Cover Page
Cover Page - shares | 6 Months Ended | |
Aug. 01, 2020 | Sep. 02, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 1, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-32637 | |
Entity Registrant Name | GameStop Corp. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-2733559 | |
Entity Address, Address Line One | 625 Westport Parkway | |
Entity Address, City or Town | Grapevine, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76051 | |
City Area Code | (817) | |
Local Phone Number | 424-2000 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | GME | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 65,161,610 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001326380 | |
Current Fiscal Year End Date | --01-30 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Current assets: | |||
Cash and cash equivalents | $ 735.1 | $ 499.4 | $ 424 |
Receivables, net | 83.1 | 141.9 | 122.4 |
Merchandise inventories, net | 474.6 | 859.7 | 948.9 |
Prepaid expenses and other current assets | 87.1 | 120.9 | 143.2 |
Assets held-for-sale | 0 | 11.8 | 29.1 |
Total current assets | 1,379.9 | 1,633.7 | 1,667.6 |
Property and equipment, net | 219.7 | 275.9 | 312 |
Operating lease right-of-use assets | 689 | 767 | 769.7 |
Deferred income taxes | 29.2 | 83 | 157.8 |
Other noncurrent assets | 57.4 | 60.1 | 80.8 |
Total assets | 2,375.2 | 2,819.7 | 2,987.9 |
Current liabilities: | |||
Accounts payable | 256.4 | 380.8 | 368.3 |
Accrued liabilities and other current liabilities | 580.7 | 617.5 | 593.7 |
Current portion of operating lease liabilities | 218.8 | 239.4 | 240.3 |
Short-term debt, including current portion of long-term debt, net | 221.3 | 0 | 0 |
Borrowings under revolving line of credit | 35 | 0 | 0 |
Liabilities held-for-sale | 0 | 0 | 14.5 |
Total current liabilities | 1,312.2 | 1,237.7 | 1,216.8 |
Long-term debt, net | 215.9 | 419.8 | 419.1 |
Operating lease liabilities | 475.5 | 529.3 | 523.9 |
Other long-term liabilities | 19.3 | 21.4 | 18.4 |
Total liabilities | 2,022.9 | 2,208.2 | 2,178.2 |
Commitments and contingencies (Note 7) | |||
Stockholders’ equity: | |||
Class A common stock — $.001 par value; 300 shares authorized; 65.2, 90.5 and 64.3 shares issued and outstanding | 0.1 | 0.1 | 0.1 |
Additional paid-in capital | 2.9 | 0 | 0 |
Accumulated other comprehensive loss | (63.9) | (78.8) | (75.1) |
Retained earnings | 413.2 | 690.2 | 884.7 |
Total stockholders’ equity | 352.3 | 611.5 | 809.7 |
Total liabilities and stockholders’ equity | $ 2,375.2 | $ 2,819.7 | $ 2,987.9 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Statement of Financial Position [Abstract] | |||
Class A common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Class A common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 |
Class A common stock, shares issued (in shares) | 65,200,000 | 64,300,000 | 90,500,000 |
Class A common stock, shares outstanding (in shares) | 65,200,000 | 64,300,000 | 90,500,000 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 942 | $ 1,285.7 | $ 1,963 | $ 2,833.4 |
Cost of sales | 689.8 | 886.6 | 1,428.4 | 1,963.1 |
Gross profit | 252.2 | 399.1 | 534.6 | 870.3 |
Selling, general and administrative expenses | 348.2 | 481.9 | 734.7 | 935.6 |
Goodwill and asset impairments | 0.9 | 363.9 | 4.8 | 363.9 |
Gain on sale of assets | (11.3) | 0 | (11.3) | 0 |
Operating loss | (85.6) | (446.7) | (193.6) | (429.2) |
Interest income | (0.4) | (2.6) | (1.3) | (7.9) |
Interest expense | 7.9 | 9.6 | 15.5 | 22.6 |
Loss from continuing operations before income taxes | (93.1) | (453.7) | (207.8) | (443.9) |
Income tax expense (benefit) | 17.9 | (40.1) | 68.3 | (37.8) |
Net loss from continuing operations | (111) | (413.6) | (276.1) | (406.1) |
Loss from discontinued operations, net of tax | (0.3) | (1.7) | (0.9) | (2.4) |
Net loss | $ (111.3) | $ (415.3) | $ (277) | $ (408.5) |
Basic loss per share: | ||||
Continuing operations (in dollars per share) | $ (1.71) | $ (4.14) | $ (4.26) | $ (4.01) |
