UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 Form 10-Q

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

FOR THE QUARTERLY PERIOD ENDED MAY 2, 20201, 2021

OR
OR
 ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NO. 1-32637
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GameStop Corp.
(Exact name of registrant as specified in its charter)
Delaware 20-2733559
(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
625 Westport Parkway76051
Grapevine,Texas
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code:
(817) 424-2000

Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common StockGMENYSE

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 ☒ No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  ☒  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:
Large accelerated filer☐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 ☐    No ☒
Number of shares of $.001 par value Class A Common Stock outstanding as of June 2, 2020: 64,758,9101, 2021: 71,815,131


TABLE OF CONTENTS 
Part I — FINANCIAL INFORMATION
Page No.
PART I — FINANCIAL INFORMATION
Item 1.
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Item 2.
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Item 3.
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Item 4.
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PART II — OTHER INFORMATION
Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Table of Contents
PART I — FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
GAMESTOP CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, except par value per share)
May 2,
2020		May 4,
2019		February 1,
2020
ASSETS
Current assets:
Cash and cash equivalents$570.3  $543.2  $499.4  
Receivables, net86.7  126.0  141.9  
Merchandise inventories, net654.7  1,149.1  859.7  
Prepaid expenses and other current assets99.1  101.8  120.9  
Assets held for sale9.1  —  11.8  
Total current assets1,419.9  1,920.1  1,633.7  
Property and equipment, net256.3  313.3  275.9  
Operating lease right-of-use assets706.2  807.0  767.0  
Deferred income taxes29.2  147.3  83.0  
Goodwill—  363.9  —  
Other noncurrent assets57.4  81.7  60.1  
Total assets$2,469.0  $3,633.3  $2,819.7  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$212.1  $458.4  $380.8  
Accrued liabilities and other current liabilities506.0  588.9  617.5  
Current portion of operating lease liabilities249.4  250.0  239.4  
Current portion of long-term debt, net417.2  —  —  
Borrowings under revolving line of credit135.0  —  —  
Total current liabilities1,519.7  1,297.3  1,237.7  
Long-term debt, net—  468.9  419.8  
Operating lease liabilities493.9  552.6  529.3  
Other long-term liabilities20.4  22.8  21.4  
Total liabilities2,034.0  2,341.6  2,208.2  
Commitments and contingencies (Note 7)
Stockholders’ equity:
Class A common stock — $.001 par value; 300 shares authorized; 64.6, 102.3 and 64.3 shares issued and outstanding0.1  0.1  0.1  
Additional paid-in capital1.3  29.0  —  
Accumulated other comprehensive loss(90.9) (68.2) (78.8) 
Retained earnings524.5  1,330.8  690.2  
Total stockholders’ equity435.0  1,291.7  611.5  
Total liabilities and stockholders’ equity$2,469.0  $3,633.3  $2,819.7  
May 1,
2021		May 2,
2020		January 30,
2021
ASSETS
Current assets:
Cash and cash equivalents$694.7 $570.3 $508.5 
Restricted cash57.4 0 110.0 
Receivables, net102.1 86.7 105.3 
Merchandise inventories570.9 654.7 602.5 
Prepaid expenses and other current assets232.1 99.1 224.9 
Assets held-for-sale0 9.1 0 
Total current assets1,657.2 1,419.9 1,551.2 
Property and equipment, net192.6 256.3 201.2 
Operating lease right-of-use assets654.2 706.2 662.1 
Deferred income taxes0 29.2 0 
Long-term restricted cash18.7 13.6 16.5 
Other noncurrent assets40.0 43.8 41.6 
Total assets$2,562.7 $2,469.0 $2,472.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$388.6 $212.1 $341.8 
Accrued liabilities and other current liabilities561.8 506.0 626.8 
Current portion of operating lease liabilities219.4 249.4 227.4 
Short-term debt, including current portion of long-term debt, net48.1 417.2 121.7 
Borrowings under revolving line of credit0 135.0 25.0 
Total current liabilities1,217.9 1,519.7 1,342.7 
Long-term debt, net0 0 216.0 
Operating lease liabilities445.0 493.9 456.7 
Other long-term liabilities20.3 20.4 20.5 
Total liabilities1,683.2 2,034.0 2,035.9 
Commitments and contingencies (Note 7)000
Stockholders’ equity:
Class A common stock — $.001 par value; 300 shares authorized; 69.3, 64.6 and 65.3 shares issued and outstanding, respectively0.1 0.1 0.1 
Additional paid-in capital518.5 1.3 11.0 
Accumulated other comprehensive loss(47.2)(90.9)(49.3)
Retained earnings408.1 524.5 474.9 
Total stockholders’ equity879.5 435.0 436.7 
Total liabilities and stockholders’ equity$2,562.7 $2,469.0 $2,472.6 










See accompanying condensed notes to unaudited condensed consolidated financial statements.
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Table of Contents
GAMESTOP CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
 13 Weeks Ended
 May 2,
2020		May 4,
2019
Net sales$1,021.0  $1,547.7  
Cost of sales738.6  1,076.5  
Gross profit282.4  471.2  
Selling, general and administrative expenses386.5  453.7  
Asset impairments3.9  —  
Operating (loss) earnings(108.0) 17.5  
Interest income(0.9) (5.3) 
Interest expense7.6  13.0  
(Loss) income from continuing operations before income taxes(114.7) 9.8  
Income tax expense50.4  2.3  
Net (loss) income from continuing operations(165.1) 7.5  
Loss from discontinued operations, net of tax(0.6) (0.7) 
Net (loss) income$(165.7) $6.8  
Basic (loss) earnings per share:
Continuing operations$(2.56) $0.07  
Discontinued operations(0.01) (0.01) 
Basic (loss) earnings per share$(2.57) $0.07  
Diluted (loss) earnings per share:
Continuing operations$(2.56) $0.07  
Discontinued operations(0.01) (0.01) 
Diluted (loss) earnings per share$(2.57) $0.07  
Weighted-average shares outstanding:
Basic64.5  102.4  
Diluted64.5  102.5  
 13 Weeks Ended
 May 1,
2021		May 2,
2020
Net sales$1,276.8 $1,021.0 
Cost of sales946.7 738.6 
Gross profit330.1 282.4 
Selling, general and administrative expenses370.3 386.5 
Asset impairments0.6 3.9 
Operating loss(40.8)(108.0)
Interest income(0.1)(0.9)
Interest expense24.8 7.6 
Loss from continuing operations before income taxes(65.5)(114.7)
Income tax expense1.3 50.4 
Net loss from continuing operations(66.8)(165.1)
Loss from discontinued operations, net of tax0 (0.6)
Net loss$(66.8)$(165.7)
Basic loss per share:
Continuing operations$(1.01)$(2.56)
Discontinued operations0 (0.01)
Basic loss per share$(1.01)$(2.57)
Diluted loss per share:
Continuing operations$(1.01)$(2.56)
Discontinued operations0 (0.01)
Diluted loss per share$(1.01)$(2.57)
Weighted-average shares outstanding:
Basic66.0 64.5 
Diluted66.0 64.5 


















See accompanying condensed notes to unaudited condensed consolidated financial statements.
2
Table of Contents
GAMESTOP CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)LOSS
(in millions)
 13 Weeks Ended
 May 2,
2020		May 4,
2019
Net (loss) income$(165.7) $6.8  
Other comprehensive loss:
Foreign currency translation adjustment(12.1) (13.9) 
Total comprehensive loss$(177.8) $(7.1) 
 13 Weeks Ended
 May 1,
2021		May 2,
2020
Net loss$(66.8)$(165.7)
Other comprehensive (loss) income:
Foreign currency translation adjustment2.1 (12.1)
Total comprehensive loss$(64.7)$(177.8)
















































See accompanying condensed notes to unaudited condensed consolidated financial statements.
3
Table of Contents
GAMESTOP CORP.
UNAUDITED 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
Earnings		Total
Stockholders'
Equity		 Class A
Common Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
(Loss) Income		Retained
Earnings		Total
Stockholders'
Equity
SharesAmount SharesTotal
Stockholders'
Equity
Balance at February 1, 202064.3  $0.1  $—  $(78.8) $690.2  $611.5  
Balance at January 30, 2021Balance at January 30, 202165.3 $0.1 $11.0 $(49.3)$474.9 $436.7 
Net lossNet loss—  —  —  —  (165.7) (165.7) Net loss— — — — (66.8)(66.8)
Issuance of common stock, net of costIssuance of common stock, net of cost3.5 — 551.7 — — 551.7 
Foreign currency translationForeign currency translation—  —  —  (12.1) —  (12.1) Foreign currency translation— — — 2.1 — 2.1 
Stock-based compensation expenseStock-based compensation expense—  —  1.8  —  —  1.8  Stock-based compensation expense— — 5.7 — — 5.7 
Settlement of stock-based awardsSettlement of stock-based awards0.3  —  (0.5) —  —  (0.5) Settlement of stock-based awards0.5 — (49.9)— — (49.9)
Balance at May 2, 202064.6  $0.1  $1.3  $(90.9) $524.5  $435.0  
Balance at May 1, 2021Balance at May 1, 202169.3 $0.1 $518.5 $(47.2)$408.1 $879.5 

 Class A
Common Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Total
Stockholders'
Equity
 SharesAmount
Balance at February 2, 2019102.0  $0.1  $27.7  $(54.3) $1,362.7  $1,336.2  
Net income—  —  —  —  6.8  6.8  
Foreign currency translation—  —  —  (13.9) —  (13.9) 
Dividends declared, $0.38 per common share—  —  —  —  (38.7) (38.7) 
Stock-based compensation expense—  —  1.9  —  —  1.9  
Settlement of stock-based awards0.3  —  (0.6) —  —  (0.6) 
Balance at May 4, 2019102.3  $0.1  $29.0  $(68.2) $1,330.8  $1,291.7  




 Class A
Common Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Retained
Earnings		Total
Stockholders'
Equity
 SharesAmount
Balance at February 1, 202064.3 $0.1 $0 $(78.8)$690.2 $611.5 
Net loss— — — — (165.7)(165.7)
Foreign currency translation— — — (12.1)— (12.1)
Stock-based compensation expense— — 1.8 — — 1.8 
Settlement of stock-based awards0.3 — (0.5)— — (0.5)
Balance at May 2, 202064.6 $0.1 $1.3 $(90.9)$524.5 $435.0 






















See accompanying condensed notes to unaudited condensed consolidated financial statements.
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Table of Contents
GAMESTOP CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
 13 Weeks Ended
 May 2,
2020		May 4,
2019
Cash flows from operating activities:
Net (loss) income$(165.7) $6.8  
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Depreciation and amortization (including amounts in cost of sales)21.5  23.3  
Asset impairments3.9  —  
Stock-based compensation expense1.8  1.9  
Deferred income taxes45.4  —  
Loss on disposal of property and equipment0.3  0.7  
Other0.5  1.2  
Changes in operating assets and liabilities:
Receivables, net54.4  6.9  
Merchandise inventories196.0  89.4  
Prepaid expenses and other current assets5.8  3.8  
Prepaid income taxes and income taxes payable22.3  (1.0) 
Accounts payable and accrued liabilities(274.1) (787.0) 
Operating lease right-of-use assets and lease liabilities38.8  (11.0) 
Changes in other long-term liabilities(0.2) —  
Net cash flows used in operating activities(49.3) (665.0) 
Cash flows from investing activities:
Purchase of property and equipment(6.6) (18.6) 
Other0.5  (0.1) 
Net cash flows used in investing activities(6.1) (18.7) 
Cash flows from financing activities:
Dividends paid(0.3) (40.3) 
Borrowings from the revolver150.0  —  
Repayments of revolver borrowings(15.0) —  
Repayments of senior notes(2.3) (353.1) 
Settlement of stock-based awards(0.5) (0.6) 
Net cash flows provided by (used in) financing activities131.9  (394.0) 
Exchange rate effect on cash and cash equivalents and restricted cash(6.1) (6.4) 
Increase (decrease) in cash and cash equivalents and restricted cash70.4  (1,084.1) 
Cash and cash equivalents and restricted cash at beginning of period513.5  1,640.5  
Cash and cash equivalents and restricted cash at end of period$583.9  $556.4  





