UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



			x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~(State or other jurisdiction of~~

~~incorporation or organization)~~

~~(I.R.S. Employer~~

~~Identification No.)~~

Registrant’s telephone number, including area code:

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Class A Common Stock

GME

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes x☒No☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yesx☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange ~~Act. (Check one):~~

Large accelerated filerx

Accelerated filer☐

Non-accelerated filer☐

Smaller reporting company☐

Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐Nox☒

Number of shares of $.001 par value Class A Common Stock outstanding as of November ~~28, 2017: 101,304,394~~30, 2023: 305,514,315

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~UNAUDITED~~ CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except par value per share)

See accompanying ~~condensed~~ notes to ~~unaudited~~condensed consolidated financial statements.

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share data)

(unaudited)


	Three Months Ended				Nine Months Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net sales	$	1,078.3	$	1,186.4	$	3,479.2	$	3,700.8
Cost of sales	796.5		894.8		2,604.2		2,828.5
Gross profit	281.8		291.6		875.0		872.3
Selling, general and administrative expenses	296.5		387.9		964.7		1,227.6
Asset impairments	—		—		—		2.5

Operating loss	(14.7)		(96.3)		(89.7)		(357.8)
Interest income, net	(12.9)		(3.7)		(34.2)		(3.3)
Other loss, net	2.5		—		2.4		—
Loss before income taxes	(4.3)		(92.6)		(57.9)		(354.5)
Income tax (benefit) expense	(1.2)		2.1		(1.5)		6.8
Net loss	$	(3.1)	$	(94.7)	$	(56.4)	$	(361.3)

Net loss per share:
Basic	$	(0.01)	$	(0.31)	$	(0.18)	$	(1.19)
Diluted	(0.01)		(0.31)		(0.18)		(1.19)

Weighted-average shares outstanding:
Basic	305.3		304.2		304.9		304.1
Diluted	305.3		304.2		304.9		304.1

13 Weeks Ended 39 Weeks Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net sales $ 1,988.6
$ 1,959.2
$ 5,722.1
$ 5,562.5
Cost of sales 1,299.2
1,251.0
3,706.5
3,561.1
Gross profit 689.4
708.2
2,015.6
2,001.4
Selling, general and administrative expenses 565.1
567.1
1,671.0
1,606.3
Depreciation and amortization 36.7
42.3
112.3
124.0
Operating earnings 87.6
98.8
232.3
271.1
Interest income (0.2 ) —
(0.4 ) (0.5 )
Interest expense 14.1
14.8
42.6
39.7
Earnings before income tax expense 73.7
84.0
190.1
231.9
Income tax expense 14.3
33.2
49.5
87.4
Net income $ 59.4
$ 50.8
$ 140.6
$ 144.5

Dividends per common share $ 0.38
$ 0.37
$ 1.14
$ 1.11

Earnings per share:
Basic $ 0.59
$ 0.49
$ 1.39
$ 1.39
Diluted $ 0.59
$ 0.49
$ 1.39
$ 1.39
Weighted-average shares outstanding:
Basic 101.5
103.7
101.4
103.8
Diluted 101.5
104.0
101.5
104.2

See accompanying ~~condensed~~ notes to ~~unaudited~~condensed consolidated financial statements.

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~LOSS

13 Weeks Ended 39 Weeks Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net income $ 59.4
$ 50.8
$ 140.6
$ 144.5
Other comprehensive income:

Foreign currency translation adjustment (23.2 ) (6.9 ) 23.0
43.1
Total comprehensive income $ 36.2
$ 43.9
$ 163.6
$ 187.6


	Three Months Ended				Nine Months Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Net loss	$	(3.1)	$	(94.7)	$	(56.4)	$	(361.3)
Other comprehensive loss:
Foreign currency translation adjustment	(10.3)		(16.6)		(17.0)		(24.9)
Reclassification of foreign currency loss (gain) included in net loss	2.5		—		(0.6)		—
Net change in unrealized gain (loss) on available-for-sale securities	0.1		(0.2)		(0.4)		(0.2)
Reclassification of realized loss on available-for-sale securities included in net loss	—		—		1.0		—
Total comprehensive loss	$	(10.8)	$	(111.5)	$	(73.4)	$	(386.4)

See accompanying ~~condensed~~ notes to ~~unaudited~~condensed consolidated financial statements.

~~UNAUDITED~~ CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Nine Months Ended
	October 28, 2023		October 29, 2022
Cash flows from operating activities:
Net loss	$	(56.4)	$	(361.3)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization	37.6		47.5
Stock-based compensation expense, net	14.0		32.2
Gain on sale of digital assets	—		(7.1)
Digital asset impairments	—		33.9
Asset impairments	—		2.5
(Gain) loss on disposal of property and equipment, net	(5.0)		5.1
Other, net	2.9		6.9
Changes in operating assets and liabilities:
Receivables, net	65.7		13.3
Merchandise inventories, net	(357.1)		(245.0)
Prepaid expenses and other assets	5.7		(38.7)
Prepaid income taxes and income taxes payable	(5.1)		0.9
Accounts payable and accrued liabilities	114.5		288.7
Operating lease right-of-use assets and lease liabilities	(7.1)		(7.7)
Changes in other long-term liabilities	(2.4)		(1.2)
Net cash flows used in operating activities	(192.7)		(230.0)
Cash flows from investing activities:
Proceeds from sale of digital assets	2.8		77.4
Purchases of marketable securities	(313.0)		(237.0)
Proceeds from maturities and sales of marketable securities	270.5		—
Capital expenditures	(27.2)		(44.3)
Proceeds from sale of property and equipment	13.1		—
Other	—		0.3
Net cash flows used in investing activities	(53.8)		(203.6)
Cash flows from financing activities:
Settlement of stock-based awards	(0.1)		(3.3)
Repayments of debt	(8.0)		—
Net cash flows used in financing activities	(8.1)		(3.3)
Exchange rate effect on cash, cash equivalents and restricted cash	(12.2)		(23.5)
Decrease in cash, cash equivalents and restricted cash	(266.8)		(460.4)
Cash, cash equivalents and restricted cash at beginning of period	1,196.0		1,319.9
Cash, cash equivalents and restricted cash at end of period	$	929.2	$	859.5

See accompanying notes to condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except for per share data)


	Class A Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Loss		Total Stockholders' Equity
	Shares	Amount
Balance at January 28, 2023	304.6	$	0.1	$	1,613.6	$	(71.9)	$	(219.5)	$	1,322.3
Net loss	—	—		—		—		(50.5)		(50.5)
Foreign currency translation	—	—		—		(8.1)		—		(8.1)
Reclassification of foreign currency gain included in net loss	—	—		—		(1.2)		—		(1.2)
Stock-based compensation expense, net	—	—		7.9		—		—		7.9
Settlement of stock-based awards	0.1	—		(0.1)		—		—		(0.1)
Net change in unrealized gain on available-for-sale securities	—	—		—		0.4		—		0.4
Reclassification of realized loss on available-for-sale securities included in net loss	—	—		—		0.9		—		0.9
Balance at April 29, 2023	304.7	0.1		1,621.4		(79.9)		(270.0)		1,271.6
Net loss	—	—		—		—		(2.8)		(2.8)
Foreign currency translation	—	—		—		1.4		—		1.4
Reclassification of foreign currency gain included in net loss	—	—		—		(1.9)		—		(1.9)
Stock-based compensation expense, net	—	—		(0.3)		—		—		(0.3)
Settlement of stock-based awards	0.5	—		—		—		—		—
Net change in unrealized loss on available-for-sale securities	—	—		—		(0.9)		—		(0.9)
Reclassification of realized loss on available-for-sale securities included in net loss	—	—		—		0.1		—		0.1
Balance at July 29, 2023	305.2	0.1		1,621.1		(81.2)		(272.8)		1,267.2
Net loss	—	—		—		—		(3.1)		(3.1)
Foreign currency translation	—	—		—		(10.3)		—		(10.3)
Reclassification of foreign currency loss included in net loss	—	—		—		2.5		—		2.5
Stock-based compensation expense, net	—	—		6.4		—		—		6.4
Settlement of stock-based awards	0.3	—		—		—		—		—
Net change in unrealized gain on available-for-sale securities	—	—		—		0.1		—		0.1
Balance at October 28, 2023	305.5	$	0.1	$	1,627.5	$	(88.9)	$	(275.9)	$	1,262.8

Class A
Common Stock

Shares Amount
Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings

Total
Stockholders'
Equity
Balance at January 29, 2017 101.0
$ 0.1
$ —
$ (47.3 ) $ 2,301.3
$ 2,254.1
Net income —
—
—
—
140.6
140.6
Foreign currency translation —
—
—
23.0
—
23.0
Dividends declared, $1.14 per common share —
—
—
—
(116.8 ) (116.8 )
Stock-based compensation expense —
—
16.2
—
—
16.2
Settlement of stock-based awards 0.3
—
(3.4 ) —
—
(3.4 )
Balance at October 28, 2017 101.3
$ 0.1
$ 12.8
$ (24.3 ) $ 2,325.1
$ 2,313.7

Table of Contents

Class A
Common Stock

Shares Amount
Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Income (Loss)

Retained
Earnings
Total
Stockholders'
Equity
Balance at January 31, 2016 103.3
$ 0.1
$ —
$ (88.8 ) $ 2,169.7
$ 2,081.0
Net income —
—
—
—
144.5
144.5
Foreign currency translation —
—
—
43.1
—
43.1
Dividends declared, $1.11 per common share —
—
—
—
(117.0 ) (117.0 )
Stock-based compensation expense —
—
17.4
—
—
17.4
Repurchase of common shares (1.4 ) —
(8.5 ) —
(27.5 ) (36.0 )
Settlement of stock-based awards (including tax deficiency of $0.4) 0.7
—
(8.9 ) —
—
(8.9 )
Balance at October 29, 2016 102.6
$ 0.1
$ —
$ (45.7 ) $ 2,169.7
$ 2,124.1

~~See accompanying condensed notes to unaudited consolidated financial statements.~~

~~GAMESTOP CORP.~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(in millions)~~

39 Weeks Ended
October 28,
2017 October 29,
2016
Cash flows from operating activities:
Net income $ 140.6
$ 144.5
Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization (including amounts in cost of sales) 113.2
125.0
Stock-based compensation expense 16.2
17.4
Deferred income taxes (14.2 ) —
Excess tax benefits realized from exercise of stock-based awards —
0.4
Loss on disposal of property and equipment 3.7
4.6
Gain on divestitures (7.3 ) —
Other 27.6
18.7
Changes in operating assets and liabilities:
Receivables, net 20.4
(3.6 )
Merchandise inventories (715.4 ) (482.9 )
Prepaid expenses and other current assets (13.5 ) (17.2 )
Prepaid income taxes and income taxes payable (100.3 ) (135.2 )
Accounts payable and accrued liabilities 505.6
458.6
Changes in other long-term liabilities 6.3
1.3
Net cash flows (used in) provided by operating activities (17.1 ) 131.6
Cash flows from investing activities:
Purchase of property and equipment (85.6 ) (105.8 )
Acquisitions, net of cash acquired (8.5 ) (441.1 )
Proceeds from divestitures 51.2
—
Other 2.0
5.4
Net cash flows used in investing activities (40.9 ) (541.5 )
Cash flows from financing activities:
Repayments of acquisition-related debt (21.8 ) (0.2 )
Repurchase of common shares (22.0 ) (43.3 )
Dividends paid (116.7 ) (117.8 )
Proceeds from senior notes —
475.0
Borrowings from the revolver 373.0
510.0
Repayments of revolver borrowings (373.0 ) (510.0 )
Payments of financing costs —
(8.1 )
Issuance of common stock, net of share repurchases for withholdings taxes (3.4 ) (8.4 )
Excess tax benefits related to stock-based awards —
(0.4 )
Net cash flows (used in) provided by financing activities (163.9 ) 296.8
Exchange rate effect on cash and cash equivalents 7.2
18.8
Decrease in cash and cash equivalents (214.7 ) (94.3 )
Cash and cash equivalents at beginning of period 669.4
450.4
Cash and cash equivalents at end of period $ 454.7
$ 356.1

~~See accompanying condensed notes to unaudited consolidated financial statements.~~

GAMESTOP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in millions, except for per share data)

(unaudited)


	Class A Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Retained Loss		Total Stockholders' Equity
	Shares	Amount
Balance at January 29, 2022	303.6	$	0.1	$	1,577.5	$	(68.7)	$	93.6	$	1,602.5
Net loss	—	—		—		—		(157.9)		(157.9)
Foreign currency translation	—	—		—		(3.9)		—		(3.9)
Stock-based compensation expense, net	—	—		11.1		—		—		11.1
Settlement of stock-based awards	—	—		(1.1)		—		—		(1.1)
Balance at April 30, 2022	303.6	0.1		1,587.5		(72.6)		(64.3)		1,450.7
Net loss	—	—		—		—		(108.7)		(108.7)
Foreign currency translation	—	—		—		(4.4)		—		(4.4)
Stock-based compensation expense, net	—	—		7.8		—		—		7.8
Settlement of stock-based awards	0.4	—		(1.9)		—		—		(1.9)
Balance at July 30, 2022	304.0	0.1		1,593.4		(77.0)		(173.0)		1,343.5
Net loss	—	—		—		—		(94.7)		(94.7)
Foreign currency translation	—	—		—		(16.6)		—		(16.6)
Stock-based compensation expense, net	—	—		13.3		—		—		13.3
Settlement of stock-based awards	0.1	—		(0.3)		—		—		(0.3)
Net change in unrealized loss on available-for-sale securities	—	—		—		(0.2)		—		(0.2)
Balance at October 29, 2022	304.1	$	0.1	$	1,606.4	$	(93.8)	$	(267.7)	$	1,245.0

See accompanying notes to condensed consolidated financial statements.

Table of Contents

GAMESTOP CORP.

NOTES TO ~~UNAUDITED~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)



1.	1. General Information

GameStop Corp. (“("GameStop,~~” “we,” “us,” “our,”~~" "we," "us," "our," or the ~~“Company”~~"Company"), a Delaware corporation established in 1996, is a ~~global family~~leading specialty retailer offering games and entertainment products through its thousands of ~~specialty retail brands that makes the most popular technologies affordable~~stores and simple. Within our family of brands, we are the world’s largest omnichannel video game retailer, the largest AT&T® (“AT&T”) authorized retailer, the largest Apple© certified products reseller, a Cricket Wireless_TM reseller (“Cricket,” an AT&T brand) and the owner of www.thinkgeek.com, one of the world’s largest sellers of collectible pop-culture themed products. As of October 28, 2017, GameStop's retail network and family of brands include 7,462 company-operated stores in the United States, Australia, Canada and Europe.ecommerce platforms.

We ~~have five reportable segments, which are comprised of~~operate our business in four geographic ~~Video Game Brands segments—~~segments: United States, Canada, Australia and Europe—and a Technology Brands segment. Our Technology Brands segment includes our Spring Mobile and Simply Mac businesses. Spring Mobile owns and operates our AT&T branded wireless retail stores and Cricket branded pre-paid wireless stores.Europe. The information contained in these condensed consolidated financial statements refers to continuing operations unless otherwise noted.

Basis of Presentation and Consolidation

The ~~unaudited~~ condensed consolidated financial statements include our accounts and the accounts of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The ~~unaudited~~ condensed consolidated financial statements included herein reflect all adjustments (consisting only of normal, recurring adjustments) which are, in our opinion, necessary for a fair presentation of the information ~~as of and~~ for the periods presented. These ~~unaudited~~ condensed consolidated ~~interim~~ financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they ~~do not include all~~exclude certain disclosures required under GAAP for complete consolidated financial statements.

~~These unaudited~~The accompanying condensed consolidated financial statements and notes are unaudited. The condensed consolidated financial statements should be read in conjunction with our ~~annual report~~Annual Report on Form 10-K for the 52 weeks ended January 28, ~~2017~~2023 ("fiscal 2022"), as filed with the Securities and Exchange Commission ("SEC") on March 28, 2023 (the ~~“2016~~“2022 Annual Report on Form 10-K”). Due to the seasonal nature of our business, our results of operations for the nine months ended October 28, 2023 are not indicative of our future results for the 53 weeks ending February 3, 2024 ("fiscal 2023"). Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Fiscal 2023 consists of 53 weeks ending on February 3, 2024. Fiscal 2022 consisted of 52 weeks ended on January 28, 2023. All three and nine month periods presented herein contain 13 weeks and 39 weeks, respectively. All references to years, quarters and months relate to fiscal periods rather than calendar periods. Our business, like that of many retailers, is seasonal, with the major portion of the net sales realized during the fourth quarter, which includes the holiday selling season.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported ~~amounts of~~and disclosed in the condensed consolidated financial statements and accompanying footnotes. We regularly evaluate the estimates related to our assets and liabilities, ~~the disclosure of~~ contingent assets and liabilities, ~~at the date of the financial statements~~ and the reported amounts of revenues and ~~expenses during the reporting period.~~expenses. In preparing these condensed consolidated financial statements, we have made our best estimates and judgments of certain amounts ~~included~~recognized in the condensed consolidated financial statements, giving due consideration to materiality. Changes in the estimates and assumptions that we have used ~~by us~~ could have a significant impact on our financial results. Actual results could differ from those estimates. ~~Due~~

Table of Contents

GAMESTOP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)

2. Summary of Significant Accounting Policies

Included below are certain updates related to policies included in Part II, Item 8 "Notes to Consolidated Financial Statements", Note 2, Summary of Significant Accounting Policies," in the ~~seasonal nature of our business, the results of operations for the 39 weeks ended October 28, 2017 are not indicative of the results to be expected for the 53 weeks ending February 3, 2018.~~2022 Annual Report on Form 10-K.