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.02) |
Basic loss per share (in dollars per share) | (1.71) | (4.15) | (4.28) | (4.04) |
Diluted loss per share: | ||||
Continuing operations (in dollars per share) | (1.71) | (4.14) | (4.26) | (4.01) |
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.02) |
Diluted loss per share (in dollars per share) | $ (1.71) | $ (4.15) | $ (4.28) | $ (4.04) |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 65 | 100 | 64.7 | 101.2 |
Diluted (in shares) | 65 | 100 | 64.7 | 101.2 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (111.3) | $ (415.3) | $ (277) | $ (408.5) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 27 | (6.9) | 14.9 | (20.8) |
Total comprehensive loss | $ (84.3) | $ (422.2) | $ (262.1) | $ (429.3) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Millions, $ in Millions | Total | Class A Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Retained Earnings |
Beginning balance (in shares) at Feb. 02, 2019 | 102 | ||||
Beginning balance at Feb. 02, 2019 | $ 1,336.2 | $ 0.1 | $ 27.7 | $ (54.3) | $ 1,362.7 |
Net income (loss) | 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 awards (in shares) | 0.3 | ||||
Settlement of stock-based awards | (0.6) | (0.6) | |||
Ending balance (in shares) at May. 04, 2019 | 102.3 | ||||
Ending balance at May. 04, 2019 | 1,291.7 | $ 0.1 | 29 | (68.2) | 1,330.8 |
Beginning balance (in shares) at Feb. 02, 2019 | 102 | ||||
Beginning balance at Feb. 02, 2019 | 1,336.2 | $ 0.1 | 27.7 | (54.3) | 1,362.7 |
Net income (loss) | (408.5) | ||||
Foreign currency translation | (20.8) | ||||
Ending balance (in shares) at Aug. 03, 2019 | 90.5 | ||||
Ending balance at Aug. 03, 2019 | 809.7 | $ 0.1 | 0 | (75.1) | 884.7 |
Beginning balance (in shares) at May. 04, 2019 | 102.3 | ||||
Beginning balance at May. 04, 2019 | 1,291.7 | $ 0.1 | 29 | (68.2) | 1,330.8 |
Net income (loss) | (415.3) | (415.3) | |||
Foreign currency translation | (6.9) | (6.9) | |||
Stock-based compensation expense | $ 3.3 | 3.3 | |||
Repurchase of common shares (in shares) | (12) | ||||
Repurchase of common shares | $ (62.9) | (32.1) | (30.8) | ||
Settlement of stock-based awards (in shares) | 0.2 | ||||
Settlement of stock-based awards | (0.2) | (0.2) | |||
Ending balance (in shares) at Aug. 03, 2019 | 90.5 | ||||
Ending balance at Aug. 03, 2019 | 809.7 | $ 0.1 | 0 | (75.1) | 884.7 |
Beginning balance (in shares) at Feb. 01, 2020 | 64.3 | ||||
Beginning balance at Feb. 01, 2020 | 611.5 | $ 0.1 | 0 | (78.8) | 690.2 |
Net income (loss) | (165.7) | (165.7) | |||
Foreign currency translation | (12.1) | (12.1) | |||
Stock-based compensation expense | 1.8 | 1.8 | |||
Settlement of stock-based awards (in shares) | 0.3 | ||||
Settlement of stock-based awards | (0.5) | (0.5) | |||
Ending balance (in shares) at May. 02, 2020 | 64.6 | ||||
Ending balance at May. 02, 2020 | 435 | $ 0.1 | 1.3 | (90.9) | 524.5 |
Beginning balance (in shares) at Feb. 01, 2020 | 64.3 | ||||
Beginning balance at Feb. 01, 2020 | 611.5 | $ 0.1 | 0 | (78.8) | 690.2 |
Net income (loss) | (277) | ||||
Foreign currency translation | 14.9 | ||||
Ending balance (in shares) at Aug. 01, 2020 | 65.2 | ||||
Ending balance at Aug. 01, 2020 | 352.3 | $ 0.1 | 2.9 | (63.9) | 413.2 |
Beginning balance (in shares) at May. 02, 2020 | 64.6 | ||||
Beginning balance at May. 02, 2020 | 435 | $ 0.1 | 1.3 | (90.9) | 524.5 |
Net income (loss) | (111.3) | (111.3) | |||
Foreign currency translation | 27 | 27 | |||
Stock-based compensation expense | 2.1 | 2.1 | |||
Settlement of stock-based awards (in shares) | 0.6 | ||||
Settlement of stock-based awards | (0.5) | (0.5) | |||
Ending balance (in shares) at Aug. 01, 2020 | 65.2 | ||||
Ending balance at Aug. 01, 2020 | $ 352.3 | $ 0.1 | $ 2.9 | $ (63.9) | $ 413.2 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) | 3 Months Ended |
May 04, 2019$ / shares | |
Class A Common Stock | |
Dividends declared per common share (in dollars per share) | $ 0.38 |