 13 Weeks Ended
May 1,
2021		May 2,
2020
Cash flows from operating activities:
Net loss$(66.8)$(165.7)
Adjustments to reconcile net loss to net cash flows from operating activities:
Depreciation and amortization (including amounts in cost of sales)18.7 21.5 
Loss (gain) on retirement of debt18.2 (0.7)
Asset impairments0.6 3.9 
Stock-based compensation expense5.7 1.8 
Deferred income taxes0 45.4 
Loss on disposal of property and equipment, net0.4 0.3 
Other, net(0.5)1.2 
Changes in operating assets and liabilities:
Receivables, net3.1 54.4 
Merchandise inventories32.4 196.0 
Prepaid expenses and other current assets(2.9)5.8 
Prepaid income taxes and income taxes payable(1.2)22.3 
Accounts payable and accrued liabilities(11.4)(274.1)
Operating lease right-of-use assets and lease liabilities(15.0)38.8 
Changes in other long-term liabilities(0.1)(0.2)
Net cash flows used in operating activities(18.8)(49.3)
Cash flows from investing activities:
Purchase of property and equipment(14.7)(6.6)
Other0 0.5 
Net cash flows used in investing activities(14.7)(6.1)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of cost551.7 0 
Borrowings from the revolver0 150.0 
Repayments of revolver borrowings(25.0)(15.0)
Payments of senior notes(307.4)(2.3)
Settlement of stock-based awards(49.9)(0.5)
Other(0.1)(0.3)
Net cash flows provided by financing activities169.3 131.9 
Exchange rate effect on cash, cash equivalents and restricted cash0 (6.1)
Increase in cash, cash equivalents and restricted cash135.8 70.4 
Cash, cash equivalents and restricted cash at beginning of period635.0 513.5 
Cash, cash equivalents and restricted cash at end of period$770.8 $583.9 




See accompanying condensed notes to unaudited condensed consolidated financial statements.
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Table of Contents
GAMESTOP CORP.
CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.    General Information
The Company
GameStop Corp. (“GameStop,” “we,” “us,” “our,” or the “Company”) is a global, multichannel video game, consumer electronicsleading specialty retailer offering games and collectibles retailer. entertainment products through its e-commerce properties and thousands of stores.
GameStop operates over 5,300 stores across 14 countries. Our consumer product network also includes www.gamestop.com and Game Informer® magazine, the world's leading print and digital video game publication.
We operate ourits business in 4 geographic segments: United States, Canada, Australia and Europe. The information contained in these unaudited condensed 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 disclosures required under GAAP for complete consolidated financial statements.
These unaudited condensed consolidated financial statements should be read in conjunction with our annual report on Form 10-K for the 52 weeks ended February 1, 2020,January 30, 2021, as filed with the Securities and Exchange Commission ("SEC") on March 27, 2020,23, 2021, (the “2019“2020 Annual Report on Form 10-K”). Due to the seasonal nature of our business, the results of operations for the 13 weeks ended May 1, 2021 are not indicative of the results to be expected for the 52 weeks ending January 29, 2022 ("fiscal 2021"). Our fiscal year is composed of the 52 or 53 weeks ending on the Saturday closest to the last day of January. Each of our fiscal years ending January 29, 2022 ("fiscal 2021") and January 30, 2021 ("fiscal 2020") consist of 52 weeks. The discussion and analysis of 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 realized during the fourth fiscal quarter, which includes the holiday selling season.
UseofEstimates
The preparation of financial statements in conformity with GAAPaccounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of 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. In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements, and changesgiving 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 to the seasonal nature of our business, the results of operations for the 13 weeks ended May 2, 2020 are not indicative of the results to be expected for the 52 weeks ending January 30, 2021 ("fiscal 2020").
Reclassifications
We have made certain classifications in our consolidated statements of cash flows in order to conform to the current year presentation. The provision for inventory reservesIn our consolidated balance sheets, restricted cash of $16.3$13.6 million as of May 2, 2020 has been reclassified from other noncurrent assets to long-term restricted cash to conform to the current year presentation. In our consolidated statements of cash flows, gain on retirement of debt of $0.7 million for the 13 weeks ended May 4, 2019 has been reclassified to changes in merchandise inventories. Certain changes in customer liabilities, primarily associated with loyalty point redemptions and gift card breakage, of $4.8 million for the 13 weeks ended May 4, 2019 has also been2, 2020 was reclassified from other to changes in accounts payable and accrued liabilities. Additionally, in our consolidated statementsloss (gain) on retirement of operations, depreciation and amortization of $23.1 million for the 13 weeks ended May 4, 2019 has been reclassified to selling, general and administrative expenses to conform to the current year presentation.debt.
Significant Accounting Policies
There have been no material changes to our significant accounting policies included in Note 1, "Nature of Operations and Summary of Significant Accounting Policies," within our 2019the 2020 Annual Report on Form 10-K.
Restricted Cash
Restricted cash of $76.1 million, $13.6 million $13.2 million and $14.1$126.5 million as of May 1, 2021, May 2, 2020 May 4, 2019 and February 1, 2020,January 30, 2021, respectively, consists primarily of bank deposits serving as collateral for bank guarantees issued on behalf ofthat collateralize our foreign subsidiariesobligations to vendors and is included in other noncurrent assets in our unaudited condensed consolidated balance sheets.landlords.
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GAMESTOP CORP.
CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table provides a reconciliation of cash, and cash equivalents and restricted cash in the condensed consolidated balance sheets to total cash, and cash equivalents and restricted cash in the condensed consolidated statements of cash flows (in millions):
May 2,
2020		May 4,
2019		February 1,
2020
Cash and cash equivalents$570.3  $543.2  $499.4  
Restricted cash (included in prepaid expenses and other current assets)—  —  0.3  
Restricted cash (included in other noncurrent assets)13.6  13.2  13.8  
Total cash and cash equivalents and restricted cash in the statements of cash flows$583.9  $556.4  $513.5  
May 1,
2021		May 2,
2020		January 30,
2021
Cash and cash equivalents$694.7 $570.3 $508.5 
Restricted cash57.4 0 110.0 
Long-term restricted cash18.7 13.6 16.5 
Total cash, cash equivalents and restricted cash in the statements of cash flows$770.8 $583.9 $635.0 
Assets Held for SaleHeld-for-Sale
AsOur corporate aircraft was classified as assets held-for-sale as of May 2, 2020 we classified our corporate aircraft as assets held for sale, whichand had an estimated fair value, less costs to sell, of $9.1 million. The reduction in fair value from $11.8We recognized impairment charges of $2.7 million as of February 1,on the corporate aircraft during the 13 weeks ended May 2, 2020, waswhich were partially attributable to recent economic impacts associated with the COVID-19 pandemic. Our corporate aircraft was sold onOn June 5, 2020, forwe sold the corporate aircraft and received net cash proceeds from the sale totaling $8.6 million, net of costs to sell. NaN gain or loss was recognized upon the sale in the second quarter in fiscal 2020.
Property and Equipment, Net
Accumulated depreciation related to our property and equipment totaled $1,109.9 million, $1,172.4 million $1,247.9 million and $1,190.1$1,117.7 million as of May 1, 2021, May 2, 2020 May 4, 2019 and February 1, 2020,January 30, 2021, respectively.
We periodically review our property and equipment when events or changes in circumstances indicate that its carrying amounts may not be recoverable or its depreciation or amortization periods should be accelerated. We assess recoverability based on several factors, including our intention with respect to our stores and those stores’ projected undiscounted cash flows. An impairment loss is recognized for the amount by which the carrying amount of the assets exceeds its fair value, determined based on an estimate of discounted future cash flows. Weflows or readily available market information for similar assets. NaN impairment losses were recorded impairmentduring the 13 weeks ended May 1, 2021. Impairment losses were recorded totaling $0.7 million during the first quarter13 weeks ended May 2, 2020.
At-the-Market Equity Offering
During the 13 weeks ended May 1, 2021, we sold 3,500,000 shares of fiscal 2020.common stock under our "at-the-market" equity offering program (the "ATM Offering"). We generated $556.7 million in gross proceeds from the ATM Offering and paid fees to the sales agent of $5.0 million. Additionally, we incurred $0.2 million in other administrative fees in connection with the ATM Offering during the 13 weeks ended May 1, 2021 which is included in selling, general and administration expenses on the consolidated statement of operation. We have used, and intend to continue to use, the $551.7 million in net proceeds generated from the ATM Offering for working capital and general corporate purposes, including repayment of indebtedness, funding our transformation initiatives and product category expansion efforts, capital expenditures and the satisfaction of our tax withholding obligations upon the vesting of shares of restricted stock held by our executive officers and other employees.
Discontinued Operations and Dispositions
During the fourth quarter of fiscal 2018, we divested ofsold our Spring Mobile business. The historic results of Spring Mobile are presented as discontinued operations, which primarily consist of residual wind-down costs for all periods presented. The net loss from discontinued operations for the first quarter of fiscal13 weeks ended May 2, 2020 and 2019 consisted of $0.8 million and $0.8 million in selling, general and administrative expenses respectively and $0.2 million and $0.1 million in income tax benefit, respectively.
Adoption There were no discontinued operations during the first fiscal quarter of New Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was further updated and clarified by the FASB through the issuance of additional related ASUs. This ASU requires financial assets measured at amortized cost to be presented at the net amount to be collected with the recognition of an allowance for credit losses expected to be incurred over an asset's lifetime based on relevant information about past events, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We adopted this new standard, effective February 2, 2020, using the modified-retrospective approach. The adoption of this standard did not have a material impact on our consolidated financial statements.2021.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard is intended to simplify the accounting and disclosure requirements for income taxes by eliminating various exceptions in accounting for income taxes as well as clarifying and amending existing guidance to improve consistency in application of ASC 740. The provisions of ASU 2019-12 are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. We are currently evaluating theThe adoption of this standard is not expected to result in a material impact that ASU 2019-12 will have on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This standard provides practical expedients for contract modifications with the transition from reference rates, such as LIBOR, that are expected to be discontinued. This guidance is applicable for our revolving line of credit, which uses LIBOR as a reference rate. The provisions of ASU 2020-04 are effective as of March 12, 2020 and may be adopted
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
prospectively through December 31, 2022. We are currently evaluating the impact that ASU 2020-04 will have on our consolidated financial statements.