Cash and Cash Equivalents and Restricted Cash

Our cash and cash equivalents on our Condensed Consolidated Balance Sheets are carried at fair value and consist primarily of cash, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments with an original maturity of 90 days or less. Restricted cash ~~of $13.7 million, $10.1 million and $10.2 million as of October 28, 2017, October 29, 2016 and January 28, 2017, respectively,~~ consists primarily of bank deposits ~~serving as collateral for bank guarantees issued~~that collateralize our obligations to vendors and landlords.

The following table presents a reconciliation of cash, cash equivalents and restricted cash in our Condensed Consolidated Balance Sheets to total cash, cash equivalents and restricted cash in our Condensed Consolidated Statements of Cash Flows:


	October 28, 2023		October 29, 2022		January 28, 2023
Cash and cash equivalents	$	909.0	$	803.8	$	1,139.0
Restricted cash(1)	5.1		40.9		41.3
Long-term restricted cash(2)	15.1		14.8		15.7
Total cash, cash equivalents and restricted cash	$	929.2	$	859.5	$	1,196.0

_________________________________________________

(1) Recognized in prepaid expenses and other current assets on ~~behalf of~~ our ~~foreign subsidiaries and is included~~Condensed Consolidated Balance Sheets.

(2) Recognized in other noncurrent assets on our Condensed Consolidated Balance Sheets.

We have traditionally invested our excess cash in investment grade short-term fixed income securities, which consist of U.S. government and agency securities and time deposits. Such investments with an original maturity in excess of 90 days and less than one year are classified as marketable securities on our Condensed Consolidated Balance Sheets.

Such investments are classified as available-for-sale debt securities and reported at fair value. Unrealized holding gains and losses are recognized in accumulated other comprehensive loss on our Condensed Consolidated Balance Sheets. Realized gains and losses upon sale or extinguishment are reported in other loss, net in our ~~unaudited condensed consolidated balance sheets.~~Condensed Consolidated Statements of Operations. Each reporting period, we evaluate whether declines in fair value below carrying value are due to expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs.

On ~~November 17, 2017, our~~December 5, 2023, the Board of Directors approved a ~~quarterly cash dividend~~new investment policy (the “Investment Policy”) that permits the Company to ~~our stockholders of $0.38 per share of Class A Common Stock payable on December 12, 2017~~invest in equity securities, among other investments.

We account for digital assets in accordance with ASC 350, Intangibles-Goodwill and Other (Topic 350). Our digital assets are indefinite-lived intangible assets which are initially recorded at cost. Accordingly, if the fair market value at any point during the reporting period is lower than the carrying value, an impairment loss equal to ~~stockholders of record at~~ the ~~close of business on December 1, 2017. Future dividends~~difference will be ~~subject to approval by~~recognized in SG&A expenses in our ~~Board~~Condensed Consolidated Statement of ~~Directors.~~

~~Adoption~~Operations. Impairment losses cannot be recovered for any subsequent increase in fair value until the sale or disposal of ~~New Accounting Pronouncements~~the asset. Gains on the sale of digital assets, if any, will be recognized based on the fair value upon sale or disposal of the assets in SG&A expenses in our Condensed Consolidated Statement of Operations.

In January ~~2017,~~2022, we entered into contractual agreements with Immutable X Pty Limited (“IMX”) and Digital Worlds NFTs Ltd. pursuant to which the ~~Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2017-04, Intangibles—Goodwill~~Company was entitled to receive up to $150 million in digital assets in the form of IMX tokens once certain contractual milestones had been achieved. Upon announcement, we achieved our first milestone under the agreement with IMX and ~~Other, Simplifying~~recognized a $79.0 million noncurrent receivable and corresponding deferred income liability related to our entitlement to IMX tokens as of January 29, 2022. During fiscal 2022, we achieved our second and third milestones under our agreement with IMX, and recognized an additional $33.8 million of deferred income liability on our Condensed Consolidated Balance Sheets. The deferred income is recognized over the ~~Test for Goodwill Impairment, which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from~~term of the ~~goodwill impairment test. Step 2 measures~~contractual agreement. We liquidated all tokens received under our agreements with IMX in fiscal 2022 and have no IMX token assets recorded on the Condensed Consolidated Balance Sheets as of October 28, 2023. During the three months ended October 29, 2022, we recognized $13.9 million of income in SG&A expenses in our Condensed Consolidated Statements of Operations. During the nine months ended October 29, 2022, we recognized a ~~goodwill impairment~~ loss ~~by comparing~~of $7.2 million on the ~~implied fair value of a reporting unit’s goodwill and the carrying amount. Instead, entities will record~~noncurrent receivable, an impairment ~~charge based~~of $33.9 million on the ~~excess~~digital assets, a gain of a reporting unit's carrying amount over its estimated fair value. We early adopted this updated standard, effective January 29, 2017, which did not have an impact to our consolidated financial statements upon adoption.

~~In October 2016,~~$6.9 million on the ~~FASB issued ASU 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers~~sale of Assets Other than Inventory, which eliminates the exception to defer the tax effects of intra-entity asset transfers (intercompany sales). Prior to this update, the tax effects of intra-entity asset transfers were deferred until the transferred asset was sold to a third party or otherwise recovered through use, which was an exception to the general requirement for comprehensive recognition of currentdigital assets, and deferred income ~~taxes. We early adopted this updated standard, effective January 29, 2017,~~of $41.7 million in SG&A expenses in our Condensed Consolidated Statements of Operations. During the three and ~~as a result~~nine months ended October 28, 2023, we ~~recognize tax expense or benefit from intercompany sales~~recognized deferred income of ~~assets other than inventory in the period in which the transaction occurs.~~

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GAMESTOP CORP.

~~CONDENSED~~ NOTES TO ~~UNAUDITED~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)

~~In March 2016,~~

$14.3 million and $42.9 million, respectively, in SG&A expenses in our Condensed Consolidated Statements of Operations. As of October 28, 2023, the ~~FASB issued ASU 2016-09, Improvements~~remaining deferred income liability related to ~~Employee Share-Based Payment Accounting, which simplifies several aspects of accounting for employee share-based payment transactions. The amendments of the updated standard include, among~~our agreements with IMX was $14.3 million in accrued liabilities and other ~~things, the requirement to recognize excess tax benefits and deficiencies through earnings and present the related cash flows in operating activities in the statement of cash flows, the election~~current liabilities on our Condensed Consolidated Balance Sheets.

During 2022, we also launched beta versions of a ~~policy~~non-custodial digital asset wallet and a peer-to-peer non-fungible token ("NFT") marketplace that enables the purchases, sales, and trades of NFTs. Revenues earned related to ~~either estimate forfeitures when determining periodic expense or recognize actual forfeitures when they occur,~~our NFT digital asset wallet and an increase in the allowable income tax withholding from the minimum to maximum statutory rate and its classification in the statement of cash flows. As a result of the adoption of this updated standard, effective January 29, 2017, excess tax benefits and deficienciesmarketplace are recognized in ~~our results of operations and are presented in cash flows from operating activities~~net sales in our statement of cash flows on a prospective basis. In addition, we elected to recognize actual forfeitures of stock-based awards as they occur. The adoption of this updated standard did not result in a material impact to our consolidated financial statements.

~~Recently Issued Accounting Pronouncements~~

In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The new guidance is intended to more closely align hedge accounting with entities’ hedging strategies, simplify the application of hedge accounting and increase the transparency of hedging programs. The new guidance is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We do not anticipate that adoption of this standard will have a material impact to our consolidated financial statements.

~~In August 2016, the FASB issued ASU 2016-15,~~Condensed Consolidated Statement of ~~Cash Flows, Classification of Certain Cash Receipts~~Operations. Revenues earned from our digital asset wallet and ~~Cash Payments, which provides guidance on eight specific cash flow issues in regard~~NFT marketplace were not material to ~~how cash receipts and cash payments are presented and classified in~~ the statement of cash flows. The updated standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those years, with early adoption permitted. The amendments in the ASU should be adopted on a retrospective basis unless it is impracticable to apply, in which case the amendments should be applied prospectively as of the earliest date practicable. We are currently evaluating the impact that this standard will have on ourcondensed consolidated financial statements ~~and disclosures.~~

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which sets forth a new five-step revenue recognition model that replaces the prior revenue recognition guidance in its entirety. The underlying principle of the new standard is that an entity will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the ~~goods or services. The updated standard also required additional disclosures on~~three and nine months ended October 28, 2023.

Assets Held-for-Sale

During the nature, timing, and uncertainty of revenue and related cash flows. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year to December 15, 2017 (with early adoption permitted). In 2016, the FASB issued several ASUs that further amended the new revenue standard in the areas of principal versus agent evaluation, licenses of intellectual property, identifying performance obligations, and other clarifications and technical corrections. Entities may use either a full retrospective or modified retrospective transition approach in applying these ASUs. We plan to adopt these new standards in the firstfourth quarter of fiscal ~~2018~~2022, we committed to a plan to sell property in our Europe segment consisting of a building, land and ~~intend~~other property and equipment with a total net carrying value of $7.1 million. In April 2023, the Company entered into an agreement to ~~utilize~~sell the ~~modified retrospective transition approach. We do not expect~~building and land for approximately $13.1 million. The transaction closed in August 2023 and the ~~adoption~~related gain was recognized in SG&A expenses in our Condensed Consolidated Statements of Operations.

During the ~~new revenue standards~~first half of fiscal 2023, we committed to ~~have~~ a ~~material impact~~plan to sell additional properties in our ~~consolidated balance sheets, statements~~Europe segment consisting of ~~operations or statements~~buildings and land with a total net carrying value of ~~cash flows.~~$9.2 million. There were no impairment charges recognized on these asset groups as the estimated fair value exceeded their respective carrying values.

~~Based~~The building, land and other property and equipment are classified as assets held for sale in other noncurrent assets on our ~~ongoing evaluation,~~Condensed Consolidated Balance Sheets as of October 28, 2023.

The following table presents net sales by significant product category:


	Three Months Ended				Nine Months Ended
	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Hardware and accessories (1)	$	579.4	$	627.0	$	1,902.2	$	1,897.2
Software (2)	321.3		352.1		1,056.7		1,152.2
Collectibles	177.6		207.3		520.3		651.4
Total net sales	$	1,078.3	$	1,186.4	$	3,479.2	$	3,700.8

__________________________________________________

(1) Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are sold together in a single SKU, interactive game figures, strategy guides, mobile and consumer electronics.

(2) Includes sales of new and pre-owned gaming software, digital software, and PC entertainment software.

See Note 8, "Segment Information," for net sales by geographic location.

Performance Obligations

We have arrangements with customers where our performance obligations are satisfied over time, which primarily relate to extended warranties and our GameStop ProTM rewards program, formerly known as PowerUp Rewards®. Our GameStop ProTM rewards program includes a subscription to Game Informer® magazine.

We expect to recognize revenue in future periods for remaining performance obligations we ~~expect that the new revenue standards will primarily impact the accounting of our PowerUp Rewards loyalty program and the recognition of breakage~~have associated with ~~our~~unredeemed gift cards, liability. For our loyalty program, we currently estimate the net cost of the rewards that will be issued and redeemed and record this cost (presented as cost of sales) and the associated balance sheet liability as points are accumulated by our loyalty program members. Under the new standards, the transaction price will be allocated between the product(s) soldtrade-in credits, reservation deposits and loyalty points earned ~~where~~as part of our GameStop ProTM rewards program (collectively, "unredeemed customer liabilities"), extended warranties, and subscriptions to our GameStop ProTM rewards program.

Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the portion allocated to the loyalty points will be initially recorded as deferred revenue and subsequently recognized as revenue upon redemption or expiration of the loyalty points. Estimated breakage on unusedtime customers redeem gift cards, trade-in credits, customer deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance.

We offer extended warranties on certain new and ~~merchandise credit liabilities is currently~~pre-owned products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a ~~quarterly~~straight-line basis ~~(recorded to cost of sales) for balances older than two years to~~over the ~~extent that we believe the likelihood of redemption is remote. Under the new standards, we will recognize breakage in revenue based on and in proportion to historical redemption patterns, regardless~~life of the age of the unused gift cards and merchandise credit liabilities. Significant items yet to be finalized in our implementation efforts include quantification of the cumulative-effect adjustments to be recorded upon adoption, which we do not expect to be material; our ongoing evaluation of changes to business processes and related controls; and the impact of the new revenue-related disclosure requirementscontract.

Revenues for subscriptions to our ~~consolidated financial statements.~~

In March 2016, the FASB issued ASU 2016-04, Recognition of Breakage for Certain Prepaid Stored-Value Products. The standard specifies how prepaid stored-value product liabilities should be derecognized, thereby eliminating the current and potential future diversity in practice. Consistent with ASU 2014-09 related to revenue recognition, the standard requires derecognition in proportion with the rights expected to be exercised by the holder. Entities may adopt this standard using eitherGameStop ProTM rewards program are recognized on a ~~modified retrospective transition approach with~~straight-line basis over a cumulative-effect adjustment to retained earnings or a full retrospective transition approach. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. We continue to evaluate the impact that this standard will have on our consolidated financial statements and footnote disclosures.

12-month subscription term.

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GAMESTOP CORP.

~~CONDENSED~~ NOTES TO ~~UNAUDITED~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)

~~In February 2016, the FASB issued ASU 2016-02, Leases.~~

The ~~standard requires a lessee to recognize a liability~~following table presents our performance obligations recognized in accrued liabilities and other current liabilities on our Condensed Consolidated Statements of Operations:


	October 28, 2023		October 29, 2022
Unredeemed customer liabilities	$	156.2	$	204.9
Extended warranties	71.0		80.2
Subscriptions	41.2		44.0
Total performance obligations	$	268.4	$	329.1

Significant Judgments and Estimates

We accrue loyalty points related to ~~lease payments and an offsetting right-of-use asset representing a right to use~~our GameStop ProTM rewards program at the ~~underlying asset~~estimated retail price per point, net of estimated breakage, which can be redeemed by loyalty program members for ~~the lease term~~products we offer. The estimated retail price per point is based on the ~~balance sheet. Entities are required to use a modified retrospective transition approach for leases that exist or are entered into after~~actual historical retail prices of products purchased through the ~~beginning~~redemption of ~~the earliest comparative period presented in the financial statements,~~loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates.

Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with ~~certain reliefs available. The ASU is effective for fiscal years,~~gift cards, extended warranties and ~~interim periods within those years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the overall impact~~subscriptions to our ~~consolidated financial statements, though we expect~~GameStop ProTM rewards program.

The following table presents a rollforward of our contract liabilities:


	October 28, 2023		October 29, 2022
Contract liability beginning balance	$	338.2	$	378.3
Increase to contract liabilities (1)	540.8		586.6
Decrease to contract liabilities (2)	(608.3)		(630.7)
Other adjustments (3)	(2.3)		(5.1)
Contract liability ending balance	$	268.4	$	329.1

__________________________________________________

(1) Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to our GameStop ProTM rewards program and extended warranties sold.

(2) Includes redemptions of gift cards, trade-in credits, loyalty points and customer deposits and revenues recognized for our GameStop ProTM rewards program and extended warranties. During the ~~adoption to result in a material increase in the assets and liabilities reflected in our consolidated balance sheets.~~

On July 21, 2017, we sold our ownership interest in Kongregate, a web and mobile gaming platform and publisher of mobile games, for proceeds of $54.7 million, net of transaction costs, of which $3.5 million was restricted cash held in escrow primarily for indemnification purposes. We recognized a gain on the sale of $7.3 million, net of tax, which is classified in selling, general and administrative expenses in our consolidated statements of operations for the 39 weeksnine months ended October 28, ~~2017. The disposed net assets~~2023 and October 29, 2022, there were $30.2 million and $42.9 million of ~~Kongregate primarily consisted~~gift cards redeemed that were outstanding as of ~~goodwill.~~January 28, 2023 and January 29, 2022, respectively.

(3) Primarily includes foreign currency translation adjustments.



3.	4. Fair Value Measurements ~~and Financial Instruments~~

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Applicable accounting standards require disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Each fair value measurement is reported in one of the following three levels:

•Level 1 inputs are quoted prices in active markets for identical assets or liabilities.

•Level 2 inputs are observable inputs other than quoted prices included ~~within~~in Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs.

•Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

Assets and liabilities that are measured at fair value on a recurring basis include our cash equivalents, marketable securities, foreign currency contracts, company-owned life insurance policies ~~we own that have~~with a cash surrender value, ~~contingent consideration payable associated with acquisitions,~~ and certain nonqualified deferred compensation liabilities.

We measure the fair value of cash equivalents and certain marketable securities based on quoted prices in active markets for identical assets. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data.

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GAMESTOP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)

In August 2022, the Company opened investment portfolios consisting of U.S. government treasury notes and bills. These investments are classified as available-for-sale debt securities and reported at fair value on a recurring basis and utilize Level 1 inputs for measurement. Additionally, in the second quarter of fiscal 2023 the Company invested in certain time deposits, which are reported at fair value utilizing Level 1 inputs for measurement.

As of October 28, 2023, the investment portfolios aggregate balance was $303.1 million, of which $300.5 million are recognized in marketable securities and $2.6 million are recognized in cash and cash equivalents on our Condensed Consolidated Balance Sheets.

There were no sales of U.S. government securities during the three months ended October 28, 2023. During the nine months ended October 28, 2023, we realized a $1.0 million loss on sales of U.S. government securities, which is included within other loss, net in our Condensed Consolidated Statements of Operations.