UNAUDITED CONDENSED CONSOLIDA_7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (277) | $ (408.5) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization (including amounts in cost of sales) | 41.7 | 46.2 |
Goodwill and asset impairments | 4.8 | 363.9 |
Stock-based compensation expense | 3.9 | 5.2 |
Deferred income taxes | 45.4 | (11.8) |
(Gain) loss on disposal of property and equipment, net | (9.6) | 0.9 |
Other | (0.2) | 3.7 |
Changes in operating assets and liabilities: | ||
Receivables, net | 60.5 | 8.5 |
Merchandise inventories | 394.2 | 270.5 |
Prepaid expenses and other current assets | 1.7 | (7.4) |
Prepaid income taxes and income taxes payable | 69.8 | (76.5) |
Accounts payable and accrued liabilities | (193.7) | (839.4) |
Operating lease right-of-use assets and lease liabilities | 2.8 | (2.2) |
Changes in other long-term liabilities | (0.8) | 0.2 |
Net cash flows provided by (used in) operating activities | 143.5 | (646.7) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (17.5) | (41.2) |
Proceeds from Sale of Property, Plant, and Equipment | 51.8 | 0 |
Other | 1.7 | (1) |
Net cash flows provided by (used in) investing activities | 36 | (42.2) |
Cash flows from financing activities: | ||
Repurchase of common shares | 0 | (62.9) |
Proceeds from French term loans | 23.6 | 0 |
Dividends paid | (0.3) | (40.5) |
Borrowings from the revolver | 150 | 0 |
Repayments of revolver borrowings | (115) | 0 |
Repayments of senior notes | (5.3) | (404.5) |
Settlement of stock-based awards | (1) | (0.8) |
Net cash flows provided by (used in) financing activities | 52 | (508.7) |
Exchange rate effect on cash and cash equivalents and restricted cash | 13.6 | (5.1) |
Increase in cash held-for-sale | 0 | (0.1) |
Increase (decrease) in cash and cash equivalents and restricted cash | 245.1 | (1,202.8) |
Cash and cash equivalents and restricted cash at beginning of period | 513.5 | 1,640.5 |
Cash and cash equivalents and restricted cash at end of period | $ 758.6 | $ 437.7 |
General Information
General Information | 6 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
General Information | General Information The Company GameStop Corp. (“GameStop,” “we,” “us,” “our,” or the “Company”) is a global, multichannel video game, consumer electronics and collectibles retailer. GameStop operates over 5,100 stores across 10 countries. GameStop's consumer product network also includes www.gamestop.com and Game Informer ® magazine, the world's leading print and digital video game publication. GameStop operates its business in four 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 the Company's accounts and the accounts of its 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 the Company's 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 the Company's annual report on Form 10-K for the 52 weeks ended February 1, 2020, as filed with the Securities and Exchange Commission on March 27, 2020, (the “2019 Annual Report on Form 10-K”). The preparation of financial statements in conformity with GAAP requires the Company 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, the Company has made its best estimates and judgments of certain amounts included in the financial statements, and changes in the estimates and assumptions used by the Company could have a significant impact on its financial results. Actual results could differ from those estimates. Due to the seasonal nature of the Company's business, the results of operations for the 26 weeks ended August 1, 2020 are not indicative of the results to be expected for the 52 weeks ending January 30, 2021 ("fiscal 2020"). Reclassifications The Company has made certain classifications in its consolidated statements of cash flows in order to conform to the current year presentation. The provision for inventory reserves of $21.5 million for the 26 weeks ended August 3, 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 $11.7 million for the 26 weeks ended August 3, 2019 has also been reclassified