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CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
2.    COVID-19 Impacts
The near-term macroeconomic conditions have been adversely impacted by the emergence of a novel coronavirus, identified as COVID-19, which was declared a global pandemic by the World Health Organization in March 2020. In efforts to mitigate the continued spread of the virus, numerous governments in geographies where we operate have imposed quarantines, stay-at-home orders, travel restrictions and other similar measures in attempts to limit physical human interaction, often referred to as social distancing. To comply with these measures,Throughout fiscal 2020, we temporarily closed stores or limited store operations at various times across our 4 operating segments. During the first fiscal quarter of 2021, temporary closures were limited to certain jurisdictions in Europe as well as in Canada and New Zealand, which became effectiveCanada. Although certain stores experienced temporary closures during March 2020. In the United States, effective March 22, 2020, all storefronts were temporarily closed to customers, however, in manyfirst fiscal quarter of 2021, some of our stores we continuedoffered and continue to process orders offeringoffer curbside pick-up, ship from store and e-commerce delivery options. The store locationspick-up. We remain vigilant in Australia have remained opened to the general public and have not been negatively impacted by theour compliance with COVID-19 restrictions asregulations across our other segments and New Zealand.operating regions.
Impact on Operating Results and Asset Recoverability
In addition to our revenues and operating income for the 13 weeks ended May 2, 2020 being adversely impacted, we currently believe that these impacts could continue through the majority of our second fiscal quarter ending August 1, 2020. While the gaming industry has not been as severely impacted by the COVID-19 pandemic as certain other consumer businesses, store closures during the stay-at-home orders in certain countries continue to adversely impact our results of operations during the 13 weeks ended May 1, 2021. During the first fiscal quarter of 2021, we have taken proactive measurescontinued to align inventory purchases with demand, reduce discretionary spending and institute temporary pay reductions to partially offsetevaluate the impact of the store closures. The aggregation of these events caused a review for potential impairments ofon our assets, including accounts receivable, inventory, and long-lived assets, primarily consisting of store-level property and equipment and right-of-use assets under existing operating leases. As a result of this asset impairment analysis, we recognized impairment charges for 76 stores for a total of $1.2 million.assets. In addition, the fair value of our corporate aircraft, which was classified as held for sale during the period, was reduced from $11.8 million asfirst fiscal quarter of February 1, 20202021, we continued to $9.1 million as of May 2, 2020, which was partially attributable to the current economic impacts associated with the COVID-19 pandemic.
Additionally, we assessedassess the likelihood of realizing the benefits of our deferred tax assets. We estimate the realizability of our deferred tax assets using several factors, including the weight of available evidence, which includestakes into consideration cumulative book losses recognized in certain jurisdictions, and projections of future taxable income in thosecertain jurisdictions. While our view of our longer-term operating outlook has not been significantly impacted by COVID-19, our ability to recover these deferred tax assets depends on several factors, including our results of operations, in both the short-term and long-term. As a result of this analysis, we recordedcontinue to maintain a full valuation allowance primarily associated with U.S.on all of our net deferred tax assets of $53.0 million. See Note 10, “Income Taxes" for further information.
We also evaluated our existing short-term assets, particularly accounts receivable and inventory.
Accounts receivable are mainly comprised of bankcard receivables and vendor allowances. Given the nature of these receivables and the credit worthiness of the payee, the COVID-19 pandemic did not significantly impact the estimates of allowances for doubtful accounts.
Merchandise inventories are carried at the lower of cost or market generally using the average cost method. We are required to record valuation adjustments to inventory to reflect potential obsolescence or over-valuation as a result of cost exceeding market. In valuing inventory, we consider quantities on hand, recent sales, potential price protections, returns to vendors and other factors. As we believe our store closures are temporary and given the nature of our products, the COVID-19 pandemic did not significantly impact our estimates of inventory valuation. During the 13 weeks ended May 2, 2020, we recorded $13.5 million related to the provision for inventory reserves and obsolescence compared to $9.6 million in the prior year period.assets.
Liquidity and Other Impacts
As of May 2, 2020,1, 2021, we had $570.3total unrestricted cash on hand of $694.7 million, $76.1 million of restricted cash and cash equivalents. We also have availabilityan additional $99.9 million of available borrowing capacity under our revolving credit facility that provides us additional liquidity throughoutfacility. On March 15, 2021, we repaid our outstanding borrowings of $25.0 million under our revolving credit facility. See Note 6, "Debt," for further information.
During the course13 weeks ended May 1, 2021, we completed the ATM Offering which generated aggregate net proceeds of $551.7 million. See Note 1, "General Information" for further details. Additionally, during the 13 weeks ended May 1, 2021, we repaid the remaining $73.2 million aggregate principal amount of our outstanding 6.75% unsecured senior notes due in March 2021, (the "2021 Senior Notes") and we completed the voluntary early redemption of the yearremaining $216.4 million balance of our outstanding 10.0% secured senior notes due 2023 ("2023 Senior Notes"). See Note 6, "Debt" for further details.
In light of our efforts to fundstrengthen our operations. As mentioned above,balance sheet including the paydown of our debt obligations, we have taken actions to align expenses and inventory levels given the impacts of the current operating environment and have projectedproject we will have adequate liquidity for the next 12 months and the foreseeable future to maintain normal operations. Additionally, on June 5, 2020, we announced an exchange offer for our existing Senior Notes, due in March 2021. See Note 11, "Subsequent Events," for further details on the exchange offer and related impacts to our scheduled debt maturities.
During the 13 weeks ended May 2, 2020, we received an immaterial amount of COVID-19-related rent concessions. We are continuing to evaluate our accounting treatment of these concessions. While negotiations are ongoing with landlords in various markets in seeking commercially reasonable lease concessions given the current environment, there have not yet been material confirmed concessions for the remainder of the year.

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CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which among other things, provides employer payroll tax credits for wages paid to employees who are unable to work during the COVID-19 pandemic and options to defer payroll tax payments. Based on a preliminary evaluation of the CARES Act, the Company qualifies for the deferral of payroll and other tax payments and is continuing to evaluate certain employer payroll tax credits.
The COVID-19 pandemic remains a rapidlyan evolving situation. Wesituation and its impact on our business, operating results, cash flows and financial conditions will havedepend on the geographies impacted by the virus, the ongoing economic effect of the pandemic, the additional economic stimulus programs introduced by governments, and the timing of the post-pandemic economic recovery. Even as we continue to comply with all governmental health and safety measures required to resume full operations and ensure the safety ofrequirements for our associates and customers. Additionally,customers while resuming and maintaining substantially full operations, the continuationpersistence and potential resurgence of the outbreakCOVID-19 pandemic may cause prolongedrequire us to temporarily close stores again in future periods of store closures andor introduce modified operating schedules and may result in changes inimpact customer behaviors, including a potential reduction in consumer discretionary spending. This may lead to increasedThese developments could increase asset recovery and valuation risks. Further, the uncertainties in the global economy could impact the financial viability of our suppliers, which may interrupt our supply chain and require other changes to our operations.
Although In light of the foregoing, the extent and duration of the impact of the COVID-19 pandemic, on our business and operationsresponses of governments, customers, suppliers and the overall impact to our customers remains uncertain, the continued spread of COVID-19 and the imposition of related public health measures and restrictionsother third parties, may materially adversely impact our business, financial condition, results of operations and cash flows.
3.    Revenue
At the end of fiscal 2019, we revised the categories of our similar products, as presented below, to better align with management's view of the business. Prior periods have been reclassified to conform to the current period presentation. Net sales by significant product category for the periods indicated is as follows (in millions):
13 Weeks Ended
 May 2, 2020May 4, 2019
Hardware and accessories (1)
$513.1  $656.5  
Software (2)
417.0  733.1  
Collectibles90.9  158.1  
Total$1,021.0  $1,547.7  
13 Weeks Ended
 May 1,
2021		May 2,
2020
Hardware and accessories (1)
$703.5 $513.1 
Software (2)
397.9 417.0 
Collectibles175.4 90.9 
Total$1,276.8 $1,021.0 

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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, and the operations of our Simply Mac stores, which were sold in September 2019.electronics.
(2)    Includes sales of new and pre-owned video game software, digital software and PC entertainment software.
See Note 9, "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 Game Informer® magazine. Revenues do not include sales tax or other taxes collected from customers. We expect to recognize revenue in future periods for remaining performance obligations we have associated with unredeemed gift cards, trade-in credits, reservation deposits and our PowerUp Rewards loyalty program (collectively, "unredeemed customer liabilities"), extended warranties and subscriptions to our Game Informer® magazine. These performance obligations are included in accrued liabilities and other current liabilities in our consolidated balance sheets.
Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time our customers redeem gift cards, trade-in credits, reservationcustomer deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance. As of May 2, 20201, 2021 and May 4, 2019,2, 2020, our unredeemed customer liabilities totaled $209.7$200.3 million and $237.4$209.7 million, respectively.
We offer extended warranties on certain new and pre-owned video game products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a straight-line basis over the life of the contract. As of May 2, 20201, 2021 and May 4, 2019,2, 2020, our deferred revenue liability related to extended warranties totaled $60.1$81.0 million and $68.9$60.1 million, respectively.
Performance obligations associated with subscriptions to our Game Informer® magazine are satisfied when monthly magazines are delivered in print form or made available in digital format. The significant majority of our customers’customer subscriptions isare for 12 monthly issues. As of May 2, 20201, 2021 and May 4, 2019,2, 2020, we had deferred revenue of $34.8$41.3 million and $43.9$34.8 million, respectively, associated with our Game Informer® magazine.
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CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Significant Judgments and Estimates
We accrue PowerUp Rewards loyalty points at the estimated retail price per point, net of estimated breakage, which can be redeemed by our loyalty program members for products that we offer. The estimated retail price per point is based on the actual historical retail prices of product(s) purchased through the redemption of loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rate.rates.
Contract Balances
Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with gift cards, extended warranties and subscriptions to our Game Informer® magazine. The opening balance, current period changes and ending balance of our contract liabilities are as follows (in millions):
May 2, 2020May 4, 2019May 1,
2021		May 2,
2020
Contract liability beginning balanceContract liability beginning balance$339.2  $376.9  Contract liability beginning balance$348.2 $339.2 
Increase to contract liabilities (1)
Increase to contract liabilities (1)
151.5  215.2  
Increase to contract liabilities (1)
208.7 151.5 
Decrease to contract liabilities (2)
Decrease to contract liabilities (2)
(184.5) (239.9) 
Decrease to contract liabilities (2)
(234.5)(184.5)
Other adjustments (3)
Other adjustments (3)
(1.6) (2.0) 
Other adjustments (3)
0.2 (1.6)
Contract liability ending balanceContract liability ending balance$304.6  $350.2  Contract liability ending balance$322.6 $304.6 

(1)    Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to Game Informer® and extended warranties sold.
(2)    Includes redemptions of gift cards, trade-in credits, loyalty points and reservationcustomer deposits as well as revenues recognized for Game Informer® and extended warranties. During the 13 weeks ended May 1, 2021, there were $23.5 million of gift cards redeemed that were outstanding as of January 30, 2021. During the 13 weeks ended May 2, 2020, there were $21.2 million of gift cards redeemed that were outstanding as of February 1, 2020. During the 13 weeks ended May 4, 2019, there were $28.3 million of gift cards redeemed that were outstanding as of February 2, 2019.
(3)    Primarily includes foreign currency translation adjustments.
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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. 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 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 foreign currency contracts, Company-owned life insurance policies we own that havewith a cash surrender value, and certain nonqualified deferred compensation liabilities.
We value 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 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.
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CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Our assets and liabilities measured at fair value on a recurring basis as of May 1, 2021, May 2, 2020 May 4, 2019 and February 1, 2020,January 30, 2021, utilize Level 2 inputs and include the following (in millions):
May 2, 2020May 4, 2019February 1, 2020
Assets
Foreign currency contracts(1)
$2.4  $3.5  $1.4  
Company-owned life insurance(2)
3.6  15.1  4.1  
Total assets$6.0  $18.6  $5.5  
Liabilities
Foreign currency contracts(3)
$1.1  $2.0  $0.3  
Nonqualified deferred compensation(3)
0.9  1.2  1.0  
Total liabilities$2.0  $3.2  $1.3  
May 1,
2021		May 2,
2020		January 30, 2021
Assets
Foreign currency contracts(1)
$2.7 $2.4 $2.5 
Company-owned life insurance(2)
2.8 3.6 2.7 
Total assets$5.5 $6.0 $5.2 
Liabilities
Foreign currency contracts(3)
$0.8 $1.1 $2.4 
Nonqualified deferred compensation(3)
0.6 0.9 0.6 
Total liabilities$1.4 $2.0 $3.0 

(1)     Recognized in prepaid expenses and other current assets in our unaudited condensed consolidated balance sheets.
(2)    Recognized in other non-current assets in our unaudited condensed consolidated balance sheets.
(3)    Recognized in accrued liabilities and other current liabilities in our unaudited condensed consolidated balance sheets.
We use forward exchange contracts to manage currency risk primarily related to intercompany loans and third party accounts payable denominated in non-functional currencies. These 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 loansbalances denominated in foreign currencies. The total gross notional value of derivatives related to our foreign currency contracts was $239.2 million, $213.9 million $259.7 million and $144.6$206.9 million as of May 1, 2021, May 2, 2020 May 4, 2019 and February 1, 2020,January 30, 2021, respectively.
Activity related to the trading of derivative instruments and the offsetting impact of related intercompany loansbalances denominated in foreign currencies recognized in selling, general and administrative expense is as follows (in millions):
 13 Weeks Ended
 May 2,
2020		May 4,
2019
Gains on the changes in fair value of derivative instruments$2.4  $2.4  
Losses on the re-measurement of related intercompany loans denominated in foreign currencies(2.1) (2.4) 
Net gains$0.3  $—  
 13 Weeks Ended
 May 1,
2021		May 2,
2020
Gains on the changes in fair value of derivative instruments$2.5 $2.4 
Losses on the re-measurement of related intercompany loans and third-party accounts payable denominated in foreign currencies(1.8)(2.1)
Net gains$0.7 $0.3 
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 and cash equivalent investments. We manage counterparty risk according to the guidelines and controls established under our comprehensive risk management and investment policies. We continuously
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
monitor our counterparty credit risk and utilize a number of different counterparties to minimize our exposure to potential defaults. We do not require collateral under derivative or investment agreements.
Assets that are Measured at Fair Value on a NonrecurringNon-recurring Basis
Assets that are measured at fair value on a nonrecurringnon-recurring basis relate primarily to property and equipment, operating lease right-of-use ("ROU") assets and other intangible 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 we determine that impairment has occurred, the carrying value of the asset is reduced to its fair value.
During the 13 weeks ended May 2, 2020,1, 2021, we recognized impairment charges totaling $1.2$0.6 million associated with store-level ROU assets, to reflect their fair values of 0. For further details regarding these store-level impairments, see Note 2, "COVID-19 Impacts."values. During the 13 weeks ended May 2, 2020, we recognized $1.2 million of impairment charges associated with store-level ROU and property and equipment assets to reflect their fair values. We also recognized $2.7 million of impairment charges of $2.7 million related to our corporate aircraft to reflect its fair value of $9.1 million. Ourmillion as of May 2, 2020. The corporate aircraft iswas classified as assets held for saleheld-for-sale in our unaudited condensed consolidated balance sheet as of May 2, 2020. We did not record any impairment charges related to assets measured at fair valuesold our corporate aircraft on a nonrecurring basis during the 13 weeks ended May 4, 2019.