We measure the fair value of our foreign currency contracts, ~~our~~ life insurance policies with cash surrender values and certain nonqualified deferred compensation liabilities based on Level 2 inputs using quotations provided by major market news services, such as Bloomberg,, and industry-standard models that consider various assumptions, including quoted forward prices, time value, volatility factors, ~~and~~ contractual prices for the underlying instruments ~~as well as~~and other relevant economic measures, all of which are observable in active markets. When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

In August 2016, we acquired certain assets from Cellular World and Red Skye Wireless. The purchase price included two future payments of contingent consideration. We recognized an acquisition-date liability of $43.2 million representing the total estimated fair value of the contingent consideration. The first payment of $20.0 million was contingent on the relocation of certain stores and was paid in August 2017. The second payment is contingent on sales performance of certain stores and is due in March 2018. During the 13 weeks ended October 28, 2017, we reduced the contingent liability associated with the second payment by $5.7 million to reflect its estimated fair value of $17.5 million. The fair value was estimated based on Level 3 inputs which include future sales projections derived from our historical experience with comparable acquired stores and a discount rate commensurate with the risks and inherent uncertainty in the business.

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~~GAMESTOP CORP.~~

~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

The following ~~table provides the fair value of~~tables present our assets and liabilities measured at fair value on a recurring ~~basis and recorded~~basis:


	October 28, 2023
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Assets
Level 1:
U.S. government securities(1)	$	261.8	$	—	$	(0.3)	$	261.5
Time deposits(2)	41.6		—		—		41.6
Level 2:
Company-owned life insurance(3)	0.4		—		—		0.4
Total assets	$	303.8	$	—	$	(0.3)	$	303.5
Liabilities
Level 2:
Foreign currency contracts(4)	$	1.3	$	—	$	—	$	1.3
Nonqualified deferred compensation(4)	0.4		—		—		0.4
Total liabilities	$	1.7	$	—	$	—	$	1.7

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GAMESTOP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in ~~our unaudited condensed consolidated balance sheets (in millions):~~ millions, except per share amounts)

(unaudited)

October 28, 2017 October 29, 2016 January 28, 2017
Level 2 Level 3 Level 2 Level 3 Level 2 Level 3
Assets
Foreign currency contracts
Other current assets $ 1.9
$ —
$ 16.7
$ —
$ 13.3
$ —
Other noncurrent assets 0.4
—
0.2
—
0.1
—
Company-owned life insurance⁽¹⁾
13.0
—
10.3
—
12.4
—
Total assets $ 15.3
$ —
$ 27.2
$ —
$ 25.8
$ —
Liabilities
Foreign currency contracts
Accrued liabilities $ 3.6
$ —
$ 8.3
$ —
$ 4.3
$ —
Other long-term liabilities 0.5
—
—
—
0.1
—
Nonqualified deferred compensation⁽²⁾
1.1
—
1.0
—
1.0
—
Contingent consideration⁽³⁾
—
17.5
—
43.2
—
43.2
Total liabilities $ 5.2
$ 17.5
$ 9.3
$ 43.2
$ 5.4
$ 43.2


	October 29, 2022
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Assets
Level 1:
U.S. government securities(1)	$	251.4	$	—	$	—	$	251.4
Level 2:
Foreign currency contracts(5)	$	2.7	$	—	$	—	$	2.7
Company-owned life insurance(3)	0.5		—		—		0.5
Total assets	$	254.6	$	—	$	—	$	254.6
Liabilities
Level 2:

Nonqualified deferred compensation(4)	0.4		—		—		0.4
Total liabilities	$	0.4	$	—	$	—	$	0.4


	January 28, 2023
	Adjusted Cost		Unrealized Gains		Unrealized Losses		Fair Value
Assets
Level 1:
U.S. government securities(1)	$	253.5	$	—	$	(0.9)	$	252.6
Level 2:

Company-owned life insurance(3)	0.5		—		—		0.5
Total assets	$	254.0	$	—	$	(0.9)	$	253.1
Liabilities
Level 2:
Foreign currency contracts(4)	$	5.9	$	—	$	—	$	5.9
Nonqualified deferred compensation(4)	0.4		—		—		0.4
Total liabilities	$	6.3	$	—	$	—	$	6.3

_________________________________________________

(1) Recognized ~~in other non-current assets in our unaudited condensed consolidated balance sheets.~~

We use forward exchange contracts, foreign currency options and cross-currency swaps (together, the “foreign currency contracts”) to manage currency risk primarily related to intercompany loans denominated in non-functional currencies and certain foreign currency assets and liabilities. The foreign currency contracts are not designated as hedges and, therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the re-measurement of related intercompany loans and foreign currency assets and liabilities. The total gross notional value of derivatives related to our foreign currency contracts was $419.1 million, $986.3 million and $586.0 million as of October 28, 2017, October 29, 2016 and January 28, 2017, respectively.

Activity related to the trading of derivative instruments and the offsetting impact of related intercompany and foreign currency assets and liabilities recognized in selling, general and administrative expense is as follows (in millions):

~~We do not use derivative financial instruments for trading or speculative purposes. We are exposed to counterparty credit risk on all of our derivative financial instruments~~cash and cash ~~equivalent investments. We manage counterparty risk according to the guidelines~~equivalents and ~~controls established under~~marketable securities on our ~~comprehensive risk management~~Condensed Consolidated Balance Sheets.

(2) Recognized in marketable securities on our Condensed Consolidated Balance Sheets.

(3) Recognized in other noncurrent assets on our Condensed Consolidated Balance Sheets.

(4) Recognized in accrued liabilities and ~~investment policies. We continuously monitor~~other current liabilities on our ~~counterparty credit risk~~Condensed Consolidated Balance Sheets.

(5) Recognized in prepaid expenses and ~~utilize a number of different counterparties to minimize~~other current assets on our ~~exposure to potential defaults. We do not require collateral under derivative or investment agreements.~~Condensed Consolidated Balance Sheets.

Assets that are Measured at Fair Value on a Nonrecurring Basis

Assets that are measured at fair value on a nonrecurring basis relate primarily to property and equipment, ~~goodwill~~operating lease right-of-use ("ROU") assets and other intangible assets, including digital assets, which are remeasured when the estimated fair value is below its carrying value. ~~For these assets, we do not periodically adjust carrying value to fair value; rather, when~~When we determine that impairment has occurred, the carrying value of the asset is reduced to its fair value. ~~We did not record~~Fair value of digital assets held are based on Level 1 inputs, as described above, and impairment losses for digital assets cannot be recovered for any ~~significant~~subsequent increase in fair value until the sale or disposal of the asset.

As of October 28, 2023, our government-guaranteed low interest French term loans due October 2022 through October 2026 ("French Term Loans") had a carrying value of $30.5 million and a fair value of $24.6 million. The fair values of our French Term Loans were estimated based on a model that discounted future principal and interest payments at interest rates available to us at the end of the period for similar debt of the same maturity, which is a Level 2 input as defined by the fair value hierarchy.

During the nine months ended October 29, 2022, we recognized impairment charges ~~related to~~of $33.9 million associated with digital assets ~~measured at fair value on a nonrecurring basis during~~in SG&A expenses in our Condensed Consolidated Statements of Operations. These charges were recognized in the ~~39 weeks~~United States segment.

During the nine months ended October ~~28, 2017 or October~~ 29, ~~2016.~~

2022, we recognized impairment charges of $2.5 million associated with certain store-level intangible assets to reflect their fair values in our Condensed Consolidated Statements of Operations. These charges were recognized in our Europe segment.

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GAMESTOP CORP.

~~CONDENSED~~ NOTES TO ~~UNAUDITED~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share amounts)

(unaudited)

~~Other Fair Value Disclosures~~

The carrying values of our cash, ~~equivalents,~~restricted cash, net receivables, ~~net,~~ accounts payable and ~~notes payable~~current portion of debt approximate ~~the~~their fair ~~value~~values due to their short-term maturities.

As of October 28, ~~2017, our unsecured 5.50% senior notes due in 2019 had a net carrying value of $347.6~~2023, October 29, 2022 and January 28, 2023, there was $30.5 million, $38.7 million and ~~a fair value~~$39.5 million, respectively, of ~~$358.5~~outstanding debt. Total outstanding debt includes $10.5 million, $9.9 million and $10.8 million of short-term debt as of October 28, 2023, October 29, 2022 and January 28, 2023, respectively, which represents the current portion of the French Term Loans.

During fiscal 2020, our French subsidiary, Micromania SAS, entered into six separate unsecured ~~6.75% senior notes due~~term loans for a total of €40.0 million. In the second quarter of 2021, at the request of Micromania SAS, these term loans were extended for five years, with an amortization plan for the principal starting in ~~2021 had a net carrying value~~October 2022. In connection with the extension, the interest rate increased from zero to 0.7% for three of ~~$469.6~~the term loans totaling €20.0 million, and ~~a fair value of $499.5~~1% for the remaining three term loans totaling €20.0 million. The ~~fair values~~French government has guaranteed 90% of our senior notes were determined based on quoted market prices obtained through an external pricing source which derives its price valuations from daily marketplace transactions, with adjustments to reflect the spreads of benchmark bonds, credit risk and certain other variables. We have determined this to be a Level 2 measurement as all significant inputs into the quote provided by our pricing source are observable in active markets.

~~The carrying value of our long-term debt is comprised as follows (in millions):~~

~~2019 Senior Notes.~~ In September 2014, we issued $350.0 million aggregate principal amount of unsecured 5.50% senior notes due October 1, 2019 (the "2019 Senior Notes"). The 2019 Senior Notes bear interest at the rate of 5.50% per annum with interest payable semi-annually in arrears on April 1 and October 1 of each year beginning on April 1, 2015. We incurred fees and expenses related to the 2019 Senior Notes offering of $6.3 million, which were capitalized during the third quarter of fiscal 2014 and are being amortized as interest expense over the term of the notes. The 2019 Senior Notes were sold in a private placement and are not registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The 2019 Senior Notes were offered in the U.S. to “qualified institutional buyers”loans pursuant to a state guaranteed loan program instituted in connection with the ~~exemption from registration under Rule 144A~~COVID-19 pandemic.

6. Commitments and Contingencies

Letter of ~~the Securities Act and in exempted offshore transactions pursuant to Regulation S under the Securities Act.~~Credit Facilities

~~2021 Senior Notes.~~ In March 2016, we issued $475.0 million aggregate principal amount of unsecured 6.75% senior notes due March 15, 2021 (the "2021 Senior Notes"). The 2021 Senior Notes bear interest at the rate of 6.75% per annum with interest payable semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2016. The net proceeds from the offering were used for general corporate purposes, including acquisitions and dividends. We incurred fees and expenses related to the 2021 Senior Notes offering of $8.1 million, which were capitalized during the first quarter of fiscal 2016 and are being amortized as interest expense over the term of the notes. The 2021 Senior Notes were sold in a private placement and will not be registered under the Securities Act. The 2021 Senior Notes were offered in the U.S. to "qualified institutional buyers" pursuant to the exemption from registration under Rule 144A of the Securities Act and in exempted offshore transactions pursuant to Regulation S under the Securities Act.

The indentures governing the 2019 Senior Notes and the 2021 Senior Notes (together, the "Senior Notes") do not contain financial covenants but do contain covenants which place certain restrictions on us and our subsidiaries, including limitations on asset sales, additional liens, investments, stock repurchases, the incurrence of additional debt and the repurchase of debt that is junior to the Senior Notes. In addition, the indentures restrict payments of dividends to stockholders (other than dividends payable in shares of capital stock) if one of the following conditions exist: (i) an event of default has occurred, (ii) we could not incur additional debt under the general debt covenant of the indentures or (iii) the sum of the proposed dividend and all other dividends and other restricted payments made under the indentures from the date of the indentures governing the Senior Notes exceeds the sum of 50% of consolidated net income plus 100% of net proceeds from capital stock sales and other amounts set forth in and determined as provided in the indentures. These restrictions are subject to exceptions and qualifications, including that we can pay up to $175 million in dividends to stockholders in each fiscal year and we can pay dividends and make other restricted payments in an unlimited amount if our leverage ratio on a pro forma basis after giving effect to the dividend payment and other restricted payments would be less than or equal to 1.0:1.0.

The indentures contain customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the Senior Notes, plus accrued and unpaid interest, if any, may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization occurs.

~~Table of Contents~~

~~GAMESTOP CORP.~~

~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Revolving Credit Facility~~

In January 2011, we entered into a $400 million credit agreement, which we amended and restated on March 25, 2014 and further amended on September 15, 2014 (the “Revolver”). The Revolver is a five-year, asset-based facility that is secured by substantially all of our assets and the assets of our domestic subsidiaries. Availability under the Revolver is subject to a monthly borrowing base calculation. The Revolver includes a $50 millionmaintain uncommitted letter of credit ~~sublimit. The amendments extended~~facilities with certain lenders that provide for the maturity date to March 25, 2019; increased the expansion feature under the Revolver from $150 million to $200 million, subject to certain conditions; and revised certain other terms, including a reductionissuance of ~~the fee we are required to pay on the unused portion of the total commitment amount.~~

Borrowing availability under the Revolver is limited to a borrowing base which allows us to borrow up to 90% of the appraisal value of the inventory, plus 90% of eligible credit card receivables, net of certain reserves. The borrowing base provides for borrowing of up to 92.5% of the appraisal value during the fiscal months of August through October. Lettersletters of credit ~~reduce the amount available to borrow under the Revolver~~and bank guarantees, at times supported by ~~an amount equal to the face value of the letters of credit. Our ability to pay~~ cash dividends, redeem options and repurchase shares is generally permitted, except under certain circumstances, including if either (1) excess availability under the Revolver is less than 30%, or is projected to be within 12 months after such payment or (2) excess availability under the Revolver is less than 15%, or is projected to be within 12 months after such payment, and the fixed charge coverage ratio, as calculated on a pro-forma basis for the prior 12 months, is 1.1:1.0 or less. In the event that excess availability under the Revolver is at any time less than the greater of (1) $30 million or (2) 10% of the lesser of the total commitment or the borrowing base, we will be subject to a fixed charge coverage ratio covenant of 1.0:1.0.

The Revolver places certain restrictions on us and our subsidiaries, including limitations on asset sales, additional liens, investments, loans, guarantees, acquisitions and the incurrence of additional indebtedness. Absent consent from our lenders, we may not incur more than $1 billion of senior secured debt and $750 million of additional unsecured indebtedness to be limited to $250 million in general unsecured obligations and $500 million in unsecured obligations to finance acquisitions valued at $500 million or more.

The per annum interest rate under the Revolver is variable and is calculated by applying a margin (1) for prime rate loans of 0.25% to 0.75% above the highest of (a) the prime rate of the administrative agent, (b) the federal funds effective rate plus 0.50% or (c) the London Interbank Offered (“LIBO”) rate for a 30-day interest period as determined on such day plus 1.00%, and (2) for LIBO rate loans of 1.25% to 1.75% above the LIBO rate. The applicable margin is determined quarterly as a function of our average daily excess availability under the facility. In addition, we are required to pay a commitment fee of 0.25% for any unused portion of the total commitment under the Revolver.collateral. As of October 28, ~~2017, the applicable margin was 0.25% for prime rate loans~~2023, we had approximately $20.5 million of outstanding letters of credit and ~~1.25% for LIBO rate loans.~~other bank guarantees under facilities outside of our $500 million revolving line of credit which matures in November 2026, of which $12.0 million are supported by cash collateral and included in restricted cash.

The Revolver provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with covenants, any material representation or warranty made by us or the borrowers proving to be false in any material respect, certain bankruptcy, insolvency or receivership events affecting us or our subsidiaries, defaults relating to certain other indebtedness, imposition of certain judgments and mergers or the liquidation of the Company or certain of its subsidiaries. During the ~~39 weeks~~nine months ended October 28, 2017, we cumulatively borrowed $373.0 million and repaid $373.0 million under the Revolver. As of October 28, 2017, total availability under the Revolver was $392.4 million, with no outstanding borrowings and outstanding standby letters of credit of $7.5 million. We are currently in compliance with the financial requirements of the Revolver.

~~Amended Revolving Credit Facility~~

On November 20, 2017, we entered into a second amendment to our Revolver (“Amended Revolver”). The Amended Revolver increases the borrowing base capacity up to $420 million and extends the maturity date from March 2019 to November 2022. The Amended Revolver maintains the existing $200 million expansion feature and allows for an incremental $50 million first-in, last-out facility. The applicable margins for prime rate loans are reduced from a range of 0.25% to 0.75% to a range of 0.25% to 0.50% and, for LIBO rate loans, reduced from a range of 1.25% to 1.75% to a range of 1.25% to 1.50%. Other terms and covenants under the Amended Revolver remain substantially unchanged.

~~Luxembourg Line of Credit~~

In September 2007, our Luxembourg subsidiary entered into a discretionary $20.0 million Uncommitted Line of Credit (the “Line of Credit”) with Bank of America. There is no term associated with the Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit is available to our foreign subsidiaries for use primarily as a bank overdraft facility for short-term liquidity needs and for the issuance of bank guarantees and letters of credit to support operations. As of October 28, 2017, there were no cash overdrafts outstanding under the Line of Credit and bank guarantees outstanding totaled $9.9 million.

~~Table of Contents~~

~~GAMESTOP CORP.~~

~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~During the 39 weeks ended October 28, 2017,~~2023, there were no material changes to our commitments as disclosed in our ~~2016~~2022 Annual Report on Form 10-K.

In the ordinary course of business, we are, from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions, ~~and~~ consumer class ~~actions.~~actions, violent acts, and other conflicts. We may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations or liquidity.

Certain of our French subsidiaries have been under audit by the French Tax Administration (the "FTA") for fiscal years 2008 through 2015. We received tax reassessment notices on December 23, 2015 and April 4, 2016, pursuant to which the FTA asserted that the French subsidiaries were ineligible to claim certain tax deductions from November 4, 2008, through January 31, 2013, resulting in a potential additional tax charge of approximately €85.5 million. We may receive additional tax reassessments in material amounts for subsequent fiscal years. We filed a response to each reassessment and intend to vigorously contest the reassessments through administrative procedures. If we are unable to resolve this matter through administrative remedies at the FTA, we plan to pursue judicial remedies. We believe our tax positions will be sustained and have not taken a reserve for any potential adjustment based on the reassessment. If we were not to prevail, then the adjustment to our income tax provision could be material.