from other to changes in accounts payable and accrued liabilities. In the Company's consolidated statements of operations, depreciation and amortization of $22.6 million and $45.7 million for the 13 and 26 weeks ended August 3, 2019, respectively, have been reclassified to selling, general and administrative expenses to conform to the current year presentation. Additionally, goodwill impairments of $363.9 million for both the 13 and 26 weeks ended August 3, 2019 have been reclassified to goodwill and asset impairments to conform to the current year presentation. Significant Accounting Policies There have been no material changes to the Company's significant accounting policies included in Note 1, "Nature of Operations and Summary of Significant Accounting Policies," within its 2019 Annual Report on Form 10-K. Restricted Cash Restricted cash of $23.5 million, $13.7 million and $14.1 million as of August 1, 2020, August 3, 2019 and February 1, 2020, respectively, consists primarily of bank deposits serving as collateral to support landlord and vendor obligations of the Company's foreign subsidiaries and is included in prepaid and other current assets and other noncurrent assets in its unaudited condensed consolidated balance sheets. The following table provides a reconciliation of cash and cash equivalents 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): August 1, August 3, February 1, Cash and cash equivalents $ 735.1 $ 424.0 $ 499.4 Restricted cash (included in prepaid expenses and other current assets) 11.0 0.4 0.3 Restricted cash (included in other noncurrent assets) 12.5 13.3 13.8 Total cash and cash equivalents and restricted cash in the statements of cash flows $ 758.6 $ 437.7 $ 513.5 Assets and Liabilities Held-for-Sale The Company's corporate aircraft was classified as assets held-for-sale as of February 1, 2020, which had an estimated fair value, less costs to sell, of $11.8 million. The Company recognized impairment charges of $0.5 million and $3.2 million during the 13 and 26 weeks ended August 1, 2020, respectively, which were partially attributable to recent economic impacts associated with the COVID-19 pandemic. On June 5, 2020, the Company completed the sale of its corporate aircraft with net cash proceeds totaling $8.6 million, net of costs to sell. No gain or loss on the sale of the aircraft was recognized. The assets and liabilities classified as held-for-sale as of August 3, 2019 related to the Company's previously owned Simply Mac business, which was sold to Cool Holdings, Inc. during the third fiscal quarter of 2019. The major classes of assets and liabilities held-for-sale were as follows (in millions): August 3, Assets: Cash and cash equivalents $ 0.1 Receivables, net 1.8 Merchandise inventories, net 15.4 Prepaid expenses and other current assets 0.6 Property and equipment, net 0.8 Operating lease right-of-use assets 9.0 Other assets 1.4 Total assets held-for-sale $ 29.1 Liabilities: Accounts payable $ 4.0 Accrued and other liabilities 1.1 Operating lease liabilities 9.4 Total liabilities held-for-sale $ 14.5 Property and Equipment, Net Accumulated depreciation related to the Company's property and equipment totaled $1,176.5 million, $1,255.3 million and $1,190.1 million as of August 1, 2020, August 3, 2019 and February 1, 2020, respectively. The Company periodically reviews its 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. The Company assesses recoverability based on several factors, including its intention with respect to its 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. Impairment losses were recorded totaling $0.3 million and $1.0 million during the 13 and 26 weeks ended August 1, 2020, respectively. No impairment losses were recorded during the 13 and 26 weeks ended August 3, 2019. Discontinued Operations During the fourth quarter of fiscal 2018, the Company divested of its 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 13 weeks ended August 1, 2020 and