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CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 5, 2020.
Other Fair Value Disclosures
The carrying values of our cash equivalents, net receivables, net, accounts payable and notes payableshort-term borrowings approximate thetheir fair valuevalues due to their short-term maturities.
As of May 2, 2020 our unsecured 6.75% senior notes due in 2021 had a net carrying value of $417.2 million and a fair value of $330.5 million. The fair value of our 6.75% senior notes was determined based on observable inputs (Level 2), including quoted market prices obtained through an external pricing source which derives its price valuations from daily marketplace transactions, adjusted to reflect the spreads of benchmark bonds, credit risk and certain other variables.
5.    Leases
We conduct the substantial majority of our business with leased real estate properties, including retail stores, warehousefulfillment and distribution facilities and office space. We also lease certain equipment and vehicles. These are generally leased under noncancelable agreements and include various renewal options for additional periods. These agreements generally provide for minimum, and in some cases, percentage rentals, and require us to pay insurance, taxes and other maintenance costs. Percentage rentals are based on sales performance in excess of specified minimums at various stores and are accounted for in the period in which the amount of percentage rentals can be accurately estimated. All of our lease agreements are classified as operating leases.
Effective February 3, 2019, we adopted ASC 842, Leases. Under ASC 842, fixed payments associated with our operating leases are included in operating lease right-of-use ("ROU") assets and both current and noncurrent operating lease liabilities on the balance sheet. We determine if an arrangement is considered a lease at inception. We recognize ROU assets, on the commencement date based on the present value of future minimum lease payments over the lease term, including reasonably certain renewal options. As the rate implicit in the lease is not readily determinable for most leases, we utilize our incremental borrowing rate ("IBR") to determine the present value of future payments. The incremental borrowing rate represents a significant judgment that is based on an analysis of our credit rating, country risk, corporate bond yields, the effect of collateralization, as well as comparison to our borrowing rates. For our real estate leases, we do not separate the components of a contract, thus our future payments include minimum rent payments and fixed executory costs. For our non-real estate leases, future payments include only fixed minimum rent payments. We record the amortization of our ROU assets and the accretion of our lease liabilities as a single lease cost on a straight-line basis over the lease term, which includes option terms we are reasonably certain to exercise. We recognize our cash or lease incentives as a reduction to the ROU asset. We assess ROU assets for impairment in accordance with our long-lived asset impairment policy, which is performed periodically or when events or changes in circumstances indicate that the carrying amount may not be recoverable.
Rent expense under operating leases was as follows (in millions):
13 Weeks Ended
May 2, 2020May 4, 2019
Operating lease cost$81.4  $86.2  
Variable lease cost (1)
20.9  24.3  
Total rent expense$102.3  $110.5  
13 Weeks Ended
May 1,
2021		May 2,
2020
Operating lease cost$74.9 $81.4 
Variable lease cost (1)
17.5 20.9 
Total rent expense$92.4 $102.3 

(1)    Variable lease cost primarily includes percentage rentals and variable executory costs.
During the 13 weeks ended May 2, 2020 and May 4, 2019, we had cash outflows of $31.5 million and $84.3 million, respectively, associated with operating leases. Refer to Note 2, "COVID-19 Impacts" as it pertains to impacts of rent obligations due to COVID-19. We recognized $10.3 million and $38.6 million, respectively, of ROU assets that were obtained in exchange for operating lease obligations. During the 13 weeks ended May 2, 2020, we recognized $0.5 million of store-level ROU asset impairment charges. We did not record any impairment charges related to ROU assets during the 13 weeks ended May 4, 2019.
6.    Debt
The weighted-average remaining lease term, which includes reasonably certain renewal options, and the weighted-average discount rate for operating leases included in the measurementcarrying value of our lease liabilities,debt is comprised as of May 2, 2020, May 4, 2019, and February 1, 2020, were as follows:
May 2, 2020May 4, 2019February 1, 2020
Weighted-average remaining lease term (years)(1)
4.64.64.7
Weighted-average discount rate4.2 %4.6 %4.1 %
follows (in millions):
May 1,
2021		May 2,
2020		January 30, 2021
Revolving credit facility due 2022$0 $135.0 $25.0 
French term loans due 2021(1)
48.1 0 48.6 
2021 Senior Notes principal amount0 418.4 73.2 
2023 Senior Notes principal amount0 0 216.4 
Less: Senior Notes unamortized debt financing costs0 (1.2)(0.5)
Total debt, net$48.1 $552.2 $362.7 
Less: short-term debt and current portion of long-term debt(2)
(48.1)(552.2)(146.7)
Long-term debt, net$0 $0 $216.0 

(1)    The weighted-average remaining leaseThese term is weighted based on the lease liability balanceloans are government subsidized low interest loans that may be extended, subject to specified conditions, for each lease as of May 2, 2020, May 4, 2019 and February 1, 2020. This weighted average calculation differs from our simple average remaining lease term dueup to the inclusion of reasonably certain renewal options and the effect of the lease liability value of longer term leases.five additional years at Micromania SAS's request.
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CONDENSED NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Expected lease payments associated with our operating lease liabilities, excluding percentage rentals, as of May 2, 2020, are as follows (in millions):
Period
Operating Leases (1)
Remainder of Fiscal Year 2020, as of May 2, 2020$238.8 
Fiscal Year 2021186.7 
Fiscal Year 2022130.6 
Fiscal Year 202393.3 
Fiscal Year 202466.0 
Thereafter105.0 
Total remaining lease payments820.4 
Less: Interest(77.1)
Present value of lease liabilities (2)
$743.3 

(1) Operating lease payments exclude legally binding lease payments for leases signed but not yet commenced.
(2)    The present value of lease liabilities consist of $249.4 million classified as current portion of operating lease liabilitiesCurrent period include the French term loans due July 2021 and $493.9 million classified as long-term operating lease liabilities.
6. Debt
Senior Notes
The carrying value of our long-term debt is comprised as follows (in millions):
May 2, 2020May 4, 2019February 1, 2020
2021 Senior Notes principal amount$418.4  $471.9  $421.4  
Less: Unamortized debt financing costs(1.2) (3.0) (1.6) 
$417.2  $468.9  $419.8  
Less: Current portion(417.2) —  —  
Long-term debt, net$—  $468.9  $419.8  
October 2021. Prior periods include advances under the revolving credit facility due November 2022, the French term loans due July 2021 Senior Notes. In March 2016, we issued $475.0 million aggregate principal amount of unsecured 6.75% senior notes due March 15,and October 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 termnet of the notes. The associated unamortized debt financing costs.
2021 Senior Notes were sold in a private placement and are not registered under the Securities Act of 1933 (the "Securities Act"). TheDebt Payments
On March 15, 2021, Senior Notes were offered in the United States 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. In June 2020, we initiated the exchange offer for the 2021 Senior Notes with different terms,repaid at maturity and covenants than those existing in the 2021 Senior Notes. For details related to the exchange offer, see Note 11, "Subsequent Events."
During the 13 weeks ended May 2, 2020, we repurchased $3.0$73.2 million outstanding principal amount of our 2021 Senior Notes.
On April 30, 2021, we completed the voluntary early redemption of $216.4 million outstanding principal amount of our 2023 Senior Notes. This voluntary early redemption covered the entire amount of then outstanding 2023 Senior Notes, which represented all of our long-term debt. In connection with the voluntary early redemption of our 2023 Senior Notes, we paid approximately $219.1 million in open market transactions at prices ranging from 71.5% to 78.9%aggregate consideration, including accrued and unpaid interest. In connection with the voluntary early redemption of par value,the 2023 Senior Notes, we paid a $17.8 million make-whole premium which is included in interest expense in our consolidated statements of which $0.5operations. Additionally, we accelerated amortization of $0.4 million were retireddeferred financing costs associated with our 2023 Senior Notes.
French Term Loans
During fiscal 2020, our French subsidiary, Micromania SAS, entered into 6 separate unsecured term loans for a total of €40.0 million ($48.1 million as of May 2, 2020,1, 2021). The term loans all bear interest at 0%. NaN of the term loans totaling €20.0 million mature in July 2021 and the other 3 term loans totaling €20.0 million mature in October 2021, and all of them may be extended, subject to specified conditions, for up to five additional years at Micromania SAS's request. In connection with any such extension, the interest rate would increase to a rate to be determined at the time of the extension. The French government has guaranteed 90% of the term loans pursuant to a state guaranteed loan program instituted in connection with the remaining $2.5 million retiredCOVID-19 pandemic.
Each of Micromania SAS's term loans, as described above, restrict the ability of May 21, 2020. Additionally, subsequentMicromania SAS to make distributions and loans to its affiliates, and include various events that would result in the 13 weeks ended May 2, 2020, we repurchased $3.8 million of our 2021 Senior Notes in open market transactions through May 8, 2020, which were retired as of May 21, 2020. During the 13 weeks ended May 4, 2019, we repurchased $3.1 million of our 2021 Senior Notes in open market transactions at prices ranging from 99.6% to 101.0% of par value.
The indenture governing the 2021 Senior Notes does not contain financial covenants but does 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 2021 Senior Notes. In addition, the indenture restricts payments of dividends to stockholders (other than dividends payable in shares of capital stock) if oneautomatic acceleration 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 indenture from the date of the indenture governing the 2021 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 indenture. These restrictions are subject to exceptions and qualifications,loans thereunder, 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
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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 indenture contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgmentsany principal or interest when due, acceleration of other indebtedness, a change of control and certain events of bankruptcy, insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the 2021 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.receivership events.
Revolving Credit Facility
We maintain an asset-based revolving credit facility (the “Revolver”) with a borrowing base capacity ofup to $420 million and a maturity date of November 2022. The Revolver also includes a $200 million expansion feature and $50$100 million letter of credit sublimit, and allows for an incremental $50 million first-in, last-out facility. The applicable margins for prime rate loans range from 0.25% to 0.50% and, for the London Interbank Offered (“LIBO”("LIBO") rate loans, range from 1.25% to 1.50%. The Revolver is secured by substantially all of theour assets of GameStop Corp. and the assets of itsour domestic subsidiaries.
Borrowing availability under As of May 1, 2021, 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 providesapplicable margin was 0.25% for borrowing of up to 92.5% of the appraisal value during the period between July 15prime rate loans and October 15 of each year. Letters of credit reduce the amount available to borrow under the Revolver 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 20%, or is projected to be within six months after such payment or (2) excess availability under the Revolver is less than 15%, or is projected to be within six months after such payment, and the fixed charge coverage ratio, as calculated on a pro-forma basis1.19% for the prior 12 months, is 1.0:1.0 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 "Availability Reduction").LIBO rate loans.
The agreement governing our Revolver places certain restrictions on us and our subsidiaries, including, among others, 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 millionshare repurchases. Additionally, the agreement contains customary events of additional unsecured indebtednessdefault, including, among others, payment defaults, breaches of covenants and certain events of bankruptcy, insolvency and reorganization. The Revolver is also subject to be limited to $250a fixed charge coverage ratio covenant if excess availability is below certain thresholds (the "Availability Reduction").
As of May 1, 2021, we had 0 borrowings outstanding under the Revolver. During the first fiscal quarter of 2021, we repaid $25.0 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 0.50% above the highest of (a) the prime rate of the administrative agent, (b) the federal funds effective rate plus 0.50% and (c) the LIBO rate for a one month interest period as determined on such day plus 1.00%, and (2) for LIBO rate loans of 1.25% to 1.50% 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 commitmentborrowings under the Revolver. As of May 2, 2020, the applicable margin was 0.25% for prime rate loans and 1.25% for LIBO rate loans.
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 13 weeks ended May 2, 2020, we borrowed $150.0 million and repaid $15.0 million under our revolving credit facility. As of May 2, 2020,1, 2021, total availability under the Revolver after giving effect to the Availability Reduction was $4.8$99.9 million, with 0 outstanding borrowings of $135.0 million and outstanding standby letters of credit of $7.3$44.0 million. We are currently in compliance with the financial requirements ofall covenants in the Revolver. Subsequent to the 13 weeks ended May 2, 2020 we repaid an additional $35.0 million under our revolving credit facility, bringing our outstanding borrowings down to $100.0 million as of June 3, 2020.
Luxembourg Line of Credit
In September 2007, our Luxembourg subsidiary entered into a $20.0 million Uncommitted LineLetter of Credit (the “LineFacilities
Separately from the Revolver, we maintain uncommitted letter of Credit”)credit facilities 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 andcertain lenders that provide for the issuance of bank guarantees and letters of credit to support operations.and bank guarantees, at times supported by cash collateral. As of May 2, 2020, there were 0 cash overdrafts1, 2021, we had $38.2 million of outstanding under the Lineletters of Creditcredit and bank guarantees outstanding totaled $1.1 million.under facilities outside of the Revolver.
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7.    Commitments and Contingencies
Commitments
During the 13 weeks ended May 2, 2020,1, 2021, there were no material changes to our commitments as disclosed in our 20192020 Annual Report on Form 10-K.10-K except as discussed in Note 6, "Debt."
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Contingencies
Legal Proceedings
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. 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.
8.    Earnings Per Share
Basic 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 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 and unvested restricted stock 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. A net loss from continuing operations causes all potentially dilutive securities to be antidilutive. We have certain undistributed stock awards that participate in dividends on a nonforfeitablenon-forfeitable basis, however, their impact on earnings per share under the two-class method is negligible.
A reconciliation of shares used in calculating basic and diluted net income (loss)loss per common share is as follows (in millions):
13 Weeks Ended 13 Weeks Ended
May 2,
2020		May 4,
2019		 May 1,
2021		May 2,
2020
Weighted-average common shares outstandingWeighted-average common shares outstanding64.5  102.4  Weighted-average common shares outstanding66.0 64.5 
Dilutive effect of stock options and restricted stock awardsDilutive effect of stock options and restricted stock awards—  0.1  Dilutive effect of stock options and restricted stock awards0 0 
Weighted-average diluted common shares outstandingWeighted-average diluted common shares outstanding64.5  102.5  Weighted-average diluted common shares outstanding66.0 64.5 
Anti-dilutive stock options and restricted stock awardsAnti-dilutive stock options and restricted stock awards1.9  0.8  Anti-dilutive stock options and restricted stock awards2.6 2.8 
Shares of restricted stock granted by us are considered to be legally issued and outstanding as of the date of grant, notwithstanding that the shares remain subject to risk of forfeiture if the vesting conditions for such shares are not met, and are included in the number of shares of Class A common stock outstanding disclosed on the cover page of this Quarterly Report on Form 10-Q as of June 1, 2021. Weighted average common shares outstanding excludes time-based and performance-based unvested shares of restricted Class A common stock, as restricted shares are treated as issued and outstanding for financial statement presentation purposes only after such shares have vested and, therefore, have ceased to be subject to a risk of forfeiture. As of May 1, 2021, May 2, 2020 and January 30, 2021 there were 2.6 million, 2.8 million and 4.6 million, respectively, of unvested shares of restricted stock. Accordingly, as of May 1, 2021, May 2, 2020 and January 30, 2021 there were 71.9 million, 67.4 million and 69.9 million, respectively, of shares of Class A common stock, including unvested restricted shares, legally issued and outstanding.