Basic net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the ~~weighted- average~~weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted-average number of common shares outstanding and potentially dilutive securities outstanding during the period. Potentially dilutive securities include stock options, unvested restricted stock and unvested restricted stock units outstanding during the period, using the treasury stock method. Potentially dilutive securities are excluded from the computations of diluted earnings per share if their effect would be ~~antidilutive.~~anti-dilutive. A net loss from continuing operations causes all potentially dilutive securities to be anti-dilutive.

AThe following table presents a reconciliation of shares used in calculating basic and diluted net ~~income~~loss per common ~~share is as follows (in~~share:


	Three Months Ended		Nine Months Ended
	October 28, 2023	October 29, 2022	October 28, 2023	October 29, 2022
Weighted-average common shares outstanding	305.3	304.2	304.9	304.1
Dilutive effect of restricted stock awards	—	—	—	—
Weighted-average diluted common shares	305.3	304.2	304.9	304.1

Anti-dilutive shares:
Restricted stock units	4.1	7.0	4.1	7.0
Restricted stock	—	0.3	—	0.3

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GAMESTOP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share ~~data):~~amounts)

(unaudited)

13 Weeks Ended 39 Weeks Ended
October 28,
2017 October 29,
2016 October 28,
2017 October 29,
2016
Net income $ 59.4
$ 50.8
$ 140.6
$ 144.5

Basic weighted average common shares outstanding 101.5
103.7
101.4
103.8
Dilutive effect of stock options and restricted stock awards —
0.3
0.1
0.4
Diluted weighted average common shares outstanding 101.5
104.0
101.5
104.2

Basic earnings per share $ 0.59
$ 0.49
$ 1.39
$ 1.39
Diluted earnings per share $ 0.59
$ 0.49
$ 1.39
$ 1.39

Anti-dilutive stock options and restricted stock awards 2.0
1.2
2.1
1.3
8. Segment Information

~~Table of Contents~~

~~GAMESTOP CORP.~~

~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

~~The tables below set forth net sales, percentages of total net sales, gross profit and gross profit percentages by significant product category for the periods indicated (dollars in millions).~~

New video game hardware⁽¹⁾

Technology Brands⁽²⁾

13 Weeks Ended 39 Weeks Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016

Gross
Profit

Gross
Profit
Percent

Gross
Profit

Gross
Profit
Percent

Gross
Profit

Gross
Profit
Percent

Gross
Profit

Gross
Profit
Percent
New video game hardware⁽¹⁾
$ 36.8
11.9 % $ 37.3
13.1 % $ 101.6
10.7 % $ 95.6
11.7 %
New video game software 155.9
24.0
150.0
24.3
351.4
22.8
376.0
24.0
Pre-owned and value video game products 199.7
43.6
218.0
46.4
679.0
45.7
725.2
46.1
Video game accessories 48.5
35.6
49.6
31.8
152.1
33.3
152.4
34.8
Digital 34.1
91.7
35.0
78.3
108.1
84.6
104.7
84.6
Technology Brands⁽²⁾
141.4
72.8
159.6
73.8
424.9
72.8
380.0
68.1
Collectibles 52.7
38.1
39.7
36.3
131.1
34.9
103.0
36.6
Other⁽³⁾
20.3
31.5
19.0
30.7
67.4
33.0
64.5
31.1
Total $ 689.4
34.7 % $ 708.2
36.1 % $ 2,015.6
35.2 % $ 2,001.4
36.0 %

Includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving ~~Game Informer~~ ~~magazine in print form.~~

~~Table of Contents~~

~~GAMESTOP CORP.~~

~~CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~

We ~~report~~operate our business in four geographic ~~Video Game Brands~~ segments: United States, Canada, Australia and ~~Europe; and a Technology Brands segment, which includes the operations of our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business.~~ Europe.

We ~~identify~~identified segments based on a combination of geographic areas and management responsibility. Each of the segments includes significant retail operations with all Video Game Brands stores engaged in the sale of new and pre-owned video game hardware, software, accessories and collectibles, and Technology Brands stores engaged in the sale of wireless products and services and other consumer electronics. Our Video Game Brands segments also include stand-alone collectibles stores. Segment results for the United States include retail operations in 50 ~~states, the District of Columbia,~~states; our ecommerce website www.gamestop.com; our GameStop ProTM rewards program; and ~~Guam;~~ our ~~electronic commerce websites www.gamestop.com~~digital asset wallet and ~~www.thinkgeek.com;~~ ~~Game Informer~~ ~~magazine;~~NFT marketplace. The United States segment also includes general and ~~Kongregate, a web and mobile gaming platform which we sold~~administrative expenses related to our corporate offices in ~~July 2017 (see Note 2).~~Grapevine, Texas. Segment results for Canada include retail and ~~e-commerce~~ecommerce operations in ~~Canada and segment~~Canada. Segment results for Australia include retail and ~~e-commerce~~ecommerce operations in Australia and New Zealand. Segment results for Europe include retail and ~~e-commerce~~ecommerce operations in ~~10 European~~six countries. ~~The Technology Brands segment includes retail operations in the United States.~~ We measure segment profit using operating earnings, which is defined as income (loss) from ~~continuing~~ operations before ~~intercompany royalty fees,~~ net interest ~~expense~~income and income taxes. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were no material intersegment sales during the ~~13 weeks~~three and ~~39 weeks~~nine months ended October 28, ~~2017~~2023 and October 29, ~~2016, respectively.~~2022.

~~The reconciliation of segment operating earnings (loss) to earnings before income taxes~~


	United States		Canada		Australia		Europe		Consolidated
Three Months Ended October 28, 2023
Net sales	$	693.1	$	61.3	$	102.2	$	221.7	$	1,078.3
Operating earnings (loss)	(9.1)		(3.1)		(5.2)		2.7		(14.7)
Three Months Ended October 29, 2022
Net sales	$	799.1	$	67.9	$	122.8	$	196.6	$	1,186.4
Operating loss	(83.1)		(4.0)		(0.9)		(8.3)		(96.3)


	United States		Canada		Australia		Europe		Consolidated
Nine Months Ended October 28, 2023
Net sales	$	2,285.7	$	190.0	$	341.7	$	661.8	$	3,479.2
Operating loss	(30.6)		(9.9)		(15.0)		(34.2)		(89.7)
Nine Months Ended October 29, 2022
Net sales	$	2,587.9	$	207.1	$	363.3	$	542.5	$	3,700.8
Operating loss	(308.7)		(9.0)		(1.9)		(38.2)		(357.8)

Our interim tax provision was determined using an estimated annual effective tax rate and adjusted for ~~13 and 39 weeks~~discrete taxable events and/or adjustments that have occurred during the nine months ended October 28, ~~2017 and~~2023.

We recognized an income tax benefit of $1.2 million, or 27.9%, for the three months ended October 28, 2023 compared to an income tax expense of $2.1 million, or (2.3)%, for the three months ended October 29, ~~2016~~2022. Our effective income tax rate for the three months ended October 28, 2023 is due to the recognition of tax benefits on certain current period losses partially offset by forecasted income taxes due in certain foreign and state jurisdictions in which we operate. Our effective income tax rate for the three months ended October 29, 2022 is primarily due to not recognizing tax benefits on certain current period losses as ~~follows (in millions):~~ well as forecasted income taxes due in certain foreign and state jurisdictions in which we operate.

We recognized an income tax benefit of $1.5 million, or 2.6%, for the nine months ended October 28, 2023 compared to an income tax expense of $6.8 million, or (1.9)%, for the nine months ended October 29, 2022. Our effective income tax rate for the nine months ended October 28, 2023 is due to the recognition of tax benefits on certain current period losses partially offset by forecasted income taxes due in certain foreign and state jurisdictions in which we operate. Our effective income tax rate for the nine months ended October 29, 2022 is primarily due to not recognizing tax benefits on certain current period losses as well as forecasted income taxes due in certain foreign and state jurisdictions in which we operate.

13 weeks ended October 28, 2017
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 1,188.0
$ 97.1
$ 156.2
$ 353.1
$ 194.2
$ 1,988.6
Operating earnings 52.2
3.2
5.3
8.9
18.0
87.6
Interest income 0.2
Interest expense (14.1 )
Earnings before income taxes $ 73.7

Table of Contents

13 weeks ended October 29, 2016
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 1,195.2
$ 86.8
$ 139.4
$ 321.5
$ 216.3
$ 1,959.2
Operating earnings 59.1
3.9
3.5
8.8
23.5
98.8
Interest expense (14.8 )
Earnings before income taxes $ 84.0

39 weeks ended October 28, 2017
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 3,545.3
$ 256.9
$ 438.2
$ 897.8
$ 583.9
$ 5,722.1
Operating earnings (loss) 175.3
5.1
10.2
(2.4 ) 44.1
232.3
Interest income 0.4
Interest expense (42.6 )
Earnings before income taxes $ 190.1

39 weeks ended October 29, 2016
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 3,586.5
$ 231.2
$ 376.6
$ 810.2
$ 558.0
$ 5,562.5
Operating earnings (loss) 204.7
8.9
7.0
(5.7 ) 56.2
271.1
Interest income 0.5
Interest expense (39.7 )
Earnings before income taxes $ 231.9



~~ITEM 2.~~	ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information contained in our ~~unaudited~~ condensed consolidated financial statements, including the notes ~~thereto.~~thereto set forth in Part I, Item 1 of this Form 10-Q. Statements regarding future economic performance, management’s plans and objectives, and any statements concerning assumptions related to the foregoing contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations constitute forward-looking statements. ~~See~~These statements are only predictions based on current expectations and assumptions and involve known and unknown risks, uncertainties and other factors that may cause our ~~Annual Report~~or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements included in this Form 10-Q are based upon information available to us as of the filing date of this Form 10-Q, and we undertake no obligation to update or revise any of these forward-looking statements for any reason, whether as a result of new information, future events or otherwise after the date of this Form 10-Q, except as required by law. You should not place undue reliance on ~~Form 10-K, for~~these forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Although we believe that the ~~fiscal year ended January 28, 2017 filed with the Securities and Exchange Commission on March 27, 2017 (the “2016 Annual Report on Form 10-K”), including the~~expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Certain factors, ~~disclosed under “Item 1A. Risk Factors,” as well as “Disclosure Regarding Forward-looking Statements” and “Item 1A. Risk Factors” below, for certain factors that~~which may cause actual results to vary materially from these forward-looking ~~statements.~~statements, accompany such statements and are discussed in our 2022 Annual Report on Form 10-K, including the disclosures under Part I, Item 1A "Risk Factors" and Part II, Item 1A "Risk Factors" of this Form 10-Q, our Q1 fiscal 2023 Quarterly Report on Form 10-Q, and our Q2 fiscal 2023 Quarterly Report on Form 10-Q.

OVERVIEW

GameStop Corp. (“GameStop,” “we,” “us,” “our,” or the “Company”), a Delaware corporation established in 1996, is a ~~global family~~leading specialty retailer offering games and entertainment products through its thousands of ~~specialty retail brands that makes the most popular technologies affordable~~stores and simple. Within our family of brands, we are the world’s largest omnichannel video game retailer, the largest AT&T® (“AT&T”) authorized retailer, the largest Apple© (“Apple”) certified products reseller, a Cricket Wireless_TM reseller (“Cricket,” an AT&T brand) and the owner of www.thinkgeek.com, one of the world’s largest sellers of collectible pop-culture themed products. As of October 28, 2017, GameStop's retail network and family of brands include 7,462 company-operated stores in the United States, Australia, Canada and Europe.ecommerce platforms.

Europe. Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. ~~The fiscal year ending February 3, 2018 ("fiscal 2017")~~Fiscal 2023 consists of 53 weeks ~~and the~~ ending February 3, 2024 (“fiscal ~~year~~2023"). Fiscal 2022 consisted of 52 weeks ended on January 28, ~~2017 ("~~2023. All three and nine month periods presented herein contain 13 and 39 weeks, respectively. All references to years, quarters and months relate to fiscal ~~2016") consists~~periods rather than calendar periods. The discussion and analysis of ~~52 weeks.~~our results of operations refers to continuing operations unless otherwise noted. Our business, like that of many retailers, is seasonal, with the major portion of the net sales ~~and operating profit~~ realized during the fourth ~~fiscal~~ quarter, which includes the holiday selling season.

~~Growth~~

BUSINESS PRIORITIES

The initial phase of GameStop's transformation largely occurred over the course of 2021 and the first half of 2022. This period was primarily focused on rebuilding the Company's decaying infrastructure and strengthening GameStop's value proposition, including investing in the ~~video game industry is generally driven by the introduction of~~Company's enterprise systems, technology capabilities, store leaders and associates, and product catalog and offerings.

GameStop entered a new technology. Gaming consoles are typically launched in cycles as technological developments provide significant improvements in graphics, audio quality, game play, internet connectivity and other entertainment capabilities beyond video gaming. The current generation of consoles include the Sony PlayStation 4 (2013), Microsoft Xbox One (2013) and the Nintendo Switch (March 2017). In 2016, Sony and Microsoft released refreshes to the PlayStation 4 and Xbox One, respectively, and Sony also released the PlayStation VR. In November 2017, Microsoft released a further enhanced versionphase of its ~~current generation console,~~transformation during the ~~Xbox One X.~~

~~We expect that future growth in the video game industry will also be driven by the sale~~second half of video games delivered in digital form and the expansion of other forms of gaming. We currently sell various types of products that relate to the digital category, including digitally downloadable content (“DLC”), full game downloads, Xbox LIVE, PlayStation Plus and Nintendo network points cards, as well as prepaid digital and prepaid subscription cards. We have made significant investments in e-commerce and in-store and website functionality to enable our customers to access digital content easily and facilitate the digital sales and delivery process. We plan to continue to invest in these types of processes and channels to grow our digital sales base and enhance our market leadership position in the video game industry and in the digital aggregation and distribution category.

We continue to diversify our business by seeking out opportunities to extend our core competencies to other businesses and retail categories, including mobile and consumer electronics and collectibles, to continue to grow and to help mitigate the financial impact from the cyclical nature of the video game console cycle and we regularly evaluate potential acquisition opportunities, some of which could be material. From fiscal 2013 through October 28, 2017, we have grown our store count of AT&T authorized retailers by over 1,200 stores, primarily through acquisitions. In 2014, we introduced stand-alone collectibles stores and expanded the selection of collectible products in our stores. To further expand our collectibles business, we acquired ThinkGeek in 2015, and we plan to continue investing in this category going forward. We continue to seek to invest in other retail concepts and product lines with the intention of further diversifying our business.

In our discussion of the results of operations, we refer to comparable store sales, which is a measure commonly used in the retail industry and indicates store performance by measuring the growth in sales for certain stores for a particular period over the corresponding period in the prior year. Our comparable store sales are comprised of sales from our Video Game Brands stores, including stand-alone collectible stores, operating for at least 12 full months as well as sales related to our websites and sales we earn from sales of pre-owned merchandise to wholesalers or dealers. Comparable store sales for our international operating segments exclude the effect of changes in foreign currency exchange rates. The calculation of comparable store sales for 13 weeks and 39 weeks ended October 28, 2017 compares the 13 weeks and 39 weeks for the period ended October 28, 2017 to the most closely comparable weeks for the prior year. The method of calculating comparable store sales varies across the retail industry.2022. As a result, GameStop is focused on three overarching goals: establishing an omnichannel retail experience, achieving profitability, and leveraging brand equity to support growth.

We are taking the following steps, with a significant emphasis on cost containment:

•Improving margins through operational discipline and increased emphasis on higher margin collectibles and pre-owned product categories;

•Ensuring the Company's cost structure is sustainable relative to revenue, including taking steps to optimize our ~~method~~workforce to operate efficiently and nimbly;

•Prudently increasing the size of ~~calculating comparable store sales~~our addressable market by growing our product catalog across PC gaming, collectibles, consumer electronics, toys, augmented reality, virtual reality and other categories that represent natural extensions of our business; and

•Sustaining a superior customer experience supported by a seamless in-store and ecommerce experience with speedy delivery to our customers.

As part of our efforts to achieve sustained profitability, we continue to evaluate our portfolio of assets to validate their strategic and financial fit and to eliminate redundancies. During the first quarter of fiscal 2023, we began the process of exiting our operations in Ireland, with all stores in the region closing in the second quarter of fiscal 2023. While we expect our cost containment efforts to yield reductions in SG&A expenses in the long term, we have incurred and may ~~not~~continue to incur severance and other non-recurring costs related to these efforts in the short term.

Table of Contents

RECENT DEVELOPMENTS

On December 5, 2023, the Board of Directors approved the Investment Policy. The Board of Directors has delegated authority to manage the Company’s portfolio of securities investments to the Company’s Chairman of the Board of Directors and Chief Executive Officer, Ryan Cohen, together with such assistants and management committees he may engage. The Company’s investments will be made in accordance with the guidelines set forth in the Investment Policy. The Board may also approve non-conforming investments and/or, in consultation with the Chief Executive Officer, modify the Investment Policy from time to time.

Mr. Cohen directs the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Depending on certain market conditions and various risk factors, Mr. Cohen, in his personal capacity or through affiliated investment vehicles, may at times invest in the same ~~as other retailers’ methods. We believe our calculation~~

companies in which the Company invests. Such investments align the interests of ~~comparable store sales best represents our strategy as an omnichannel retailer that provides its consumers several ways to access its products.~~

~~Our Technology Brands stores are excluded from~~ the ~~calculation~~Company with the interests of ~~comparable store sales. We do not consider comparable store sales to be a meaningful metric~~related parties because it places the personal resources of Mr. Cohen at risk in evaluating the performance of our Technology Brands stores due to the frequently changing nature of revenue streams and commission structures associated with this segment of our business. Instead, we measure the performance of our Technology Brands stores by using comparable store gross profit, which is calculated using a similar methodology as comparable stores sales, but replacing sales with gross profit in the calculation. Our method of calculating comparable store gross profit may not besubstantially the same manner as ~~other retailers’ methods.~~the Company in connection with investment decisions made on behalf of the Company.

