmaestop 2021 q2 conference call transcript
Greetings and welcome to gamestop’s FY2021 Q2 Earnings Conference Call. [operator instructions] as a reminder, this conference call is being recorded and will be archived for two months on gamestop’s investor relations website. This call will include forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. such statement should be considered in conjunction with the cautionary statements and the safe harbor statement in the earnings release and the risk factors discussed in the reports filed with the sec.
gamestop undertakes no obligation to update any of these statements or forward-looking information. A reconciliation and other information regarding the non-GAAP financial measures discussed on the call can be found in the company’s earnings release issued today, as well as on the investors section of Gamestop’s website. Please note that the company will not host a question and answer session as part of today’s call. Now, I’d like to turn the call over to the CEO of the company, Matt Furlong.
matt furlong – CEO
thank you. it’s good to be with everyone today. I want to start by thanking our entire team for all of their hard work given the rate at which the organization is changing. I had the opportunity to meet several team members in our stores, distribution centers and head office, and I look forward to meeting more in the coming weeks and months.
We appreciate everyone stepping up and embracing gamestop’s new operating principles. since you last heard from us in June, our revamped board of directors and new management team have settled in. we now have unified leadership, fully focused on two long-term goals: delighting customers and delivering value to shareholders. In addition to focusing on long-term opportunities, we took a number of steps in the last quarter to strengthen the company’s infrastructure and technology.
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We focus on positioning games at scale while obsessing over competitive pricing, expansive selection, and fast shipping. Our actions included continuing to add tech talent across the organization, including people with eCommerce, UI, UX, operations, and supply chain expertise. We also continue to expand our fulfillment network by adding a 530,000-square-foot facility in Reno, Nevada. this new facility, which is expected to be operational next year, will position us to further expand selection and speed shipping.
With this addition, the company’s fulfillment network will span both US coasts. uu. continental. for the first time. Our new 700,000-square-foot facility in York, Pennsylvania also began shipping orders during the quarter. We increased our catalog by adding new products and leading brands in consumer electronics, collectibles, toys and more.
We signed a lease for a new customer service facility in South Florida and have begun to add talent to that team as we continue to develop the US customer service operation. uu. Finally, we further strengthened our balance sheet and capital position by raising more than $1.1 billion in net proceeds from the June ATM program. let me now turn to our financial results for the quarter. Net sales increased 25.6% to $1,183 million, compared to $942 million during the same period in 2020.
We achieved this growth while overcoming an approximate 9% reduction in our global store fleet due to density reduction efforts and ongoing store closures in certain international markets due to the pandemic. We believe that net sales are the primary metric by which shareholders should assess a company’s performance. SG&A expenses were $378.9 million, or 32% of sales, compared to $348.2 million, or 37% of sales, in the second quarter of last year. adjusting for severance and certain other costs, our adjusted general and administrative expenses were $372.3 million, or 31.5% of sales, compared to $336.9 million, or 35.8% of sales, during the same period last year.
the 430 basis points of leverage was primarily due to stores reopening after widespread closures due to the pandemic in the second quarter of 2020. we reported a net loss of $61.6 million, or $0.85 per share diluted, compared to a net loss of $111.3 million, or diluted loss per share of $1.71, in the prior year second quarter. our adjusted net loss was $55 million, or $0.76 per diluted share, compared to adjusted net loss of $92 million, or a loss of $1.42 per diluted share, in the second quarter of fiscal 2020. our tally global stores was 4,642 at the end of the quarter.
On the balance sheet, we ended the quarter with cash and restricted cash of $1.775 billion, which is slightly more than $1 billion more than at the end of the second quarter of last year. As we announced in June, we raised approximately $1.1 billion in net proceeds by issuing 5 million shares of common stock under an ATM. we intend to continue to use that proceeds for general corporate purposes, as well as to invest in growth initiatives and maintain a strong balance sheet. As a result of the ATM, total shares outstanding are now approximately 75.9 million.
At the end of the quarter, we had no loans under our asset-based revolving line of credit and no long-term debt other than a $47.5 million low-interest unsecured term loan associated with the government response french to covid-19. Debt levels compared to the second quarter of last year were reduced by $424.7 million. Capital expenditures for the quarter were $13.5 million, bringing year-to-date capital expenditures to $28.2 million, a figure we anticipate will increase as the company continues to invest in growth initiatives. In the second quarter, cash flow from operations was an outflow of $11.5 million, compared to an inflow of $192.8 million during the same period last year, largely due to investments in inventory that we are doing to drive sales growth.
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As for our perspective, we are not providing formal guidance at this time. thanks again for your support and interest in gamestop.
questions & answers:
operator
Reading: Gmaestop 2021 q2 conference call transcript
[operator signature]
duration: 8 minutes
call participants:
matt furlong – CEO
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