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9.    Segment Information
We operate our business in 4 geographic segments: United States, Canada, Australia and Europe.
We identifyidentified segments based on a combination of geographic areas and management responsibility. Segment results for the United States include retail operations in 50 states and Guam; our e-commerce website www.gamestop.com;operations; and Game Informer magazine; and Simply Mac, which was sold in September 2019.® magazine. The United States segment also includes general and administrative expenses related to our corporate headquarters in Grapevine, Texas. Segment results for Canada include retail and e-commerce operations in Canada and segment results for Australia include retail and e-commerce operations in Australia and New Zealand. Segment results for Europe include retail and e-commerce operations in 6 European countries for the 13 weeks ended May 1, 2021 and 10 European countries.countries for the 13 weeks ended May 2, 2020. We measure segment profit using operating earnings, which is defined as income from continuing operations before intercompany royalty fees, net interest expense and income taxes. Transactions between reportable segments consist primarily of royalties, management fees, intersegment loans and related interest. There were 0no material intersegment sales during the 13 weeks ended May 2, 20201, 2021 and May 4, 2019.2, 2020.
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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Segment information for the 13 weeks ended May 2, 20201, 2021 and May 4, 20192, 2020 is as follows (in millions):
United
States		CanadaAustraliaEuropeConsolidated
13 weeks ended May 1, 2021
Net sales$966.3 $61.9 $114.8 $133.8 $1,276.8 
Operating loss(3.6)(2.9)(0.4)(33.9)(40.8)
13 weeks ended May 2, 2020
Net sales$760.6 $39.7 $113.7 $107.0 $1,021.0 
Operating loss(51.1)(9.4)(0.5)(47.0)(108.0)
United
States		CanadaAustraliaEuropeConsolidated
13 weeks ended May 2, 2020
Net sales$760.6  $39.7  $113.7  $107.0  $1,021.0  
Operating loss(51.1) (9.4) (0.5) (47.0) (108.0) 
13 weeks ended May 4, 2019
Net sales$1,143.2  $72.6  $101.6  $230.3  $1,547.7  
Operating earnings (loss)52.2  (5.3) (8.2) (21.2) 17.5  


10.    Income Taxes

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aidThe Coronavirus Aid, Relief, and economic stimulus. These measures include deferring the due dates of tax payments and other changes to their income and non-income-based tax laws as well as providing direct government assistance through grants and forgivable loans. The CARESEconomic Securities Act (the "CARES Act"), which was enacted on March 27, 2020 in the U.S., includesUnited States, included measures to assist companies, including temporary changes to income and non-income-based tax laws. With respect to the CARES Act, we currently expect to benefithave benefited from the deferral of certain payroll taxes, through the end of calendar year 2020, the carryback of a fiscal 2020 net operating loss, for fiscal 2020, the modification of limitation on business interest and the technical correction with respect to qualified improvement property. As a result of the carryback of NOLs allowed by the CARES Act, U.S. federal income tax receivable increased to $157.8 million as of May 1, 2021 compared to $22.9 million as of May 2, 2020. U.S. federal income tax receivable is included in prepaid expenses and other current assets in our consolidated balance sheet.

Our interim tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events and/or adjustments that may occur during the quarter.We recognized an income tax expense of $1.3 million, or (2.0%), for the 13 weeks ended May 1, 2021 compared to an income tax expense of $50.4 million, or (43.9%), for the 13 weeks ended May 2, 2020. For the 13 weeks ended May 1, 2021, our effective income tax rate of (2.0%) is primarily due to not providing tax benefits on current period losses because of valuation allowances recorded in prior periods, as well as forecasted income taxes due in certain limited foreign jurisdictions within which we operate. Our effective tax rate of (43.9%) for the 13 weeks ended May 2, 2020 compared to $2.3 million for the 13 weeks ended May 4, 2019. Our effective income tax rate decreased to (43.9)% for the 13 weeks ended May 2, 2020 compared to 23.5% for the 13 weeks ended May 4, 2019. The decrease in the effective income tax rate compared to the prior year quarter was primarily driven by thedue to having recorded significant drop in pre-tax book income, the establishment of a full valuation allowance on U.S. deferredincreases, partially offset by certain tax assets, impacts ofbenefits related to the CARES Act, and the relative mix of earnings across the jurisdictions within which we operate.

We assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of existing deferred tax assets. We have established valuation allowances in certain foreign jurisdictions where the Company has determined existing deferred tax assets are not more likely than not to be realized. During the current quarter period, we established a full valuation allowance on all the U.S. and state deferred tax assets in the amount of $53.0 million. We continue to evaluate the realizability of all deferred tax assets on a jurisdictional basis as it relates to expected future earnings. Should the Company fail to achieve its expected earnings in the coming periods, it may be necessary to establish a valuation allowance against some or all of its deferred tax assets in those jurisdictions not currently subject to a valuation allowance.

during that period.
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11. Subsequent Events
On June 5, 2020, the Company launched an offer to exchange (the “Exchange Offer”) any and all of its outstanding $414.6 million aggregate principal amount of 6.75% senior notes due 2021 (the “Existing Notes”) by eligible holders for up to $414.6 million of newly issued 10.0% senior secured notes due 2023 (the “New Notes”). The New Notes will be guaranteed on the same basis as the Existing Notes and will be secured by first-priority liens on most of the Company’s and the Guarantors’ assets other than the Company’s and the Guarantors’ credit card receivables, inventory, pledged deposit accounts and related assets (subject to certain exceptions, the “ABL Collateral”) and real property, and by second-priority liens on the ABL Collateral, in each case, subject to certain exceptions and permitted liens. Holders that validly tender and do not withdraw their Existing Notes prior to 5:00 p.m. New York City time on June 17, 2020 (the “Early Tender Date”) and that are accepted for exchange will receive $1,000 principal amount of New Notes for each $1,000 principal amount of Existing Notes and their related consent to amend the indenture for the Existing Notes. Holders of Existing Notes who validly tender their Existing Notes subsequent to the Early Tender Date and that are accepted for exchange will receive $950 principal amount of New Notes for each $1,000 principal amount of Existing Notes and their related consent validly tendered prior to 11:59 p.m. New York City time on July 1, 2020 (the “Expiration Date”). The Early Tender Date and/or the Expiration Date may be extended at the sole discretion of the Company and the consummation of the Exchange Offer following the Expiration Date is subject to customary conditions, including the requisite consents to amend the indenture for the Existing Notes.
The closing of the Exchange Offer is conditioned on, among other things, the satisfaction or waiver of certain conditions set forth in the offering memorandum of the Exchange Offer. A copy of the press release announcing the Exchange Offer is attached to the Form 8-K filed with the Securities and Exchange Commission on June 5, 2020 as Exhibit 99.2.
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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ThePlease read the following discussion should be read in conjunctionand analysis of our financial condition and results of operations together with the information contained in our unaudited condensed consolidated financial statements including theand related notes thereto.included under Part I, Item 1 of this Quarterly Report on Form 10-Q.

The following discussion contains 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"). In some cases, forward-looking statements can be identified by the use of terms such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “pro forma,” “seeks,” “should,” “will” or similar expressions. Forward-looking statements include our current assumptions, expectations or forecasts of future events.

TheseForward-looking statements are only predictions based on current expectations and assumptions and involve known and unknown risks, uncertainties and other factors that may cause our 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. You should not place undue reliance on these forward-looking statements. The forward-looking statements involve a number of 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. 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. Factors that might cause such differences include, but are not limited to, those described under the heading “Risk Factors” in Exhibit 99.4 to the Form 8-K filed with the SEC on June 5, 2020, and include risks related to:
•macroeconomic pressures, including the effects of COVID-19 on consumer spending;
•the impact of the COVID-19 pandemic on our business and financial results;
•the economic, social and political conditions in the U.S. and certain international markets;
•the cyclicality of the video game industry;
•our dependence on the timely delivery of new and innovative products from our vendors;
•the impact of technological advances in the video game industry and related changes in consumer behavior on our sales;
•our ability to keep pace with changing industry technology and consumer preferences;
•the impact of international crises and trade restrictions and tariffs on the delivery of our products;
•our ability to obtain favorable terms from our suppliers;
•the international nature of our business;
•our dependence on sales during the holiday selling season;
•fluctuations in our results of operations from quarter to quarter;
•our ability to de-densify our global store base;
•our ability to renew or enter into new leases on favorable terms;
•the competitive nature of our industry;
•our ability to attract and retain executive officers and key personnel;
•the adequacy of our management information systems;
•our reliance on centralized facilities for refurbishment of our pre-owned products;
•our ability to react to trends in pop culture with regard to our sales of collectibles and our dependence on licensed products for a substantial portion of such sales;
•our ability to maintain security of our customer, employee or company information;
•potential harm to our reputation;
•our ability to maintain effective control over financial reporting;
•our vendors’ ability to provide marketing and merchandise support at historical levels;
•restrictions on our ability to purchase and sell pre-owned video games;
•potential decrease in popularity of certain types of video games;
•changes in our tariff, import/export regulations and global tax rate;
•potential future litigation and other legal proceedings;
•changes in accounting rules and regulations; and
•our ability to comply with federal, state, local and international law.