Table of Contents

CONSOLIDATED RESULTS OF OPERATIONS

The following table ~~sets forth~~presents certain statement of operations items ~~(in millions)~~ and as a percentage of net ~~sales, for the periods indicated:~~ sales:

13 Weeks Ended 39 Weeks Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016
Amount
Percent of
Net Sales
Amount
Percent of
Net Sales
Amount Percent of
Net Sales Amount Percent of
Net Sales
Net sales $ 1,988.6
100.0 % $ 1,959.2
100.0 % $ 5,722.1
100.0 % $ 5,562.5
100.0 %
Cost of sales 1,299.2
65.3
1,251.0
63.9
3,706.5
64.8
3,561.1
64.0
Gross profit 689.4
34.7
708.2
36.1
2,015.6
35.2
2,001.4
36.0
Selling, general and administrative expenses 565.1
28.5
567.1
28.9
1,671.0
29.1
1,606.3
28.9
Depreciation and amortization 36.7
1.8
42.3
2.2
112.3
2.0
124.0
2.2
Operating earnings 87.6
4.4
98.8
5.0
232.3
4.1
271.1
4.9
Interest expense, net 13.9
0.7
14.8
0.7
42.2
0.7
39.2
0.7
Earnings before income tax expense 73.7
3.7
84.0
4.3
190.1
3.4
231.9
4.2
Income tax expense 14.3
0.7
33.2
1.7
49.5
0.9
87.4
1.6
Net income $ 59.4
3.0 % $ 50.8
2.6 % $ 140.6
2.5 % $ 144.5
2.6 %

We include purchasing, receiving and distribution costs in selling, general and administrative expenses ("SG&A") in the statement of operations. We include processing fees associated with purchases made by check and credit cards in cost of sales in the statement of operations. As a result of these classifications, our gross margins are not comparable to those retailers that include purchasing, receiving and distribution costs in cost of sales and include processing fees associated with purchases made by check and credit cards in SG&A. The net effect of these classifications as a percentage of sales has not historically been material.


	Three Months Ended
	October 28, 2023				October 29, 2022				Change
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		$		%
Net sales	$	1,078.3	100.0	%	$	1,186.4	100.0	%	$	(108.1)	(9.1)	%
Cost of sales	796.5		73.9		894.8		75.4		(98.3)		(11.0)
Gross profit	281.8		26.1		291.6		24.6		(9.8)		(3.4)
Selling, general and administrative expenses	296.5		27.5		387.9		32.7		(91.4)		(23.6)


Operating loss	(14.7)		(1.4)		(96.3)		(8.1)		81.6		84.7
Interest income, net	(12.9)		(1.2)		(3.7)		(0.3)		(9.2)		248.6
Other loss, net	2.5		0.2		—		—		2.5		100.0
Loss before income taxes	(4.3)		(0.4)		(92.6)		(7.8)		88.3		95.4
Income tax (benefit) expense	(1.2)		(0.1)		2.1		0.2		(3.3)		(157.1)
Net loss	$	(3.1)	(0.3)	%	$	(94.7)	(8.0)	%	$	91.6	96.7	%

	Nine Months Ended
	October 28, 2023				October 29, 2022				Change
	Amount		Percent of Net Sales		Amount		Percent of Net Sales		$		%
Net sales	$	3,479.2	100.0	%	$	3,700.8	100.0	%	$	(221.6)	(6.0)	%
Cost of sales	2,604.2		74.9		2,828.5		76.4		(224.3)		(7.9)
Gross profit	875.0		25.1		872.3		23.6		2.7		0.3
Selling, general and administrative expenses	964.7		27.7		1,227.6		33.2		(262.9)		(21.4)
Asset impairments	—		—		2.5		0.1		(2.5)		(100.0)
Operating loss	(89.7)		(2.6)		(357.8)		(9.7)		268.1		74.9
Interest income, net	(34.2)		(1.0)		(3.3)		(0.1)		(30.9)		936.4
Other loss, net	2.4		0.1		—		—		2.4		100.0
Loss before income taxes	(57.9)		(1.7)		(354.5)		(9.6)		296.6		83.7
Income tax (benefit) expense	(1.5)		—		6.8		0.2		(8.3)		(122.1)
Net loss	$	(56.4)	(1.7)	%	$	(361.3)	(9.8)	%	$	304.9	84.4	%

The Three and Nine Months Ended October 28, 2023 Compared to the Three and Nine Months Ended October 29, 2022

Net Sales

The following ~~tables set forth,~~table presents net sales by significant product ~~category,~~category:


	Three months ended								Nine Months Ended
	October 28, 2023				October 29, 2022				October 28, 2023				October 29, 2022
	Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales
Hardware and accessories	$	579.4	53.7	%	$	627.0	52.8	%	$	1,902.2	54.7	%	$	1,897.2	51.3	%
Software	321.3		29.8		352.1		29.7		1,056.7		30.3		1,152.2		31.1
Collectibles	177.6		16.5		207.3		17.5		520.3		15.0		651.4		17.6
Total net sales	$	1,078.3	100.0	%	$	1,186.4	100.0	%	$	3,479.2	100.0	%	$	3,700.8	100.0	%

Table of Contents

The following table presents net sales ~~and gross profit information~~by reportable segment:


	Three Months Ended								Nine Months Ended
	October 28, 2023				October 29, 2022				October 28, 2023				October 29, 2022
	Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales		Net Sales		Percent of Net Sales
United States	$	693.1	64.3	%	$	799.1	67.4	%	$	2,285.7	65.7	%	$	2,587.9	69.9	%
Canada	61.3		5.7		67.9		5.7		190.0		5.5		207.1		5.6
Australia	102.2		9.5		122.8		10.4		341.7		9.8		363.3		9.8
Europe	221.7		20.5		196.6		16.5		661.8		19.0		542.5		14.7
Total net sales	$	1,078.3	100.0	%	$	1,186.4	100.0	%	$	3,479.2	100.0	%	$	3,700.8	100.0	%

Net sales decreased $108.1 million, or 9.1%, for the ~~periods indicated (dollars in millions):~~

13 Weeks Ended 39 Weeks Ended
October 28, 2017 October 29, 2016 October 28, 2017 October 29, 2016

Net
Sales

Percent
of Total

Net
Sales

Percent
of Total

Net
Sales

Percent
of Total

Net
Sales

Percent
of Total
New video game hardware⁽¹⁾
$ 309.5
15.6 % $ 284.4
14.5 % $ 947.8
16.6 % $ 813.7
14.6 %
New video game software 649.9
32.7
616.6
31.5
1,539.7
26.9
1,566.0
28.2
Pre-owned and value video game products 458.5
23.0
470.0
24.0
1,486.5
26.0
1,573.5
28.3
Video game accessories 136.4
6.9
156.0
8.0
456.6
8.0
438.2
7.9
Digital 37.2
1.9
44.7
2.3
127.8
2.2
123.8
2.2
Technology Brands⁽²⁾
194.2
9.8
216.3
11.0
583.9
10.2
558.0
10.0
Collectibles 138.4
6.9
109.4
5.6
375.4
6.6
281.7
5.1
Other⁽³⁾
64.5
3.2
61.8
3.1
204.4
3.5
207.6
3.7
Total $ 1,988.6
100.0 % $ 1,959.2
100.0 % $ 5,722.1
100.0 % $ 5,562.5
100.0 %


~~(1)~~	~~Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.~~


~~(2)~~	Includes mobile and consumer electronics sold through our Technology Brands segment, which includes the operations of our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business.


~~(3)~~	Includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving ~~Game Informer~~ ~~magazine in print form.~~

~~13 weeks~~three months ended October 28, ~~2017~~2023 compared ~~with~~to the ~~13 weeks ended October 29, 2016~~prior year.

13 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
($ in millions)
Net sales $ 1,988.6
$ 1,959.2
$ 29.4
1.5 %
Cost of sales 1,299.2
1,251.0
48.2
3.9
Gross profit 689.4
708.2
(18.8 ) (2.7 )
Selling, general and administrative expenses 565.1
567.1
(2.0 ) (0.4 )
Depreciation and amortization 36.7
42.3
(5.6 ) (13.2 )
Operating earnings 87.6
98.8
(11.2 ) (11.3 )
Interest expense, net 13.9
14.8
(0.9 ) (6.1 )
Earnings before income tax expense 73.7
84.0
(10.3 ) (12.3 )
Income tax expense 14.3
33.2
(18.9 ) (56.9 )
Net income $ 59.4
$ 50.8
$ 8.6
16.9 %

13 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
Net Sales: ($ in millions)
New video game hardware⁽¹⁾
$ 309.5
$ 284.4
$ 25.1
8.8 %
New video game software 649.9
616.6
33.3
5.4
Pre-owned and value video game products 458.5
470.0
(11.5 ) (2.4 )
Video game accessories 136.4
156.0
(19.6 ) (12.6 )
Digital 37.2
44.7
(7.5 ) (16.8 )
Technology Brands⁽²⁾
194.2
216.3
(22.1 ) (10.2 )
Collectibles 138.4
109.4
29.0
26.5
Other⁽³⁾
64.5
61.8
2.7
4.4
Total $ 1,988.6
$ 1,959.2
$ 29.4
1.5 %

13 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
Gross Profit: ($ in millions)
New video game hardware⁽¹⁾
$ 36.8
$ 37.3
$ (0.5 ) (1.3 )%
New video game software 155.9
150.0
5.9
3.9
Pre-owned and value video game products 199.7
218.0
(18.3 ) (8.4 )
Video game accessories 48.5
49.6
(1.1 ) (2.2 )
Digital 34.1
35.0
(0.9 ) (2.6 )
Technology Brands⁽²⁾
141.4
159.6
(18.2 ) (11.4 )
Collectibles 52.7
39.7
13.0
32.7
Other⁽³⁾
20.3
19.0
1.3
6.8
Total $ 689.4
$ 708.2
$ (18.8 ) (2.7 )%


~~(1)~~	~~Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.~~


~~(2)~~	Includes mobile and consumer electronics sold through our Technology Brands segment, which includes the operations of our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business.


~~(3)~~	Includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving ~~Game Informer~~ ~~magazine in print form.~~

~~Net Sales~~

~~Net sales increased $29.4 million, or 1.5%, for~~During the ~~13 weeks~~three months ended October 28, ~~2017~~2023, net sales in our Australia, United States, and Canada segments decreased by 16.8%, 13.3%, and 9.7%, respectively, compared to the ~~13 weeks ended October 29, 2016.~~prior year, while net sales in our Europe segment increased by 12.8% compared to the prior year. The increase in net sales ~~was primarily attributable to~~in our Europe segment resulted from decreased supply constraints in the ~~positive impact of foreign exchange rate fluctuations of $30.2 million and an increase~~current year. The decrease in ~~comparable store~~consolidated net sales ~~of 1.9%~~for the three months ended October 28, 2023 compared to the prior year ~~quarter. The increase in comparable store sales~~ was primarily ~~driven~~attributable to a $47.6 million, or 7.6%, decline in the sale of hardware and accessories, a $29.7 million, or 14.3%, decline in sale of collectibles, and a $18.0 million, or 7.5%, decline in the sale of new software.

Net sales decreased $221.6 million, or 6.0%, for the nine months ended October 28, 2023 compared to the prior year.

During the nine months ended October 28, 2023, net sales in our United States, Canada, and Australia segments decreased by ~~an increase~~11.7%, 8.3%, and 5.9%, respectively, compared to the prior year, while net sales in our Europe segment increased by 22.0% compared to the prior year. The decrease in consolidated net sales for the nine months ended October 28, 2023 compared to the prior year was primarily attributable to a $131.1 million, or 20.1%, decline in sales of ~~new~~collectibles, a $95.5 million, or 8.3%, decline in the sales of software, and a $98.9 million, or 18.1%, decline in the sales of video game ~~software, collectibles, and new video game hardware. The increase in sales in collectibles are a result of the Company's diversification strategy.~~

~~The increase in net sales was due to the following:~~

New video game software sales increased $33.3 million, or 5.4%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, primarily due to a stronger title line-up in the current year quarter, including those associated with the Nintendo Switch.

Collectibles sales increased $29.0 million, or 26.5%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, due to the growth of collectibles sales in our Video Game Brands stores and the growth in the number of stand-alone collectibles stores.

New video game hardware sales increased $25.1 million, or 8.8%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, primarily due to the launch of the Nintendo Switch in March 2017, which wasaccessories, partially offset by ~~decreases~~a $122.1 million or, 15.1%, increase in the sales of ~~other consoles as their cycles mature.~~

~~The increases described above were partially offset by the following:~~

~~Technology Brands sales~~new hardware resulting from decreased ~~$22.1 million, or 10.2%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016. The decrease is primarily due to a slowdown~~supply constraints in ~~the wireless upgrade cycle and changes in commission income~~our Europe segment in the current year.

~~Video game accessories decreased $19.6 million, or 12.6%, for~~Gross Profit

During the ~~13 weeks~~three months ended October 28, ~~2017~~2023, gross profit decreased $9.8 million, or 3.4%, compared to the ~~13 weeks ended October 29, 2016, due to the launch of the PlayStation VR in the~~ prior ~~year quarter.~~

Pre-owned and value video game product sales decreased $11.5 million, or 2.4%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, primarily due to a decrease in store traffic.

~~Cost of Sales~~

Cost of sales increased $48.2 million, or 3.9%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, primarily as a result of the change in net sales discussed above as well as the changes in gross profit discussed below.

year. Gross ~~Profit~~

~~Gross profit decreased $18.8 million, or 2.7%, for the 13 weeks ended October 28, 2017 compared to the 13 weeks ended October 29, 2016, and gross~~ profit as a percentage of net sales ~~decreased~~increased to ~~34.7% in the current year quarter~~26.1%, compared to ~~36.1%~~24.6% in the prior ~~year quarter.~~year. The decrease in gross profit ~~was driven by decreases of $18.3 million~~is primarily attributable to the decrease in ~~pre-owned and value video game products and $18.2 million~~net sales, as further outlined in ~~Technology Brands,~~the net sales commentary, partially offset by ~~increases in collectibles of $13.0~~a $11.2 million, ~~and new video game software of $5.9 million.~~

~~The net~~or 28.3%, decrease in freight expenses resulting from added cost optimizations.

During the nine months ended October 28, 2023, gross profit increased $2.7 million, or 0.3%, compared to the prior year. Gross profit as a percentage of net sales ~~was primarily due~~increased to a shift in product mix between categories and a decrease in gross profit percentage in pre-owned and value video game products. The gross profit in pre-owned and value video game products decreased to 43.6% in the 13 weeks ended October 28, 2017 from 46.4% in the 13 weeks ended October 29, 2016, primarily due to promotional activity associated with pre-owned hardware.

~~Selling, General and Administrative Expenses~~

~~SG&A was $565.1 million for the 13 weeks ended October 28, 2017 which was flat~~25.1%, compared to ~~$567.1 million for the 13 weeks ended October 29, 2016.~~

~~Income Tax Expense~~

Income tax expense was $14.3 million, representing an effective tax rate of 19.4%, for the 13 weeks ended October 28, 2017, compared to $33.2 million, representing an effective tax rate of 39.5%, for the 13 weeks ended October 29, 2016. The decrease in the effective income tax rate compared to the same period in the prior year was primarily driven by certain discrete tax items recognized in the current year quarter and the relative mix of earnings across the jurisdictions within which we operate.

~~Operating Earnings and Net Income~~

The factors described above led to operating earnings of $87.6 million for the 13 weeks ended October 28, 2017, or a $11.2 million decrease from operating earnings of $98.8 million for the 13 weeks ended October 29, 2016. Net income was $59.4 million for the 13 weeks ended October 28, 2017, which represented a 16.9% increase from net income of $50.8 million for the 13 weeks ended October 29, 2016.

~~39 weeks ended October 28, 2017 compared with the 39 weeks ended October 29, 2016~~

39 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
($ in millions)
Net sales $ 5,722.1
$ 5,562.5
$ 159.6
2.9 %
Cost of sales 3,706.5
3,561.1
145.4
4.1
Gross profit 2,015.6
2,001.4
14.2
0.7
Selling, general and administrative expenses 1,671.0
1,606.3
64.7
4.0
Depreciation and amortization 112.3
124.0
(11.7 ) (9.4 )
Operating earnings 232.3
271.1
(38.8 ) (14.3 )
Interest expense, net 42.2
39.2
3.0
7.7
Earnings before income tax expense 190.1
231.9
(41.8 ) (18.0 )
Income tax expense 49.5
87.4
(37.9 ) (43.4 )
Net income $ 140.6
$ 144.5
$ (3.9 ) (2.7 )%

39 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
Net Sales: ($ in millions)
New video game hardware⁽¹⁾
$ 947.8
$ 813.7
$ 134.1
16.5 %
New video game software 1,539.7
1,566.0
(26.3 ) (1.7 )
Pre-owned and value video game products 1,486.5
1,573.5
(87.0 ) (5.5 )
Video game accessories 456.6
438.2
18.4
4.2
Digital 127.8
123.8
4.0
3.2
Technology Brands⁽²⁾
583.9
558.0
25.9
4.6
Collectibles 375.4
281.7
93.7
33.3
Other⁽³⁾
204.4
207.6
(3.2 ) (1.5 )
Total $ 5,722.1
$ 5,562.5
$ 159.6
2.9 %

39 Weeks Ended Change
October 28, 2017 October 29, 2016 $ %
Gross Profit: ($ in millions)
New video game hardware⁽¹⁾
$ 101.6
$ 95.6
$ 6.0
6.3 %
New video game software 351.4
376.0
(24.6 ) (6.5 )
Pre-owned and value video game products 679.0
725.2
(46.2 ) (6.4 )
Video game accessories 152.1
152.4
(0.3 ) (0.2 )
Digital 108.1
104.7
3.4
3.2
Technology Brands⁽²⁾
424.9
380.0
44.9
11.8
Collectibles 131.1
103.0
28.1
27.3
Other⁽³⁾
67.4
64.5
2.9
4.5
Total $ 2,015.6
$ 2,001.4
$ 14.2
0.7 %


~~(1)~~	~~Includes sales of hardware bundles, in which physical hardware and digital or physical software are sold together as a single SKU.~~


~~(2)~~	Includes mobile and consumer electronics sold through our Technology Brands segment, which includes the operations of our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business.