All forward-looking statements included or incorporated by reference in this Quarterly Report on Form 10-Q are based upon information available to us as of the date of this Quarterly Report on 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 Quarterly Report on Form 10-Q, except as required by law.

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OVERVIEW
GameStop Corp. (“GameStop,” “we,” “us,” “our,” or the “Company”), a Delaware corporation established in 1996, is the world's largest video gamea leading specialty retailer which operates approximately 5,300 stores across 14 countries, and offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles, in both physical and digital formats. GameStop also offers fans a wide variety of POP! vinyl figures, collectibles, boardoffering games and more. Through GameStop's unique buy-sell-trade program, gamers can trade in video game consoles, games,entertainment products through its e-commerce properties and accessories, as well as consumer electronics for cash or in-store credit. Our consumer product network also includes www.gamestop.com and Game Informer® magazine, the world's leading print and digital video game publication.thousands of stores.
We operate our business in four geographic segments: United States, Canada, Australia and 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 yearsyear ending January 29, 2022 ("fiscal 2021") and the fiscal year ended January 30, 2021 ("fiscal 2020") and February 1, 2020 ("fiscal 2019") each consist of 52 weeks. The discussion and analysis of 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 realized during the fourth fiscal quarter, which includes the holiday selling season.
Impact from COVID-19
COVID-19 has caused a dramatic decreaseThroughout fiscal 2020, we temporarily closed stores or limited store operations at various times across our four operating segments. During the first quarter of fiscal 2021, temporary closures were limited to certain jurisdictions in trafficEurope and salesCanada. Although certain stores experienced temporary closures during the 13 weeks ended May 2, 2020 as we temporarily closed1, 2021, some of our U.S. store locationsstores offered and continue to customer access, as well as store locationsoffer curbside pick-up. We remain vigilant in Canada, Europe and New Zealand. Our priority became protectingour compliance with COVID-19 regulations across our operating regions. We continue to prioritize the health and safety of our customers and team members. At the same time,members, including enhanced cleaning measures and expanded use of personal protective equipment at our stores, shared service centers and distribution centers across all geographies where we took several steps to adapt to still serve our customers via our omnichannel platform by enhancing our online capabilities and curbside pick-up options while also lowering our purchase and expense levels to correspond with the lower demand. As we cannot predict the duration or scope of the COVID-19 pandemic and its impact on our customers, vendors and partners, the impact could be material.operate. We expect that we will continue to incur costs to provide these measures well into fiscal 2021.
The COVID-19 pandemic continues to impact our business, operations andoperating results, of operations, including our net sales, earnings and cash flows will be materiallyand financial conditions. Factors impacted forby the foreseeable future, as a result of:COVID_19 pandemic include, but are not limited to, the following, many of which are not within our control:
•temporary closure of our stores to customer traffic;
•decreased customer traffic in stores;the geographies impacted by the virus;
•changes in consumer confidence and consumer spending habits, including spending for the merchandise that we sell and sell;
•negative trends in consumer purchasing patterns due to changes in consumers' disposable income, credit availability and debt levels;
•the availability of additional economic stimulus programs introduced by the various governments where we operate;
•disruption to our supply chain including the manufacturing, supply, distribution, transportation and delivery of our products;
•delays in the release of key video game titles; and
•a slowdown in the U.S. and global economies, and an uncertain global economic outlook or potential credit crisis.
We are actively managing the business to improve cash flows and liquidity, which we believe will help us emerge from this environment a more resilient company. These steps include the following:
•A temporary base salary reduction for executive leadership team ranging from 30%-50%;
•The Board of Directors has temporarily reduced cash compensation to directors by 50%;
•Effective April 26, 2020, we have also reduced pay for certain other employees by graduated amounts across mosttiming of the worldwide permanent workforce between 10% and 30%;
•Reduced inventory receipts to match demand with a focus on key hardware, software and accessories products; and
•Lowered capital spending to focus on mandatory maintenance or near-term high value strategic projects.post-pandemic economic recovery.
See Note 2, "COVID-19 Impacts" for further details.
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Industry Overview
Growth in the video gamegaming industry is generally driven by the introduction of new technology. Gaming consoles have historically launched in five to seven-year cycles as technological developments provide significant improvements in the gaming experience and add other entertainment capabilities. Consumer demand for gaming consoles areis typically the highest in the early years of the cycle and the weakest in the latter years. The current generation of consoles includeincludes the Sony PlayStation 45 (launched in 2013)November 2020), Microsoft Xbox OneSeries X (launched in 2013)November 2020) and the Nintendo Switch (launched in March 2017). The Sony PlayStation 4 and Microsoft XBox One are nearing the end of their cycle as Sony and Microsoft have announced their next generation consoles are expected to launch during the holiday period of 2020.
The sale of video games delivered through digital channels and other forms of gaming continue to grow and takerepresent an increasing percentage of physical video game sales. 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 our e-commerce in-store and websitestore functionality to enable our customers to access digital content to 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.industry.

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In our discussion of the results of operations, we refer toWe have historically reported comparable store sales which is a measure commonly used in the retail industry and indicates store performance by measuring the growth or decline in sales for certain stores for a particular period over the corresponding prior year's comparable period.
The methodology of calculating comparable store sales varies across the retail industry and our methodology may not be the same as other retailers' methodology. Our comparable store sales are comprised of sales from our video game 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. Our comparable store sales methodology excludes from the comparable store base stores that were closed for 14 consecutive days or more and where curbside delivery was not available to customers for such stores. Comparable store sales for our international operating segments exclude the effect of changes in foreign exchange rates.
Historically, stores with an active lease designation were included in our comparable stores sales asAs a result of the extensive temporary closures due to remodels and relocations were typically resolved within fewer than 14 days. Beginning in the first quarter of our fiscal year 2020, we refined the definition of comparable store sales to exclude stores that were closed for 14 consecutive days or more. Therefore, comparable sales results for the first quarter of our fiscal year 2020 exclude stores that were closed for 14 consecutive days or moreclosures due to the COVID-19 pandemic, where curbside delivery waswe believe comparable store sales are not availablea meaningful metric for the 13 weeks ended May 1, 2021 and we have not included comparable store sales in the discussion of our Consolidated Results of Operations below. We have included a discussion of net sales in our Consolidated Results of Operations as we believe net sales is the more appropriate metric to evaluate the customer. These criteria areperformance of our business at this time. This metric is consistent with the metric used by management for internal reporting and analysis to measure performance of our stores. Comparable store sales reported in prior periods are not materially affected by this revision.
The calculationAs we continue to reposition during fiscal 2021, we will continue to evaluate the metrics that we believe will most effectively inform investors of comparable store sales compares the 13 weeks ended May 2, 2020 to the most closely comparable weeks for the prior year period. The method of calculating comparable store sales varies across the retail industry. As a result, our method of calculating comparable store sales may not be the same as other retailers’ methods. We believe our calculation of comparable store sales best represents our strategy as an omnichannel retailer that provides its consumers several ways to access its products.performance, development and outlook.
BUSINESS STRATEGY
In May of 2019, we announced our multi-year transformation initiative, which we refer to as GameStop Reboot to position GameStop on the correct strategic path and fully leverage our unique position and brand in the video game industry. Our strategic plan is anchored on the following four tenets. tenets and designed to first stabilize and optimize our core business while at the same time, pursuing strategic initiatives to transform GameStop for the future by expanding our addressable market and product offerings to drive growth in the gaming and entertainment industries.
Stabilize and Optimize the core business. ImproveWe are improving the efficiency and effectiveness of operations across theour organization, including cost restructuring, inventory management optimization, adding and growing high margin product categories, and rationalizing theour global store base. Prioritizing efforts to optimize our store base and improve the fundamental operations of our business yielded the net closure of 693 stores in fiscal 2020 and an additional 118 stores in first quarter fiscal 2021, and included both the divestiture of the Simply Mac business and wind down of underperforming operations in Denmark, Finland, Norway and Sweden. Improved inventory management drove a significant increase in inventory turns and as a result, in working capital, while an intense focus on organization structure and expense reductions yielded a $16.2 million or 4.2% reduction in reported selling, general and administrative expenses in the first quarter of fiscal 2021 as compared to the first fiscal quarter of 2020. We continue to explore strategic options for our European businesses, which may include further store closings, exiting unprofitable businesses, or investing in e-commerce capabilities.
Transform GameStop into a customer-obsessed technology company to delight gamers. We are taking the following steps in fiscal 2021:
•Investing in technology capabilities, by in-sourcing talent, revamping systems, and evaluating next-generation assets;
Become the social / cultural hub for gaming.•Create the social and cultural hub of gaming across the GameStop platform and offerings.Building a superior customer experience, including beginning to establish a U.S.-based customer care operation;
Build a frictionless digital ecosystem.• DevelopExpanding product catalog and deploy a frictionless consumer facing digital omni-channel environment,addressable market including the recent relaunch of GameStop.com, to reach customers more broadly across all channels and provide them the full spectrum of content and access to products they desire, anytime, anywhere.certain emerging categories that represent natural extensions;
Transform vendor partnerships.• TransformModernizing U.S. fulfillment operations to improve speed of delivery and service;
We believe these transformation efforts represent an important aspect of our vendor and partner relationshipscontinued business to unlock additional high-margin revenue streams and optimize the lifetimeenable long-term value of every customer.creation for our stockholders.
Connected to our transformation efforts, we have incurred and expectmay continue to incur future costs including, but not limited to, consulting fees, severance, and store closure costs.costs and expenses for consultants and advisors. See "Consolidated Results from Operations—Selling, General and Administrative Expenses" for further information.
We remain committed to a capital allocation strategy focused on optimizing long-term value creation. With this approach, we will return capital to shareholders when the time is right and balance that opportunity against the need to maintain a strong balance sheet and to invest in responsible growth that will drive innovation for the business.
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CONSOLIDATED RESULTS OF OPERATIONS
The following table sets forth certain statement of operations items (in millions) and as a percentage of net sales, for the periods indicated:
13 Weeks Ended13 Weeks Ended
May 2, 2020May 4, 2019May 1, 2021May 2, 2020
AmountPercent of Net SalesAmountPercent of Net SalesAmountPercent of Net SalesAmountPercent of Net Sales
Net salesNet sales$1,021.0  100.0 %$1,547.7  100.0 %Net sales$1,276.8 100.0 %$1,021.0 100.0 %
Cost of salesCost of sales738.6  72.3  1,076.5  69.6  Cost of sales946.7 74.1 738.6 72.3 
Gross profitGross profit282.4  27.7  471.2  30.4  Gross profit330.1 25.9 282.4 27.7 
Selling, general and administrative expensesSelling, general and administrative expenses386.5  37.9  453.7  29.3  Selling, general and administrative expenses370.3 29.1 386.5 37.9 
Asset impairmentsAsset impairments0.6 — 3.9 0.4 
Asset impairments3.9  0.4  —  —  
Operating (loss) earnings(108.0) (10.6) 17.5  1.1  
Operating lossOperating loss(40.8)(3.2)(108.0)(10.6)
Interest expense, netInterest expense, net6.7  0.6  7.7  0.5  Interest expense, net24.7 1.9 6.7 0.6 
(Loss) income from continuing operations before income taxes(114.7) (11.2) 9.8  0.6  
Loss from continuing operations before income taxesLoss from continuing operations before income taxes(65.5)(5.1)(114.7)(11.2)
Income tax expenseIncome tax expense50.4  5.0  2.3  0.1  Income tax expense1.3 0.1 50.4 5.0 
Net (loss) income from continuing operations(165.1) (16.2) 7.5  0.5  
Net loss from continuing operationsNet loss from continuing operations(66.8)(5.2)(165.1)(16.2)
Loss from discontinued operations, net of taxLoss from discontinued operations, net of tax(0.6) —  (0.7) (0.1) Loss from discontinued operations, net of tax— — (0.6)— 
Net (loss) income$(165.7) (16.2)%$6.8  0.4 %
Net lossNet loss$(66.8)(5.2)%$(165.7)(16.2)%
We revisedThe 13 Week Period Ended May 1, 2021 Compared to the categories of our similar products at the end of fiscal 2019. See Note 3, "Revenue," for further details. 13 Week Period Ended May 2, 2020
Net Sales
The following table sets forth net sales by significant product category for the period indicated (dollars in millions):
 13 Weeks Ended
 May 1, 2021May 2, 2020
Net
Sales		Percent of Net SalesNet
Sales		Percent of Net Sales
Hardware and accessories$703.5 55.1 %$513.1 50.3 %
Software397.9 31.2 417.0 40.8 
Collectibles175.4 13.7 90.9 8.9 
Total$1,276.8 100.0 %$1,021.0 100.0 %
 13 Weeks Ended
 May 2, 2020May 4, 2019
Net
Sales		Percent of Net SalesNet
Sales		Percent of Net Sales
Hardware and accessories$513.1  50.3 %$656.5  42.4 %
Software417.0  40.8  733.1  47.4  
Collectibles90.9  8.9  158.1  10.2  
Total$1,021.0  100.0 %$1,547.7  100.0 %
Net sales by reportable segment in U.S. dollars were as follows (in millions):
13 Weeks Ended
May 1, 2021May 2, 2020
Net
Sales		Percent of Net SalesNet
Sales		Percent of Net Sales
United States$966.3 75.7 %$760.6 74.5 %
Canada61.94.8 39.7 3.9 
Australia114.89.0 113.7 11.1 
Europe133.810.5 107.0 10.5 
Total$1,276.8 100.0 %$1,021.0 100.0 %
13 Weeks Ended
May 2, 2020May 4, 2019
Net
Sales		Percent of Net SalesComparable Store SalesNet
Sales		Percent of Net SalesComparable Store Sales
United States$760.6  74.5 %(23.0)%$1,143.2  73.9 %(10.2)%
Canada39.73.9  (2.7) 72.6  4.7  (6.4) 
Australia113.711.1  34.3  101.6  6.5  (8.2) 
Europe107.010.5  (7.4) 230.3  14.9  (12.6) 
Total$1,021.0  100.0 %(17.2)%$1,547.7  100.0 %(10.3)%