~~(3)~~	Includes sales of PC entertainment software, interactive game figures, strategy guides, mobile and consumer electronics sold through our Video Game Brands segments, and revenues from PowerUp Pro loyalty members receiving ~~Game Informer~~ ~~magazine in print form.~~

~~Net Sales~~

Net sales increased $159.6 million, or 2.9%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016. The increase in net sales was primarily attributable to an increase in comparable store sales of 2.1% compared to the prior year period and an increase in sales in Technology Brands, as well as the positive impact of foreign exchange rate fluctuations of $22.9 million. The increase in comparable store sales was driven by an increase in sales of new video game hardware, collectibles and video game accessories. The increase in sales in Technology Brands and collectibles are a result of the Company's diversification strategy.

~~The increase in net sales was due to the following:~~

New video game hardware sales increased $134.1 million, or 16.5%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily due to the launch of the Nintendo Switch in March 2017, which was partially offset by decreases in sales of other consoles as their cycles mature.

Collectibles sales increased $93.7 million, or 33.3%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, due to the growth of collectibles sales in our Video Game Brands stores and the growth in the number of stand-alone collectibles stores.

Technology Brands sales increased $25.9 million, or 4.6%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily due to the acquisition of stores in the second half of fiscal 2016 within the Technology Brands segment, partially offset by a slowdown in the wireless upgrade cycle and changes in commission income in the current year.

Video game accessories increased $18.4 million, or 4.2%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily due to the recent release of the Nintendo Switch.

~~The increases described above were partially offset by the following:~~

Pre-owned and value video game product sales decreased $87.0 million, or 5.5%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily due to the decrease in store traffic as a result of weaker new release titles in the current year period.

New video game software sales decreased $26.3 million, or 1.7%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily due to weaker new title releases in the current year period, partially offset by sales of new video game software associated with the Nintendo Switch.

~~Cost of Sales~~

Cost of sales increased $145.4 million, or 4.1%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, primarily as a result of the change in net sales discussed above as well as the changes in gross profit discussed below.

~~Gross Profit~~

Gross profit increased $14.2 million, or 0.7%, for the 39 weeks ended October 28, 2017 compared to the 39 weeks ended October 29, 2016, and gross profit as a percentage of net sales was 35.2% in the current year period compared to 36.0% in the same period23.6% in the prior year. The increase in gross profit ~~was driven by increases of $44.9~~is primarily attributable to a $64.3 million, or 44.6%, decrease in ~~Technology Brands, primarily related to the growth through acquisitions, $28.1 million in collectibles and $6.0 million in new video game hardware. These increases were~~freight expenses resulting from added cost optimizations, partially offset by ~~decreases~~the impact of ~~$46.2 million in pre-owned and value video game products and $24.6 million in new video game software.~~

~~The net decrease in gross profit as a percentage of~~lower net sales, ~~was due to product mix shift between categories and the following product margin rate variances:~~

~~New video game software decreased to 22.8%~~as further outlined in the 39 weeks ended October 28, 2017 from 24.0% in the 39 weeks ended October 29, 2016, primarily due to lower cooperative advertising funds as a percentage of sales associated with weaker new title releases in the current year period.

~~New video game hardware decreased to 10.7% in the 39 weeks ended October 28, 2017 from 11.7% in the 39 weeks ended October 29, 2016.~~

~~These decreases in gross profit as a percentage of~~ net sales were partially offset by an increase in Technology Brands gross margin to 72.8% in the 39 weeks ended October 28, 2017 from 68.1% in the 39 weeks ended October 29, 2016, due to the growth in the number of Spring Mobile stores, which carry higher gross margin than the other businesses inside Technology Brands.commentary.

Selling, General and Administrative Expenses

~~SG&A increased $64.7 million, or 4.0%, for~~During the ~~39 weeks~~three months ended October 28, ~~2017~~2023, SG&A expenses decreased $91.4 million, or 23.6%, compared to the ~~39 weeks ended October 29, 2016. The increase was primarily due to the growth of the Technology Brands segment stores in the second half of fiscal 2016, which have higher~~prior year. SG&A expenses as a percentage of sales ~~than~~decreased to 27.5%, during the ~~other segments.~~

~~Income Tax Expense~~

~~Income tax expense was $49.5 million, representing an effective tax rate of 26.0%, for the 39 weeks~~three months ended October 28, ~~2017,~~2023, compared to ~~$87.4 million, representing an effective tax rate of 37.7%, for the 39 weeks ended October 29, 2016. The decrease in the effective income tax rate compared to the same period~~32.7% in the prior ~~year was primarily driven by certain discrete tax items recognized in the current year period and the relative mix of earnings across the jurisdictions within which we operate.~~

~~Operating Earnings and Net Income~~year.

The ~~factors described above led to operating earnings of $232.3 million~~decline in SG&A expenses for the ~~39 weeks~~three months ended October 28, 2017, or a 14.3% decrease from operating earnings of $271.1 million for the 39 weeks ended October 29, 2016. Net income was $140.6 million for the 39 weeks ended October 28, 2017, which represented a 2.7% decrease from net income of $144.5 million for the 39 weeks ended October 29, 2016.

~~SEGMENT PERFORMANCE~~

We report our business in the following segments: Video Game Brands, which consists of four geographic segments in the United States, Canada, Australia and Europe, and Technology Brands. We identified these segments based on a combination of geographic areas, the methods with which we analyze performance, the way in which our sales and profits are derived and how we divide management responsibility. Our sales and profits are driven through our physical stores, which are highly integrated with our e-commerce, digital and mobile businesses. Due to this integration, our physical stores are the basis for our segment reporting. Each of the Video Game Brands segments consists primarily of retail operations, with all stores engaged in the sale of new and pre-owned video game hardware, software and accessories (which we refer to as video game products), new and pre-owned mobile devices, related accessories and collectibles. These products are substantially the same regardless of geographic location, with the primary differences in merchandise carried being the timing of the release of new products or technologies in the various segments.

With our presence in international markets, we have operations in several foreign currencies, including the Euro, Australian dollar, New Zealand dollar, Canadian dollar, Swiss franc, Danish kroner, Swedish krona, and the Norwegian kroner.

Operating earnings (loss) by operating segment, defined as income (loss) from operations before intercompany royalty fees, net interest expense and income taxes, and net sales by reportable unit in U.S. dollars were as follows (in millions):

~~13 weeks ended October 28, 2017 compared with the 13 weeks ended October 29, 2016~~

As of and for the 13 Weeks Ended October 28, 2017
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 1,188.0
$ 97.1
$ 156.2
$ 353.1
$ 194.2
$ 1,988.6
Operating earnings $ 52.2
$ 3.2
$ 5.3
$ 8.9
$ 18.0
$ 87.6
Segment operating data:
Store count 3,905
321
470
1,260
1,506
7,462
Comparable store sales⁽¹⁾
0.6 % 6.7 % 6.1 % 3.4 % n/a
1.9 %

As of and for the 13 Weeks Ended October 29, 2016
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 1,195.2
$ 86.8
$ 139.4
$ 321.5
$ 216.3
$ 1,959.2
Operating earnings $ 59.1
$ 3.9
$ 3.5
$ 8.8
$ 23.5
$ 98.8
Segment operating data:
Store count 3,955
322
457
1,283
1,569
7,586
Comparable store sales⁽¹⁾
(8.4 )% (11.4 )% 0.1 % (0.5 )% n/a
(6.5 )%

~~(1)~~

Our Technology Brands stores are excluded from the calculation of comparable store sales as we do not consider it to be a meaningful metric in evaluating their performance due to the frequently changing nature of revenue streams and commission structures associated with this segment of our business. Instead, we measure the performance of our Technology Brands stores by using comparable store gross profit, which is calculated using a similar methodology as comparable store sales, but replacing sales with gross profit in the calculation. During the 13 weeks ended October 28, 2017, comparable store gross profit for our Technology Brands stores declined 16.3%.

~~Video Game Brands~~

~~United States~~

Segment results for Video Game Brands in the United States include retail GameStop operations in 50 states, the District of Columbia and Guam, the electronic commerce websites www.gamestop.com and www.thinkgeek.com, ~~Game Informer~~ magazine; and Kongregate, a web and mobile gaming platform that we sold in July 2017. Net sales for the 13 weeks ended October 28, 2017 decreased $7.2 million, or 0.6%, compared to the 13 weeks ended October 29, 2016, primarily due to the impact of the sale of Kongregate, partially offset by a 0.6% increase in comparable store sales. The increase in comparable store sales was primarily the result of an increase in sales of collectibles, new video game hardware and new video game software, partially offset by a decrease in sales of pre-owned and value video game products and video game accessories. Operating earnings for the 13 weeks ended October 28, 2017 decreased $6.9 million2023 compared to the prior year ~~quarter. The decrease~~is primarily attributable to a reduction in ~~operating earnings was primarily a result~~labor-related, consulting service costs, and marketing costs of ~~a decrease in gross profit, mainly due to the decline in sales of pre-owned and value video game products.~~

~~Canada~~

~~Segment results for Canada include retail and e-commerce operations in Canada. Net sales~~$70.7 million, driven by our continued focus on cost reduction efforts. Store related costs decreased $8.5 million in the ~~Canadian segment for~~current year in connection with store closures, primarily in our European segment.

During the ~~13 weeks~~nine months ended October 28, ~~2017 increased $10.3~~2023, SG&A expenses decreased $262.9 million, or ~~11.9%~~21.4%, compared to the ~~13 weeks ended October 29, 2016, primarily due~~prior year. SG&A expenses as a percentage of sales decreased to ~~a 6.7% increase in comparable store sales and~~27.7%, during the positive impact of foreign exchange rate fluctuations of $4.7 million. The increase in comparable store sales was primarily driven by the launch of the Nintendo Switch as well as an increase in sales of collectibles. Operating earnings for the 13 weeksnine months ended October 28, ~~2017 decreased $0.7 million~~2023, compared to 33.2% in the prior year.

The decline in SG&A expenses for the nine months ended October 28, 2023 compared to the prior year ~~quarter.~~

~~Australia~~

~~Segment results for Australia include retail~~is primarily attributable to a reduction in labor-related, consulting service costs, and ~~e-commerce operations in Australia and New Zealand. Net sales~~marketing expenses of $224.2 million, driven by our continued focus on cost reduction efforts. Store related costs decreased $5.8 million in the ~~Australian segment for~~current year in connection with store closures, primarily in our European segment.

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Interest Income, net

During the ~~13 weeks~~three and nine months ended October 28, ~~2017 increased $16.8~~2023, we recognized net interest income of $12.9 million ~~or 12.1%,~~and $34.2 million, respectively, compared to net interest income of $3.7 million and $3.3 million, respectfully, for the ~~13 weeks~~three and nine months ended October 29, ~~2016.~~2022. The ~~increase in net sales was~~impact is primarily the result of an increase in comparable store sales of 6.1%, the positive impact of foreign exchange rate fluctuations of $5.5 million and the opening of 14 new Zing branded collectibles stores since the prior year quarter. The increase in comparable store sales was primarily driven by the launch of the Nintendo Switch and an increase in sales of collectibles. Operating earnings for the 13 weeks ended October 28, 2017 increased $1.8 million comparedattributable to ~~the prior year quarter.~~

~~Europe~~

Segment results for Europe include retail and e-commerce operations in 10 European countries. Net sales in the European segment for the 13 weeks ended October 28, 2017 increased $31.6 million, or 9.8%, compared to the 13 weeks ended October 29, 2016, primarily due to an increase in comparable store sales of 3.4% and the positive impact of foreign exchange rate fluctuations of $20.0 million. The increase in comparable store sales was driven by the launch of the Nintendo Switch and an increase in sales of collectibles. Operating earnings for the 13 weeks ended October 28, 2017 were up slightly compared to the prior year quarter.

~~Technology Brands~~

Segment results for the Technology Brands segment include our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business. Net sales for the 13 weeks ended October 28, 2017 decreased $22.1 million, or 10.2%, compared to the prior year quarter,interest income increasing as a result of ~~the slowdown in the wireless upgrade cycle~~higher returns on invested cash, cash equivalents and ~~changes in commission~~marketable securities.

Income Tax

We recognized an income ~~which resulted in a 16.3% decline in comparable store gross profit. Operating earnings~~tax benefit of $1.2 million for the ~~13 weeks~~three months ended October 28, ~~2017 decreased $5.5 million~~2023 compared to an income tax expense of $2.1 million for the ~~prior year quarter.~~

~~39 weeks~~same period in 2022. Our effective income tax rate was 27.9% for the three months ended October 28, ~~2017~~2023 compared ~~with~~to (2.3)% for the ~~39 weeks~~same period in 2022. Our effective income tax rate for the three months ended October 28, 2023 is due to the recognition of tax benefits on certain current period losses partially offset by forecasted income taxes due in certain foreign and state jurisdictions in which we operate. Our effective income tax rate for the three months ended October 29, ~~2016~~

As of and for the 39 Weeks Ended October 28, 2017
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 3,545.3
$ 256.9
$ 438.2
$ 897.8
$ 583.9
$ 5,722.1
Operating earnings (loss) $ 175.3
$ 5.1
$ 10.2
$ (2.4 ) $ 44.1
$ 232.3
Segment operating data:
Store count 3,905
321
470
1,260
1,506
7,462
Comparable store sales⁽¹⁾
(1.1 )% 10.9 % 10.4 % 9.3 % n/a
2.1 %

As of and for the 39 Weeks Ended October 29, 2016
United
States
Canada Australia Europe Technology Brands Consolidated
Net sales $ 3,586.5
$ 231.2
$ 376.6
$ 810.2
$ 558.0
$ 5,562.5
Operating earnings (loss) $ 204.7
$ 8.9
$ 7.0
$ (5.7 ) $ 56.2
$ 271.1
Segment operating data:
Store count 3,955
322
457
1,283
1,569
7,586
Comparable store sales⁽¹⁾
(8.9 )% (9.2 )% (1.4 )% (4.0 )% n/a
(7.6 )%

~~(1)~~

~~Our Technology Brands stores are excluded from the calculation of comparable store sales as we do not consider it to be a meaningful metric~~2022 is primarily due to not recognizing tax benefits on certain current period losses as well as forecasted income taxes due in certain foreign and state jurisdictions in evaluating their performance due to the frequently changing nature of revenue streams and commission structures associated with this segment of our business. Instead, we measure the performance of our Technology Brands stores by using comparable store gross profit, which is calculated using a similar methodology as comparable store sales, but replacing sales with gross profit in the calculation. During the 39 weeks ended October 28, 2017, comparable store gross profit for our Technology Brands stores declined 16.2%.

~~Video Game Brands~~

~~United States~~

We recognized an income tax benefit of $1.5 million for the ~~39 weeks~~nine months ended October 28, ~~2017 decreased $41.2 million, or 1.1%,~~2023 compared to an income tax expense of $6.8 million for the ~~39 weeks~~same period in 2022. Our effective income tax rate was 2.6% for the nine months ended October 28, 2023 compared to (1.9)% for the same period in 2022. Our effective income tax rate for the nine months ended October 28, 2023 is due to the recognition of tax benefits on certain current period losses partially offset by forecasted income taxes due in certain foreign and state jurisdictions in which we operate. Our effective income tax rate for the nine months ended October 29, ~~2016,~~2022 is primarily due to a 1.1% decrease in comparable store sales. The decrease in comparable store sales was primarily the result of a decrease in sales of pre-owned and value video game products and new video game software, partially offset by an increase in sales of collectibles and new video game hardware. Operating earnings for the 39 weeks ended October 28, 2017 decreased $29.4 million compared to the prior year period. The decrease in operating earnings was primarily a result of a decrease in gross profit, mainly due to the decline in sales of pre-owned and value video game products and new video game software and their gross margins, partially offset by a $7.3 million gainnot recognizing tax benefits on ~~the sale of Kongregate and lower depreciation and amortization expense.~~

~~Canada~~

Segment results for Canada include retail and e-commerce operations in Canada. Net sales in the Canadian segment for the 39 weeks ended October 28, 2017 increased $25.7 million, or 11.1%, compared to the 39 weeks ended October 29, 2016, primarily due to a 10.9% increase in comparable store sales and the positive impact of foreign exchange rate fluctuations of $2.8 million. This increase in comparable store sales was primarily driven by the launch of the Nintendo Switchcertain current period losses as well as ~~an increase~~forecasted income taxes due in ~~sales of collectibles, partially offset by a decline~~certain foreign and state jurisdictions in ~~sales of pre-owned and value video game products. Operating earnings for the 39 weeks ended October 28, 2017 decreased $3.8 million compared~~which we operate.

See Part I, Item 1 "Notes to the ~~prior year period, primarily driven by a decline in gross profit associated with a decline in pre-owned and value video game sales and their gross margin.~~Condensed Consolidated Financial Statements", Note 9, "Income Taxes," for additional information.

~~Australia~~

Segment results for Australia include retail and e-commerce operations in Australia and New Zealand. Net sales in the Australian segment for the 39 weeks ended October 28, 2017 increased $61.6 million, or 16.4%, compared to the 39 weeks ended October 29, 2016. The increase in net sales was primarily the result of an increase in comparable store sales of 10.4%, the positive impact of foreign exchange rate fluctuations of $11.9 million, and the opening of 14 new Zing branded collectibles stores since the prior year period. The increase in comparable store sales was primarily driven by the launch of the Nintendo Switch and an increase in the sales of collectibles. Operating earnings for the 39 weeks ended October 28, 2017 increased $3.2 million driven by an increase in sales offset by an increase in costs associated with the expansion of our collectibles store base.

~~Europe~~

Segment results for Europe include retail operations and e-commerce operations in 10 European countries. Net sales in the European segment for the 39 weeks ended October 28, 2017 increased $87.6 million, or 10.8%, compared to the 39 weeks ended October 29, 2016, primarily due to an increase in comparable store sales of 9.3% and the positive impact of foreign exchange rate fluctuations of $8.2 million. The increase in comparable store sales was primarily driven by the launch of the Nintendo Switch and an increase in sales of pre-owned and value video game products and collectibles. Operating loss for the 39 weeks ended October 28, 2017 decreased $3.3 million compared to the prior year period primarily due to an increase in gross profit.

~~Technology Brands~~

Segment results for the Technology Brands segment include our Spring Mobile managed AT&T and Cricket branded stores and our Simply Mac business. Net sales for the 39 weeks ended October 28, 2017 increased $25.9 million, or 4.6%, compared to the 39 weeks ended October 29, 2016, as a result of acquisition activity in the second half of fiscal 2016. The increase in sales was partially offset by a slowdown in the wireless upgrade cycle and changes in commission income in the current year period which resulted in a 16.2% decline in comparable store gross profit. Operating earnings for the 39 weeks ended October 28, 2017 decreased $12.1 million compared to the prior year period, primarily due to the decline in comparable store gross profit.

LIQUIDITY AND CAPITAL RESOURCES

~~Overview~~Cash, cash equivalents and marketable securities

~~Based~~


	October 28, 2023		October 29, 2022		January 28, 2023
Cash and cash equivalents	$	909.0	$	803.8	$	1,139.0
Marketable securities	300.5		238.3		251.6
Cash, cash equivalents and marketable securities	$	1,209.5	$	1,042.1	$	1,390.6

Sources of Liquidity; Uses of Capital

Our principal sources of liquidity are cash from operations, cash on ~~our current operating plans, we believe that available cash balances, cash generated~~hand, and borrowings from the capital markets, which include our ~~operating activities and funds available under our $420 million asset-based~~ revolving credit facility together will provide sufficient liquidity to fund our operations, store openings and remodeling activities and corporate capital allocation programs, including acquisitions, debt or share repurchases, and the payment of dividends declared by the Board of Directors, for at least the next 12 months.

facilities. As of October 28, ~~2017,~~2023, we had total unrestricted cash and cash equivalents on hand of ~~$454.7~~$909.0 million, marketable securities of $300.5 million, and an additional ~~$392.4~~$399.6 million of effective available borrowing capacity under our revolving credit facilities.

Our cash and cash equivalents are carried at fair value and consist primarily of U.S. government bonds and notes, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments that mature in 90 days or less. Our marketable securities are also carried at fair value and include investments in certain highly-rated short-term government bonds and notes, as well as time deposits, that mature in less than one year.

In the ~~Revolver.~~ third quarter of fiscal 2022, the Company opened investment portfolios consisting of U.S. government treasury notes and bills. Additionally, in the second quarter of fiscal 2023 the Company invested in time deposits. As of October 28, 2023, the investment portfolios aggregate balance was $303.1 million, of which $300.5 million are recognized in marketable securities and $2.6 million are recognized in cash and cash equivalents on our Condensed Consolidated Balance Sheets. See Item 1, Part I, "Notes to the Consolidated Financial Statements", Note 4, "Fair Value Measurements," for additional information.

On an ongoing basis, we evaluate and consider certain strategic ~~acquisitions,~~operating alternatives, including divestitures, ~~repurchasing shares~~restructuring or dissolution of unprofitable business segments, uses for our ~~common stock or our outstanding debt obligations,~~excess cash, as well as ~~other transactions~~equity and debt financing alternatives that we believe may enhance stockholder value. ~~These transactions may require cash expenditures that may be funded through a combination of cash on hand, debt or equity offerings, or borrowings on our Revolver.~~ The nature, amount ~~nature~~ and timing of any ~~borrowings~~strategic operational change, or ~~sales of debt or equity securities~~financing transactions that we might pursue will depend on a variety of factors, including, as of the applicable time, our available cash and liquidity and operating ~~performance and other circumstances;~~performance; our ~~then-current~~ commitments and obligations; ~~the amount, nature and timing of~~ our capital requirements; ~~any~~ limitations imposed byunder our ~~current~~ credit arrangements; and overall market conditions.

On December 5, 2023, the Board of Directors approved a new Investment Policy. See Part I, Item 2 “Management's Discussion and Analysis of Financial Condition and Results of Operations – Recent Developments” for more information. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the

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Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value.

Some of our vendors have requested and may continue to request credit support collateral for our inventory purchase obligations and the levels of such collateral will depend on a variety of factors including our inventory purchase levels, available payment terms for inventories, availability of borrowing capacity under our credit facilities, favorable credit terms and costs of providing collateral.

In fiscal 2021, the six separate unsecured term loans held by our French subsidiary, Micromania SAS, for a total of €40.0 million were extended for five years. As of October 28, 2023, $30.5 million remains outstanding.

In November 2021, we entered into a credit agreement for a secured asset-based credit facility comprised of a $500 million revolving line of credit which matures in November 2026 ("2026 Revolver"). The 2026 Revolver includes a $50 million swing loan revolving sub-facility, a $50 million Canadian revolving sub-facility, and a $250 million letter of credit sublimit.

As of the end of the third quarter of 2023, based on our borrowing base and amounts reserved for outstanding letters of credit, total effective availability under the 2026 Revolver was $399.6 million, with no outstanding borrowings. As of October 28, 2023, outstanding standby letters of credit are $100.4 million.

Separate from the 2026 Revolver, we maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of October 28, 2023, we had bank guarantees outstanding in the amount of $20.5 million outside of the 2026 Revolver.

Cash Flows


	Nine Months Ended
	October 28, 2023		October 29, 2022		Change
Cash used in operating activities	$	(192.7)	$	(230.0)	$	37.3
Cash used in by investing activities	(53.8)		(203.6)		149.8
Cash used in financing activities	(8.1)		(3.3)		(4.8)
Exchange rate effect on cash, cash equivalents and restricted cash	(12.2)		(23.5)		11.3
Decrease in cash, cash equivalents and restricted cash	$	(266.8)	$	(460.4)	$	193.6

Operating Activities

During the ~~39 weeks~~nine months ended October 28, ~~2017,~~2023, cash ~~used in operations was $17.1~~flows from operating activities were an outflow of $192.7 million, compared ~~to cash provided by operations~~with an outflow of ~~$131.6~~$230.0 million during the ~~39 weeks~~same period last year. Cash used in operating activities during the nine months ended October 28, 2023 was primarily due to the impact of merchandise inventory purchases to support seasonal sales activity, as well the impact of our net loss, partially offset by a reduction in accounts receivable. Cash used in operating activities during the nine months ended October 29, ~~2016. The decrease in cash provided by operations of $148.7 million~~2022 was primarily ~~attributable~~due to the ~~timing~~impact of our net loss, as well as the impact of merchandise inventory purchases to support seasonal sales activity, partially offset by an increase in accounts payable and ~~vendor payments.~~accrued liabilities.

Investing Activities

Cash flows from investing activities were an outflow of $53.8 million during the nine months ended October 28, 2023 compared to an outflow of $203.6 million during the same period last year. Cash used in investing activities ~~was $40.9 million~~ during the ~~39 weeks~~nine months ended October 28, ~~2017, compared~~2023 was primarily attributable to ~~$541.5 million during~~purchases of marketable securities and ongoing technological investments, partially offset by proceeds from sales and maturities of marketable securities, as well as proceeds from the ~~the 39 weeks ended October 29, 2016. The $500.6 million decrease~~sale of property and equipment in ~~cash~~our Europe segment. Cash used in investing activities isduring the nine months ended October 29, 2022 was primarily attributable to ~~higher acquisition activity~~purchases of marketable securities, as well as investments in ~~our Technology Brands segment in the prior year period combined with lower capital expenditures in the current year period. In addition, we received net~~technology and supply chain efficiencies, partially offset by proceeds ~~of $51.2 million~~ from the sale of ~~Kongregate in July 2017.~~digital assets.

Financing Activities

Cash flows from financing activities were an outflow of $8.1 million during the nine months ended October 28, 2023 compared to an outflow of $3.3 million during the comparable prior year period. Cash used in financing activities ~~was $163.9 million~~ during the ~~39 weeks~~nine months ended October 28, ~~2017, compared~~2023 was attributable to ~~cash provided by~~the repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026 and the settlement of stock-based awards. Cash used in financing activities ~~of $296.8 million~~ during the ~~39 weeks~~nine months ended October 29, ~~2016. The change is primarily due~~2022 was attributable to ~~the issuance~~settlement of ~~our $475.0 million 2021 Senior Notes, in March 2016.~~stock-based awards.

~~Sources~~Table of ~~Liquidity~~Contents

We utilize cash generated from operations and have funds available to us under our revolving credit facility to cover seasonal fluctuations in cash flows and to support our various growth initiatives. Our cash and cash equivalents are carried at cost and consist primarily of time deposits with commercial banks.

As of October 28, 2017, we maintained an existing $400.0 million asset-backed revolving credit facility ("Revolver"), including a $50.0 million letter of credit sublimit, that was set to expire on March 25, 2019. The Revolver has an expansion feature to allow for an additional $200.0 million if certain conditions are met. Availability under the Revolver is subject to a monthly borrowing base calculation. We are required to pay a commitment fee of 0.25% for any unused portion of the total commitment under the Revolver. The per annum interest is variable and is based on the London Interbank Offered (“LIBO”) rate or the prime rate, in each case plus an applicable margin. As of October 28, 2017, our applicable margins were 0.25% for prime rate loans and 1.25% for LIBO rate loans. Total availability under the Revolver was $392.4 million as of October 28, 2017, with no outstanding borrowings and outstanding standby letters of credit of $7.5 million.

On November 20, 2017, we entered into a second amendment to our Revolver (“Amended Revolver”). The Amended Revolver increases the borrowing base capacity up to $420.0 million and extends the maturity date from March 2019 to November 2022. The Amended Revolver maintains the existing $200.0 million expansion feature and allows for an incremental $50.0 million first-in, last-out facility. The applicable margins for prime rate loans are reduced from a range of 0.25% to 0.75% to a range of 0.25% to 0.50% and, for LIBO rate loans, reduced from a range of 1.25% to 1.75% to a range of 1.25% to 1.50%. Other terms and covenants under the Amended Revolver remain substantially unchanged.

In March 2016, we issued the $475.0 million aggregate principal amount of unsecured 6.75% senior notes due March 15, 2021 (the "2021 Senior Notes"). Interest is payable semi-annually in arrears on March 15 and September 15 of each year. The net proceeds from the offering were used for general corporate purposes, including acquisitions and dividends.

In September 2014, we issued $350.0 million aggregate principal amount of unsecured 5.50% senior notes due October 1, 2019 (the "2019 Senior Notes," and together with the 2021 Senior Notes, the “Senior Notes”). Interest is payable semi-annually in arrears on April 1 and October 1 of each year. The net proceeds from the offering were used for general corporate purposes, including acquisitions and dividends.

The agreement governing our Revolver and the indentures governing our Senior Notes place certain restrictions on us and our subsidiaries, including, among others, limitations on asset sales, additional liens, investments, incurrence of additional debt and share repurchases. In addition, the indentures governing our Revolver and Senior Notes contain customary events of default, including, among others, payment defaults, breaches of covenants and certain events of bankruptcy, insolvency and reorganization. The Revolver is also subject to a fixed charge coverage ratio covenant if excess availability is below certain thresholds. We are currently in compliance with all covenants under our indentures governing the Senior Notes and our Revolver.

~~See Note 4, “Debt,” to our consolidated financial statements for additional information related to our Revolver and Senior Notes.~~

In September 2007, our Luxembourg subsidiary entered into a discretionary $20 million uncommitted line of credit (the “Line of Credit”) with Bank of America. There is no term associated with the Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit is available to our foreign subsidiaries for use primarily as a bank overdraft facility for short-term liquidity needs and for the issuance of bank guarantees and letters of credit to support operations. As of October 28, 2017, there were no cash overdrafts outstanding under the Line of Credit and bank guarantees outstanding totaled $9.9 million.

~~Uses of Capital~~

Our future capital requirements will depend upon the timing and extent of our ongoing investments in our strategic initiatives as well as the number of new stores we open and the timing of those openings within a given fiscal year.

Capital expenditures for fiscal 2017 are projected to be approximately $110 million to $120 million, used primarily to invest in our distribution and information systems and digital initiatives in support of our operations; new store openings and store remodels; and continued growth of our Technology Brands businesses.

On March 1, 2017, our Board of Directors authorized an increase in our annual cash dividend from $1.48 to $1.52 per share of Class A Common Stock, which represents an increase of 2.7%. On September 21, 2017, we made quarterly dividend payments of $0.38 per share of Class A Common Stock to stockholders of record on September 8, 2017. Additionally, on ~~November 17, 2017~~, our Board of Directors approved a quarterly cash dividend to our stockholders of $0.38 per share of Class A Common Stock payable on December 12, 2017 to stockholders of record at the close of business on December 1, 2017. Future dividends will be subject to approval by our Board of Directors.

CRITICAL ACCOUNTING POLICIES

Our ~~unaudited~~condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and ~~do not include all~~exclude certain disclosures required under GAAP for complete consolidated financial statements. Preparation of these statements requires us to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these condensed consolidated financial statements. For a summary of significant accounting policies and the means by which we develop estimates thereon, see “Part II—Item 7.7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2016~~2022 Annual Report on Form 10-K. ~~Other than the adoption of Accounting Standard Update 2016-16, as described in Note 1, "General Information," to our unaudited condensed consolidated financial statements, there~~There have been no material changes to our critical accounting policies from those included in our ~~2016~~2022 Annual Report on Form 10-K.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

~~See~~ We did not adopt any Accounting Standard Updates (“ASU”) in the third quarter of fiscal 2023. Additionally, there are no current ASUs issued, but not adopted, that are expected to have a material impact on the Company.

OFF-BALANCE SHEET ARRANGEMENTS

We had no material off-balance sheet arrangements as of October 28, 2023 other than those disclosed in Part I, Item 1 "Notes to the Condensed Consolidated Financial Statements", Note ~~1 to~~5 "Debt" and Note 6 "Commitments and Contingencies" of our ~~unaudited~~ condensed consolidated financial statements ~~included in this Quarterly Report on Form 10-Q~~ for ~~a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on our consolidated financial statements.~~additional information.

~~DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS~~

This Quarterly Report on Form 10-Q and other oral and written statements made by us to the public contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The forward-looking statements involve a number of risks and uncertainties. A number of factors could cause our actual results, performance, achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Please refer to the "Disclosure Regarding Forward-looking Statements" and "Risk Factors" sections in our 2016 Annual Report on Form 10-K as well as Item 1A of Part II of this Quarterly Report on Form 10-Q for a description of these risks and uncertainties.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report on Form 10-Q. In light of these risks and uncertainties, the forward-looking events and circumstances contained in this Quarterly Report on Form 10-Q may not occur, causing actual results to differ materially from those anticipated or implied by our forward-looking statements.



~~ITEM 3.~~	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes into our quantitative and qualitative disclosures about market risk as set forth in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risks" in our ~~2016~~2022 Annual Report on Form 10-K.



~~ITEM 4.~~	ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, our management conducted an evaluation, under the supervision and with the participation of the principal executive officer and principal financial officer, of ourOur disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act) at the~~Act of 1934 (the "Exchange Act")) are designed to provide reasonable assurance ~~level. Based on this evaluation,~~that required disclosures in the reports that we file or submit under the Exchange Act have been appropriately recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and are effective in ensuring that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, ~~concluded that,~~as appropriate, to allow timely decisions regarding required disclosure. Our principal executive officer and principal financial officer, with assistance from other members of management, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report ~~our disclosure controls~~ and, ~~procedures are designed to provide reasonable assurance of achieving their objectives and~~based on that evaluation, determined that our disclosure controls and procedures ~~are~~were effective as of October 28, 2023 at the reasonable assurance level. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in our periodic reports.

Changes in Internal Control ~~Over~~over Financial Reporting

There ~~was~~were no ~~change~~changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our ~~most recently completed fiscal~~third quarter that ~~has~~have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.

Table of Contents

PART II — OTHER INFORMATION



~~ITEM 1.~~	ITEM 1. LEGAL PROCEEDINGS

InThe matters described in Part I, Item 1 "Notes to the ~~ordinary course of our business, we~~Condensed Consolidated Financial Statements", Note 6 "Commitments and Contingencies - Legal Proceedings" in this Quarterly Report on Form 10-Q are from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions and consumer class actions. We may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if we believe settlement is in the best interest of our stockholders. We do not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on our financial condition, results of operations or liquidity.incorporated by reference.



~~ITEM 1A.~~	ITEM 1A. RISK FACTORS

~~You should carefully consider the~~Our operations and financial results are subject to various risks and uncertainties, including those risk factors ~~discussed~~set out below and those described in ~~“Item 1A. Risk Factors”~~Part I, Item 1A "Risk Factors" in our ~~2016~~2022 Annual Report on Form ~~10-K. These risks~~10-K for the year ended January 28, 2023, which could ~~materially and~~ adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common and capital stock.