For the first three months of fiscal 2021, net sales increased $255.8 million or 25.1% compared to the same prior year period. Net sales in our United States, Canada, Australia and Europe segments increased by 27.0%, 55.9%, 1.0% and 25.0%, respectively, when compared to the same period last year. The increase in net sales for the quarter was primarily attributable to sales volume from the launch of the new video game consoles from Sony and Microsoft and continued strong sales of the Nintendo gaming product lines coupled with the increase in store traffic compared to the same period last year as a result of the abrupt temporary store closures we experienced beginning in March of 2020 due to the COVID-19 pandemic. The increases in the hardware and accessory category and the collectibles category were partially offset by a decline in the software category as
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Net Sales
Net sales decreased $526.7 million, or 34.0%, during the 13 weeks ended May 2, 2020 compared to the 13 weeks ended May 4, 2019. Comparable store sales decreased 17.2% compared to the prior year period excluding stores that were closed for 14 days or more as a result of lower pre-owned inventory supply caused by the COVID-19 pandemic. Including the effect of the COVID-19 pandemic related closures, comparable store sales decreased 30.4%. from the prior year period. The decrease in net sales was primarily attributable to the combined impacts of temporary store closures to customer traffic inthroughout the United States, Canada and Europe due to the COVID-19 pandemic and the cyclicality of new hardware consoles, which are expected to launch in the fourth quarter of 2020. These declines were partially offset by the performance in our Australia segment which experienced an 11.9% increase in sales as stores in Australia remained open. Stores in New Zealand were impacted by temporary store closures. We believe the pandemic has increased demand for at home entertainment and connectivity products as consumers are spending more time in their homes and seek entertainment options.
Net sales during the 13 weeks ended May 2, 2020 in our United States, Canada and Europe segments declined by 33.5%, 45.3% and 53.5%, respectively, while net sales in our Australia segment increased 11.9%, when compared to the 13 weeks ended May 4, 2019. Comparable store sales in the United States, Canada and Europe decreased by 23.0%, 2.7% and 7.4%, respectively, while comparable store sales increased in the Australia segment by 34.3%, primarily due to the same factors described above. In addition, the increase in sales in the Australia segment was offset by the negative impact by foreign exchange rate fluctuations of $14.6 million.past year limiting in-store trade opportunities.
Gross Profit
Gross profit decreased $188.8 million, or 40.1%,increased 16.9% for the 13 weeks ended May 2, 2020first fiscal quarter of 2021 when compared to the 13 weeks ended May 4, 2019,same period last year primarily due to the decreaseincrease in sales. Gross profit as a percentage of net sales decreased to 27.7%25.9% in the current year fiscal quarter compared to 30.4%27.7% in the prior year fiscal quarter, primarily due primarily to a shift in product mix ininto lower margin categories such as new console hardware products, which carry a lower profit margin.given the launch of the generation 9 consoles and increased freight and credit card fees associated with the shift to e-commerce sales.
Selling, General and Administrative Expenses
Selling, general and administrative expenses ("SG&A&A") decreased by $67.2$16.2 million or 14.8%, to $386.5 million4.2% for the 13 weeks endedfirst fiscal quarter of 2021, compared to the same prior year period. We continue to benefit from lower store payroll and occupancy costs driven by our extensive cost reduction initiatives. These net reductions include 630 permanent store closures since May 2, 2020 compared toas we de-densify our store base. The declines in our store SG&A expense are partially offset by a $13.2 million increase in costs associated with our accelerated transformation, which consist of severance and divestiture, consulting fees with third parties supporting the 13 weeks ended May 4, 2019. The decrease in SG&A was primarily due to cost savings achieved as a resultexecution of our GameStop Reboot planstrategy, and administrative expenses incurred while completing significant debt and equity transactions. We expect to continue to incur these costs as well as reductions in payroll and other variable overhead expenses due to temporary store closures as a result of the COVID-19 pandemic. See Note 2, "COVID-19 Impacts" for further details.we progress through our accelerated transformation.
Asset Impairments
During the 13 weeks ended May 2,first fiscal quarter of 2021, we recognized a $0.6 million asset impairment on a right-of-use lease asset.During the first fiscal quarter of 2020, we recognized asset impairment charges totaling $3.9 million, consisting of a $2.7 million impairment of our corporate aircraft, which was classified as held for sale during the period,as of May 2, 2020, and $1.2 million in impairment charges associated withrelated to store-level assets. During the same period in the prior year, we did not record any asset impairments.property and equipment.
Interest Expense, Net
InterestDuring the first fiscal quarter of 2021, interest expense, net decreasedincreased by $1.0$18.0 million or 13.0%, for the 13 weeks ended May 2, 2020 compared to the 13 weeks ended May 4, 2019,same fiscal period in 2020, primarily due to the $17.8 million make-whole premium paid upon the voluntary early redemption of our $350.0 million 2019the outstanding balance of the 2023 Senior Notes on April 4, 2019 and the repurchase of $53.5 million aggregate principal amount of our 2021 Senior Notes that occurred after the prior year period.Notes.
Income Tax Expense
We recognized income tax expense of $1.3 million for the first fiscal quarter compared to an income tax expense of $50.4 million for the same fiscal period in 2020. Our effective income tax rate increased to (2.0%) for the 13 weeks ended May 1, 2021 compared to (43.9%) for the 13 weeks ended May 2, 2020, compared to income tax expense of $2.3 million for the 13 weeks ended May 4, 2019. Our effective income tax rate was (43.9)% for the 13 weeks ended May 2, 2020 which decreased from 23.5% for the 13 weeks ended May 4, 2019.2020. The decreaseincrease in the effective income tax rate compared to the prior year quarter was primarily driven by the significant drop in pre-tax book income, the establishment of a full valuation allowance of $53.0 millionthat we recorded in fiscal 2020 on U.S.our deferred tax assets impactsas a result of the CARES Act and the relative mixour determination that realization of earnings across the jurisdictions within which we operate.existing deferred tax assets is not more likely than not to benefit from our losses. See Note 10, "Income Taxes"Taxes," for further details.information.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Our principal sources of liquidity are cash from operations, cash on hand and our revolving credit facilities. As of May 2, 2020,1, 2021, we had total unrestricted cash on hand of $570.3 million. We have availability$694.7 million and an additional $99.9 million of available borrowing capacity under our revolving credit facility that provides us additional liquidity throughoutfacilities. On March 15, 2021, we repaid our outstanding borrowings of $25.0 million under the courseRevolver.
During the first fiscal quarter of 2021, we sold 3,500,000 shares of common stock under our "at-the-market" equity offering program (the "ATM Offering"). We generated $556.7 million in gross proceeds from the yearATM Offering and paid fees to fund our operations. Basedthe sales agent of $5.0 million. Additionally, we incurred $0.2 million in other administrative fees in connection with the ATM Offering during the 13 weeks ended May 1, 2021 which is included in selling, general and administration expenses on our current operating plans, we believe that available cash balances, cashthe consolidated statement of operation. We have used, and intend to continue to use, the $551.7 million in net proceeds generated from our operating activitiesthe ATM Offering for working capital and funds available under such revolving credit facility together will provide sufficient liquidity to fundgeneral corporate purposes, including repayment of indebtedness, funding our operations, transformation initiatives and support corporateproduct category expansion efforts, capital allocation programs, including any share or debt repurchases that we may undertake, for the next 12 monthsexpenditures and the foreseeable future. While COVID-19 related impacts have negatively impactedsatisfaction of our results fortax withholding obligations upon the vesting of shares of restricted stock held by our executive officers and other employees.
Additionally, during the first fiscal quarter ended May 2, 2020 and likely will impact our second quarter ending August 1, 2020,of 2021, we continue to achieverepaid the cash flow benefitsremaining $73.2 million aggregate principal amount of our initiatives
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which include both cost savings and expense reductions, as well as disciplined working capital management which supports an improved liquidity position.our then outstanding 2023 Senior Notes. See Note 6, "Debt," for further details on the debt transactions.
On an ongoing basis, we evaluate and consider certain strategic operating alternatives, including divestitures, restructuring or dissolution of unprofitable business segments, repurchasing shares of our common stock or our outstanding debt obligations, as well as other transactionsequity and debt financing alternatives that we believe may enhance stockholder value. Specific to our 2021 Senior Notes, in June 2020 we initiated an exchange offer to partially refinance these obligations. See Note 11, "Subsequent Events," for details on the exchange offer. The nature, amount nature and timing of any strategic operational changes,change, or purchases of our debt or equity securitiesfinancing transactions that we might pursue will depend on a variety of factors, including, as of the applicable time, our available cash and liquidity operating performance and other circumstances;operating
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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.
As parta result of the impact of the COVID-19 pandemic around the world, many of our previously announced GameStop Reboot profit improvement initiative,vendors have been impacted by the volatility in the supply chain financing market. As we are evaluating future strategicseek to optimize our inventories, including for next generation video game consoles and operating alternativesa number of new software releases, and related payment terms, we have increased the amount of credit support collateral we provide to select vendors for certainour inventory purchase obligations. Our continued provision of collateral, and the levels of such collateral, will depend on a variety of factors, including our unprofitable operating subsidiariesinventory purchase levels, available payment terms for inventories, availability of borrowing capacity under our credit facilities, favorable credit terms and business units that operate within our international segments. In total, we currently believe that any potential charges associated with the disposition or wind-downcosts of certain operations under consideration, primarily relating to lease and severance obligations and accelerated depreciation and amortization, would not be material to our liquidity, results of operations or financial condition.providing collateral. See Note 1, "General Information — Restricted Cash" for further details.
Cash Flows
During the 13 weeks ended May 2, 2020,1, 2021, cash used in operations wasflows from operating activities were an outflow of $18.8 million, compared with an outflow of $49.3 million compared toduring the same period last year. Our net loss for the fiscal quarter included charges and credits that did not impact operating cash usedflow, including depreciation and amortization, loss on extinguishment of debt and stock-based compensation partially offset by cash from operations. Overall, our cash from operations benefited from continued improvements in operationsworking capital as a result of $665.0optimizing inventory and accounts payable levels through optimizing the cash conversion cycle and more efficient carrying levels of inventory.
Cash flows from investing activities were an outflow of $14.7 million during the 13 weeks ended May 4, 2019.1, 2021 compared to an outflow of $6.1 million during the same period last year. The decrease in cash used in operations of $615.7 million wasprovided by investing activities is primarily attributable to the optimization of inventory and accounts payable levels as we have focused our operational process to optimize the cash conversion cycle and carry more efficient levels of inventory.higher capital expenditures in current year.
Cash used in investingflows from financing activities decreased to $6.1were an inflow of $169.3 million during the 13 weeks ended May 2, 2020, from $18.7 million during the 13 weeks ended May 4, 2019. The $12.6 million decrease in cash used in investing activities is primarily attributable1, 2021 compared to lower capital expenditures during the 13 weeks ended May 2, 2020.
Cash provided by financing activities wasan inflow of $131.9 million during the 13 weeks ended May 2, 2020, compared2020. During the first quarter of fiscal 2021, we received $551.7 million in aggregate proceeds from the sale of shares of common stock in the ATM Offering (net of approximately $5.0 million of commissions). We completed the voluntary early redemption of our then outstanding 2023 Senior Notes for an aggregate of $234.2 million (inclusive of a $17.8 million make-whole premium). We also repaid $73.2 million to retire at maturity our then outstanding 2021 Senior Notes. We repaid $25.0 million of our outstanding borrowing under the Revolver. The cash used in financing activities of $394.0 millioninflow during the 13 weeks ended May 4, 2019. The increase in cash provided is2, 2020 was primarily due to a net $135.0 million draw down on our revolving line of credit during the current year period compared to the redemption of our $350 million in aggregate principal of 5.5% unsecured senior notes and a $40.3 million dividend payment in the prior year period.credit.
Sources of LiquidityLiquidity; Uses of Capital
We utilize cash generated from operations and have funds available to us under our revolving credit facilitythe Revolver to cover seasonal fluctuations in cash flows and to support our various initiatives. Our cash and cash equivalents are carried at cost and consist primarily of time deposits with commercial banks.
We maintain an asset-based revolving credit facility (the "Revolver")the Revolver with a borrowing base capacity of $420 million and a maturity date of November 2022. The Revolver hasalso includes a $200 million expansion feature and $50$100 million letter of credit sublimit, and allows for an incremental $50 million first-in, last-out facility. The applicable margins for prime rate loans range from 0.25% to 0.50% and, for London Interbank Offered ("LIBO") rate loans, range from 1.25% to 1.50%. The Revolver is secured by substantially allAs of the assets of GameStop Corp. and the assets of its domestic subsidiaries. We are required to pay a commitment fee of 0.25% for any unused portionend of the first quarter of 2021, based on our borrowing base and amounts reserved for outstanding letters of credit, total commitmentavailability under the Revolver. AsRevolver after giving effect to the Availability Reduction was $99.9 million, and as of May 2, 2020, our applicable margins1, 2021, no amounts were 0.25% for prime rate loansoutstanding under the Revolver and 1.25% for LIBO rate loans. As of May 2, 2020 we had $135.0$44.0 million of outstanding borrowings and $7.3 million of outstanding standby letters of credit were outstanding under the Revolver.
Separately from the 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 May 1, 2021, we had $38.2 million of outstanding letters of credit and other bank guarantees under facilities outside of the Revolver.
See Note 6, "Debt," for additional information.
We may also fund our Revolver. Subsequent to the 13 weeks ended May 2, 2020 we repaid an additional $35.0 million under our revolving credit facility, bringing our outstanding borrowings down to $100.0 millionoperating expenses and growth capital needs, as circumstances warrant, from sales of June 3, 2020.
In March 2016, we issued $475.0 million aggregate principalequity securities. The timing and amount of unsecured 6.75% senior notes due March 15,any sales of equity securities would depend on, among other factors, our capital needs and alternative sources and costs of capital available to us, market perceptions about us, and the then current trading price of our common equity. As discussed above, during the first quarter of fiscal 2021, (the "2021 Senior Notes"). Interest is payable semi-annuallywe sold 3,500,000 shares of common stock in arrears on March 15the ATM Offering. We have used, and September 15 of each year. Theintend to continue to use, the $551.7 million in net proceeds that we generate from the offering were usedATM Offering for working capital and general corporate purposes, including acquisitionsfunding our transformation initiatives and dividends.
The agreement governing our Revolverproduct category expansion efforts, repayment of indebtedness, capital expenditures and the indenture governingsatisfaction of our 2021 Senior Notes place certain restrictionstax withholding obligations upon the vesting of shares of restricted stock held by our executive officers and other employees.
Tax withholding obligations arise upon the vesting of shares of restricted stock and these obligations must be satisfied at the time they arise through cash payments to the applicable taxing authorities. The amount of the tax withholding obligations due upon the vesting of shares of restricted stock is dependent on us andthe price of our subsidiaries, including, among others, limitationsshares of common stock on asset sales, additional liens, investments, incurrence of additional debt and share repurchases. In addition, the indentures governingNew York Stock Exchange on the applicable vesting date. As discussed within Part I, Item 1A, "Risk Factors" in our Revolver and 2021 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 2021 Senior Notes and our Revolver.
See Note 6, “Debt,” to our unaudited consolidated financial statements for additional information related to our Revolver and 2021 Senior Notes.Annual Report on Form 10-K,
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we may elect to satisfy these tax withholding obligations by withholding and canceling a portion of the shares subject to vesting (sometimes referred to as "share withholding") and remitting cash to the tax authorities at the applicable statutory rates on behalf of the holder(s) of the applicable award. Depending on the price of our common stock on the vesting date, the amount of these cash payments due for taxes in respect of restricted shares that are scheduled to vest or that may be accelerated in connection with certain events (such as cessation of a grantee's employment) in the second quarter of fiscal 2021 could be substantial and could have a negative impact on our liquidity and ability to use funds for operational purposes. Our Luxembourg subsidiary maintainscommon stock price has recently experienced extreme price fluctuations. For illustrative purposes, assuming a $20.0stock price of $249.02 per share (the price of our shares of common stock on the New York Stock Exchange on June 1, 2021), we estimate that the aggregate amount of our tax withholding obligations on account of second quarter vesting events will be at least $74.6 million Uncommitted Lineand could be up to $157.2 million depending on whether we arrange for share withholding in respect of Credit (the “Linevesting events anticipated to occur later in the quarter. The actual amount of Credit”) with Bankthe tax obligations and the number of America. There is no term associated withshares to be canceled (or sold in the Lineopen market in the event the applicable employee were to arrange for broker-assisted sell-to-cover transactions in lieu of Creditshare withholding for shares that vest after June 9, 2021) could be higher or lower, depending on the price of our common stock upon vesting, the applicable tax withholding rates then in effect, the price at which any broker-assisted sell-to-cover transactions (if any) were to occur and Bankthe number (if any) of America may withdraw the facility at any time without notice. The Line of Credit is availablerestricted stock awards that are forfeited prior 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 May 2, 2020, there were no cash overdrafts outstanding under the Line of Credit and bank guarantees outstanding totaled $1.1 million.vesting.
CRITICAL ACCOUNTING POLICIES
Our unaudited 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 disclosures required under GAAP for complete 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 financial statements. For a summary of significant accounting policies and the means by which we develop estimates thereon, see “Part II—Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20192020 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies from those included in our 20192020 Annual Report on Form 10-K.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
See Note 1 to our unaudited 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.
OFF-BALANCE SHEET ARRANGEMENTS
We had no material off-balance sheet arrangements as of May 2, 2020.1, 2021 other than those disclosed in Note 6, "Debt" of our unaudited consolidated financial statements.
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ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in our quantitative disclosures about market risk factors as set forth in Item 1A. Risk Factors in our 20192020 Annual Report on Form 10-K, except as described below.
The impact of the COVID-19 pandemic both in the United States and globally continues to cause uncertainty and volatility in financial markets, including interest rates and foreign currency exchange rates. The outbreak is expected to have a continued adverse impact on market conditions for the foreseeable future and to trigger a period of global economic slowdown with no known duration. See further discussion in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Part II, Item 1A “Risk Factors” of this Report on Form 10-Q.10-K.
ITEM 4.    CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act has been appropriately recorded, processed, summarized and reported on a timely basis and are effective in ensuring that such information is accumulated and communicated to management, including our principal executive officer and principal financial officer, 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 and, based on that evaluation, determined that our disclosure controls and procedures were effective as of May 2, 20201, 2021 at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
In response to the COVID-19 pandemic, we have required certain employees, some of whom are involvedThere has not been any change in the operation of our internal controls over financial reporting, to work from home. Despite this change, there have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during theour first fiscal quarter ended May 2, 2020 that havehas materially affected, or areis reasonably likely to materially affect, the Company’sour internal control over financial reporting. We are continually monitoring and assessing the impact of COVID-19 on our internal controls to minimize any impact it may have on their design and operating effectiveness.
PART II — OTHER INFORMATION
ITEM 1.    LEGAL PROCEEDINGS
InThe matters under the ordinary coursecaption "Legal Proceedings" in Note 7 of our business, wethe Notes to Consolidated Financial Statements included 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.    RISK FACTORS
In light of recent developments relatingOur operations and financial results are subject to the COVID-19 pandemic, the Company amendedvarious risks and restated all risk factors that were includeduncertainties, including those described in item "1A. RiskPart I, Item 1A, "Risk Factors" of its 2019in our Annual Report on Form 10-K filed withfor the Securitiesyear ended January 30, 2021, which could adversely affect our business, financial condition, results of operations, cash flows, and Exchange Commission ("SEC") on March 27, 2020. A copythe trading price of the amendedour common and restatedcapital stock. There have been no material changes to our risk factors was provided in Exhibit 99.4since our 2020 Annual Report on Form 10-K.
ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
Reference is made to the Current Report on Form 8-K the Companythat we filed with the SEC on the date of this Form 10-Q that disclosed that on June 5, 20209, 2021, we announced the appointment of Matthew Furlong, age 42, as our President and Chief Executive Officer, effective on or about June 21, 2021. Prior to joining us, Mr. Furlong served as Country Leader, Australia for Amazon.com, Inc. (“Amazon”) since September 2019 and in various other roles at Amazon since October 2012, including as Director, Technical Advisor, Amazon North America. Prior to joining Amazon, Mr. Furlong served in various roles at The Procter & Gamble Company focused on brand, marketing and sales strategies. In the same Current Report on Form 8-K, we also announced the appointment of Mike Recupero, age 47, as our Chief Financial Officer, effective on or about July 12, 2021. Prior to joining us, Mr. Recupero served as Chief Financial Officer of the North American Consumer business of Amazon since January 2021 after serving as Chief Financial Officer of the Prime Video business of Amazon since April 2019 and previously serving as Chief Financial Officer of the European Consumer business of Amazon since October 2016. Prior to these roles, Mr. Recupero served in various other roles at Amazon focused on finance since joining Amazon in April 2004.
On May 26, 2021, we received a request from the Staff of the SEC for the voluntary production of documents and information concerning a SEC investigation into the trading activity in our securities and the securities of other companies. We are in the process of reviewing the request and producing the requested documents and intend to cooperate fully with the SEC Staff regarding this matter. This inquiry is incorporated herein by reference.

not expected to adversely impact us.
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ITEM 6.    EXHIBITS
Exhibit
Number		DescriptionPreviously Filed as an Exhibit to and Incorporated by Reference FromDate Filed
10.1*
Transition and Separation Agreement, dated March 21, 2021, between GameStop Corp. and James A. Bell.
Current Report on Form 8-KFebruary 23, 2021
10.2*
Transition and Separation Agreement, dated March 21, 2021, between GameStop Corp. and Frank M. Hamlin.
Current Report on Form 8-KMarch 23.2021
10.3*
Letter Agreement between Jenna Owens and GameStop Corp. dated March 23, 2021
Current Report on Form 8-KMarch 23.2021
10.4*

Current Report on Form 8-KApril 19, 2021
10.5*Current Report on Form 8-KApril 30, 2021
31.1
Certification of Chief 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.
Filed herewith.
31.2
Certification of Chief 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.
Filed herewith.
32.1
Certification of Chief 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.
Furnished herewith.
32.2
Certification of Chief 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.
Furnished herewith.
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are imbeddedembedded within the inline XBRL document.Submitted electronically herewith.
101.SCHInline XBRL Taxonomy Extension SchemaSubmitted electronically herewith.
101.CALInline XBRL Taxonomy Extension Calculation LinkbaseSubmitted electronically herewith.
101.DEFInline XBRL Taxonomy Extension Definition LinkbaseSubmitted electronically herewith.
101.LABInline XBRL Taxonomy Extension Label LinkbaseSubmitted electronically herewith.
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).Submitted electronically herewith.
*This exhibit is a management or compensatory contract.


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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/ JAMES A. BELLDiana Saadeh-Jajeh
 James A. BellName: Diana Saadeh-Jajeh
 ExecutiveTitle: Senior Vice President and Interim Chief Financial Officer
 (Principal Financial Officer and Principal Accounting Officer)
Date: June 9, 20202021 

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