We may not successfully manage the transition associated with certain of our executive officers, which could have an adverse impact on us.

On June 5, 2023, our Board of Directors terminated Matthew Furlong’s employment with the Company as its President and Chief Executive Officer without Cause (as such term is defined in Mr. Furlong’s letter of employment dated June 9, 2021), effective immediately. On June 7, 2023, in connection with Mr. Furlong’s termination, our Board of Directors appointed Ryan Cohen as Executive Chairman of the Company and Mark Robinson as the new principal executive officer of the Company with the title of General Manager. On September 27, 2023, the Board of Directors, with Mr. Cohen abstaining, unanimously appointed Mr. Cohen, as the President, Chief Executive Officer and Chairman of the Company. In connection with this appointment, Mr. Cohen relinquished his Executive Chairman title and assumed the role of principal executive officer of the Company from Mr. Robinson. Mr. Robinson remained the Company’s General Counsel and Secretary.

On July 21, 2023, Diana Saadeh-Jajeh resigned from her position as the Company's Chief Financial Officer, effective August 11, 2023. On July 27, 2023, in connection with Ms. Saadeh-Jajeh’s resignation, the Board of Directors appointed Daniel Moore as the Company’s Principal Accounting Officer and interim Principal Financial Officer, effective August 11, 2023.

Leadership transitions can be inherently difficult to manage, and failure to timely or successfully implement transitions may cause disruption within the Company, including execution of our transformational plans. This may adversely impact our financial performance and ability to meet operational goals and strategic plans, our ability to retain and hire other key members of management, and the market price of our Class A common stock.

Risks Related to our Investment Policy and Securities

The value of our securities may decline.

The Company invests from time to time in securities and is exposed to market volatility in connection with these investments. The Company’s financial position and financial performance could be adversely affected by worsening market conditions or poor performance of such investments. The Company may invest from time to time in nonmarketable securities and may need to hold such instruments for a long period of time and may not be able to realize a return of its cash investment should there be a need to liquidate to obtain cash at any given time. The Company may also invest from time to time in securities that are interest-bearing securities and if there are changes in interest rates, those changes would affect the interest income the Company earns on these investments and, therefore, impact its cash flows and results of operations. ~~There~~

Our portfolio of securities may be concentrated in one or a few holdings, which may result in a single holding significantly impacting the value of our investment portfolio.

In addition, the Company’s holdings of securities may be concentrated in just one or a few holdings. Accordingly, a significant decline in the market value of one or more of such holdings may not be offset by hypothetically better performance of other holdings. This concentration of risk may result in a more pronounced effect on net income and shareholders’ equity, and may result in greater volatility in the fair market value of the Company’s holdings of securities from one period to another.

The Company is required to recognize losses in a particular security for financial statement purposes even though the Company has not actually sold the security.

Under accounting rules, changes in the unrealized gains and losses on certain of our securities are included in the Company’s reported net income (loss), even though the Company has not actually realized any gain or loss by selling such securities. Accordingly, changes in the market prices of such securities can have ~~been no material~~a significant impact on the Company’s reported results for a particular period, even though those changes ~~from~~do not bear on the ~~risk factors disclosed in~~performance of the Company’s operating businesses.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

None.

Table of Contents

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Additional Information Regarding Outstanding Shares

As of November 30, 2023, there were approximately 305,514,315 shares of our ~~2016 Annual Report~~Class A common stock outstanding. Of those outstanding shares, approximately 230.1 million were held by Cede & Co on ~~Form 10-K.~~behalf of the Depository Trust & Clearing Corporation (or approximately 75% of our outstanding shares) and approximately 75.4 million shares of our Class A common stock were held by registered holders with our transfer agent (or approximately 25% of our outstanding shares) as of November 30, 2023.

Security Trading Plans of Directors and Executive Officers

None of the Company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended October 28, 2023, as such terms are defined under Item 408(a) or Regulation S-K.

Table of Contents

ITEM 6. EXHIBITS

~~ITEM 6.~~Exhibit
Number

~~EXHIBITS~~

Description

Previously Filed as an Exhibit to and Incorporated by Reference From

Date Filed

3.1

Third Amended and Restated Certificate of Incorporation.

Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 2013

September 11, 2013

~~Exhibit~~

~~Number~~

~~Description~~

~~31.1~~3.2

Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation.

Current Report on Form 8-K

June 3, 2022

3.3

Fifth Amended and Restated Bylaws.

Current Report on Form 8-K

March 6, 2017

31.1

Certification of ~~Chief~~Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.⁽¹⁾

Filed herewith.

~~31.2~~

31.2

Certification of ~~Chief~~Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.⁽¹⁾

Filed herewith.

~~32.1~~

32.1

Certification of ~~Chief~~Principal Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.⁽²⁾

Furnished herewith.

~~32.2~~

32.2

Certification of ~~Chief~~Principal Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.⁽²⁾

Furnished herewith.

~~101.INS~~

101.INS

XBRL Instance Document ⁽³⁾- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.

Submitted electronically herewith.

~~101.SCH~~

101.SCH

Inline XBRL Taxonomy Extension Schema⁽³⁾

Submitted electronically herewith.

~~101.CAL~~

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase⁽³⁾

Submitted electronically herewith.

~~101.DEF~~

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase⁽³⁾

Submitted electronically herewith.

~~101.LAB~~

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase⁽³⁾

~~101.PRE~~

~~XBRL Taxonomy Extension Presentation Linkbase~~ ⁽³⁾

Submitted electronically herewith.


~~(1)~~			~~Filed herewith.~~

~~(2)~~104

~~Furnished~~

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Submitted electronically herewith.

~~(3)~~

~~Submitted electronically herewith.~~

* Management contract or compensation plan or arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GAMESTOP CORP.

~~By:~~

~~/s/ ROBERT A. LLOYD~~

~~Robert A. Lloyd~~

~~Executive Vice President and Chief Financial Officer~~

~~(Principal Financial Officer)~~

Date: December ~~5, 2017~~6, 2023

By:

/s/ Daniel Moore

Daniel Moore

~~GAMESTOP CORP.~~

Principal Accounting Officer and Interim Principal Financial Officer

~~By:~~

~~/s/ TROY W. CRAWFORD~~

~~Troy W. Crawford~~

~~Senior Vice President and Chief Accounting Officer~~

(Principal Accounting Officer and Interim Principal Financial Officer)

~~Date: December 5, 2017~~


Delaware			20-2733559
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

~~Delaware~~				~~20-2733559~~
~~(State or other jurisdiction of~~ ~~incorporation or organization)~~	~~(I.R.S. Employer~~ ~~Identification No.)~~

625 Westport Parkway	76051 ~~(Zip Code)~~
Grapevine,		Texas
(Address of principal executive offices)			(Zip Code)



Part I — FINANCIAL INFORMATION
						Page No.
Item 1.		Financial Statements (unaudited)				1

			~~Page No.~~
~~PART I — FINANCIAL INFORMATION~~

~~Item 1.~~	~~Financial Statements~~			1

	~~Unaudited~~ Condensed Consolidated Balance Sheets — As of October 28, ~~2017,~~2023, October 29, ~~2016~~2022 and January 28, ~~2017~~2023			1

		~~Unaudited~~ Condensed Consolidated Statements of Operations — For the ~~13 weeks~~three and ~~39 weeks~~nine months ended October 28 ~~2017~~, 2023 and October 29 ~~2016~~, 2022				2

		~~Unaudited~~ Condensed Consolidated Statements of Comprehensive ~~Income~~Loss — For the ~~13 weeks~~three and ~~39 weeks~~nine months ended October ~~28, 2017~~ 2 8 , 2023 and October 29 ~~2016~~, 2022				3

		~~Unaudited~~ Condensed Consolidated Statements of Cash Flows — For the nine months ended October 28 , 2023 and October 29 , 2022				4

		Condensed Consolidated Statements of Stockholders’ Equity — For the ~~39 weeks~~three and nine months ended October 28 ~~2017~~, 2023 and October 29 ~~2016~~, 2022				45

		~~Unaudited Condensed Consolidated Statements of Cash Flows — For the 39 weeks ended October 28, 2017 and October 29, 2016~~			5

	~~Condensed~~ Notes to ~~Unaudited~~Condensed Consolidated Financial Statements			67

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations				15

Item 3.		Quantitative and Qualitative Disclosures About Market Risk				2621

Item 4.		Controls and Procedures				2621

PART II — OTHER INFORMATION

Item 1.		Legal Proceedings				2722

Item 1A.		Risk Factors				2722

Item 6.2.		~~Exhibits~~Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities				2722

Item 3.		Defaults Upon Senior Securities				23

Item 4.		Mine Safety Disclosures				23

Item 5.		Other Information				23

Item 6.		Exhibits				24

SIGNATURES						2825


		October 28, 2017			October 29, 2016			January 28, 2017				October 28, 2023		October 29, 2022		January 28, 2023
ASSETS	ASSETS										ASSETS
Current assets:											Current assets:
Cash and cash equivalents		$	454.7		$	356.1		$	669.4		Cash and cash equivalents	$	909.0	$	803.8	$	1,139.0
Receivables, net		195.8			181.1			220.9
Marketable securities											Marketable securities	300.5		238.3		251.6
Receivables, net of allowance of $2.1, $2.0 and $2.2, respectively											Receivables, net of allowance of $2.1, $2.0 and $2.2, respectively	88.3		125.3		153.9
Merchandise inventories, net		1,822.5			1,633.6			1,121.5			Merchandise inventories, net	1,021.3		1,131.3		682.9
Prepaid expenses and other current assets		198.0			188.0			128.9			Prepaid expenses and other current assets	57.7		283.1		96.3
Total current assets		2,671.0			2,358.8			2,140.7			Total current assets	2,376.8		2,581.8		2,323.7
Property and equipment:
Land		19.2			17.9			18.6
Buildings and leasehold improvements		752.9			726.9			724.5
Fixtures and equipment		986.7			925.1			931.4
Total property and equipment		1,758.8			1,669.9			1,674.5
Less accumulated depreciation		1,300.9			1,166.8			1,203.5
Net property and equipment		457.9			503.1			471.0
Property and equipment, net of accumulated depreciation of $973.0, $981.4 and $1,006.8, respectively											Property and equipment, net of accumulated depreciation of $973.0, $981.4 and $1,006.8, respectively	114.5		138.5		136.5
Operating lease right-of-use assets											Operating lease right-of-use assets	570.4		523.2		560.8
Deferred income taxes		73.2			39.0			59.0			Deferred income taxes	16.6		14.3		18.3
Goodwill		1,693.2			1,726.8			1,725.2
Other intangible assets, net		508.0			527.7			507.2
Other noncurrent assets		70.7			75.2			72.8			Other noncurrent assets	68.6		64.7		74.1
Total noncurrent assets		2,803.0			2,871.8			2,835.2
Total assets		$	5,474.0		$	5,230.6		$	4,975.9		Total assets	$	3,146.9	$	3,322.5	$	3,113.4

LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY										LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:											Current liabilities:
Accounts payable		$	1,285.1		$	1,242.6		$	616.6		Accounts payable	$	812.7	$	888.4	$	531.3
Accrued liabilities		914.9			877.8			1,090.9
Income taxes payable		17.5			30.7			54.0
Accrued liabilities and other current liabilities											Accrued liabilities and other current liabilities	425.7		504.2		602.3
Current portion of operating lease liabilities											Current portion of operating lease liabilities	188.9		186.2		194.7
Current portion of long-term debt											Current portion of long-term debt	10.5		9.9		10.8
Total current liabilities		2,217.5			2,151.1			1,761.5			Total current liabilities	1,437.8		1,588.7		1,339.1
Deferred income taxes		22.2			30.1			23.0
Long-term debt, net		817.2			814.3			815.0
Long-term debt											Long-term debt	20.0		28.8		28.7
Operating lease liabilities											Operating lease liabilities	394.8		349.6		382.4
Other long-term liabilities		103.4			111.0			122.3			Other long-term liabilities	31.5		110.4		40.9
Total long-term liabilities		942.8			955.4			960.3
Total liabilities		3,160.3			3,106.5			2,721.8			Total liabilities	1,884.1		2,077.5		1,791.1
Commitments and Contingencies (Note 5)
Stockholders’ equity:											Stockholders’ equity:
Class A common stock — $.001 par value; 300 shares authorized; 101.3, 102.6 and 101.0 shares issued and outstanding		0.1			0.1			0.1
Class A common stock — $.001 par value; 1,000 shares authorized; 305.5, 304.3 and 304.6 shares issued and outstanding, respectively											Class A common stock — $.001 par value; 1,000 shares authorized; 305.5, 304.3 and 304.6 shares issued and outstanding, respectively	0.1		0.1		0.1
Additional paid-in capital		12.8			—			—			Additional paid-in capital	1,627.5		1,606.4		1,613.6
Accumulated other comprehensive loss		(24.3		)	(45.7		)	(47.3		)	Accumulated other comprehensive loss	(88.9)		(93.8)		(71.9)
Retained earnings		2,325.1			2,169.7			2,301.3
Retained loss											Retained loss	(275.9)		(267.7)		(219.5)
Total stockholders’ equity		2,313.7			2,124.1			2,254.1			Total stockholders’ equity	1,262.8		1,245.0		1,322.3
Total liabilities and stockholders’ equity		$	5,474.0		$	5,230.6		$	4,975.9		Total liabilities and stockholders’ equity	$	3,146.9	$	3,322.5	$	3,113.4



	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	13 Weeks Ended					39 Weeks Ended
	October 28, 2017			October 29, 2016		October 28, 2017			October 29, 2016
Net sales	$	1,988.6		$	1,959.2	$	5,722.1		$	5,562.5
Cost of sales	1,299.2			1,251.0		3,706.5			3,561.1
Gross profit	689.4			708.2		2,015.6			2,001.4
Selling, general and administrative expenses	565.1			567.1		1,671.0			1,606.3
Depreciation and amortization	36.7			42.3		112.3			124.0
Operating earnings	87.6			98.8		232.3			271.1
Interest income	(0.2		)	—		(0.4		)	(0.5		)
Interest expense	14.1			14.8		42.6			39.7
Earnings before income tax expense	73.7			84.0		190.1			231.9
Income tax expense	14.3			33.2		49.5			87.4
Net income	$	59.4		$	50.8	$	140.6		$	144.5

Dividends per common share	$	0.38		$	0.37	$	1.14		$	1.11

Earnings per share:
Basic	$	0.59		$	0.49	$	1.39		$	1.39
Diluted	$	0.59		$	0.49	$	1.39		$	1.39
Weighted-average shares outstanding:
Basic	101.5			103.7		101.4			103.8
Diluted	101.5			104.0		101.5			104.2



	October 28, 2017				October 29, 2016				January 28, 2017
	Level 2		Level 3		Level 2		Level 3		Level 2		Level 3
Assets
Foreign currency contracts
Other current assets	$	1.9	$	—	$	16.7	$	—	$	13.3	$	—
Other noncurrent assets	0.4		—		0.2		—		0.1		—
Company-owned life insurance⁽¹⁾	13.0		—		10.3		—		12.4		—
Total assets	$	15.3	$	—	$	27.2	$	—	$	25.8	$	—
Liabilities
Foreign currency contracts
Accrued liabilities	$	3.6	$	—	$	8.3	$	—	$	4.3	$	—
Other long-term liabilities	0.5		—		—		—		0.1		—
Nonqualified deferred compensation⁽²⁾	1.1		—		1.0		—		1.0		—
Contingent consideration⁽³⁾	—		17.5		—		43.2		—		43.2
Total liabilities	$	5.2	$	17.5	$	9.3	$	43.2	$	5.4	$	43.2


~~(2)~~	~~Recognized in accrued liabilities in our unaudited condensed consolidated balance sheets.~~


~~(3)~~	As of October 28, 2017, $17.5 million was included in accrued liabilities in our unaudited condensed consolidated balance sheets. As of October 29, 2016 and January 28, 2017, the current portion of $20.0 million was included in accrued liabilities and the noncurrent portion of $23.2 million was included in other long-term liabilities in our unaudited condensed consolidated balance sheets.



13 weeks ended October 28, 2017	United States		Canada		Australia		Europe		Technology Brands		Consolidated
Net sales	$	1,188.0	$	97.1	$	156.2	$	353.1	$	194.2	$	1,988.6
Operating earnings	52.2		3.2		5.3		8.9		18.0		87.6
Interest income											0.2
Interest expense											(14.1		)
Earnings before income taxes											$	73.7



13 weeks ended October 29, 2016	United States		Canada		Australia		Europe		Technology Brands		Consolidated
Net sales	$	1,195.2	$	86.8	$	139.4	$	321.5	$	216.3	$	1,959.2
Operating earnings	59.1		3.9		3.5		8.8		23.5		98.8
Interest expense											(14.8		)
Earnings before income taxes											$	84.0



39 weeks ended October 28, 2017	United States		Canada		Australia		Europe			Technology Brands		Consolidated
Net sales	$	3,545.3	$	256.9	$	438.2	$	897.8		$	583.9	$	5,722.1
Operating earnings (loss)	175.3		5.1		10.2		(2.4		)	44.1		232.3
Interest income												0.4
Interest expense												(42.6		)
Earnings before income taxes												$	190.1



39 weeks ended October 29, 2016	United States		Canada		Australia		Europe			Technology Brands		Consolidated
Net sales	$	3,586.5	$	231.2	$	376.6	$	810.2		$	558.0	$	5,562.5
Operating earnings (loss)	204.7		8.9		7.0		(5.7		)	56.2		271.1
Interest income												0.5
Interest expense												(39.7		)
Earnings before income taxes												$	231.9



		~~FOR THE TRANSITION PERIOD FROM~~	TO



2.	~~Divestitures~~



4.	~~Debt~~



5.	~~Commitments and Contingencies~~