August 3, 2019 consisted of $0.4 million and $2.2 million in selling, general and administrative expenses, respectively and $0.1 million and $0.5 million in income tax benefit, respectively. The net loss from discontinued operations for the 26 weeks ended August 1, 2020 and August 3, 2019 consisted of $1.2 million and $3.0 million in selling, general and administrative expenses, respectively and $0.3 million and $0.6 million in income tax benefit, respectively. Adoption 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. The Company 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 the Company's consolidated financial statements. 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. The Company is currently evaluating the impact that ASU 2019-12 will have on its 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 the Company's 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 prospectively through December 31, 2022. The Company is currently evaluating the impact that ASU 2020-04 will have on its consolidated financial statements. |
COVID-19 Impacts
COVID-19 Impacts | 6 Months Ended |
Aug. 01, 2020 | |
Asset Impairment Charges [Abstract] | |
COVID-19 Impacts | COVID-19 Impacts The near-term macroeconomic conditions continue to be 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 the Company operates 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, the Company temporarily closed stores in Europe, Canada and New Zealand. In the United States, all storefronts were temporarily closed to customers, however, the Company continued to process orders by offering curbside pick-up, ship from store and e-commerce delivery options in many of its stores. These temporary store closures began in late March 2020 and by the end of fiscal June 2020, 98% of the Company's stores globally were open to the public following the implementation of the highest level of health and safety protocols recommended by the federal and local health and governmental authorities. GameStop's store locations in Australia remained opened to the public during the 26 weeks ended August 1, 2020 and were not negatively impacted during this period by the COVID-19 restrictions as the Company's other segments and New Zealand. Subsequent to the second quarter of fiscal 2020, approximately 15% of the Company's stores in Australia were temporarily closed due to an outbreak of COVID-19. The Company has followed the highest level of health and safety protocols recommended by the federal and local health and governmental authorities and the substantial majority of the Company's stores across the various geographies where it operates were re-opened to the public for the latter portion of the 13 weeks ended August 1, 2020. In addition, many of the Company's stores in the United States continued to offer curbside pick-up, ship from store and e-commerce delivery options during the second quarter of fiscal 2020 while they were open to the public. Impact on Operating Results and Asset Recoverability While the gaming industry has not been as severely impacted as certain other consumer businesses, store closures during the stay-at-home orders have adversely impacted the Company's results of operations during the 13 and 26 weeks ended August 1, 2020. As a result, the Company has taken proactive measures to align inventory purchases with demand, reduce discretionary spending and institute temporary pay reductions to partially offset the impact of store closures. During the 26 weeks ended August 1, 2020, the Company incurred $21.4 million to mitigate the impact of the COVID-19 pandemic including incremental wage payments to hourly associates to help offset lost wages due to store closures, enhanced cleaning measures and expanded use of personal protective equipment at its stores, shared service centers and distribution centers across all geographies where the Company operates. The aggregation of these events caused the Company to reassess potential impairments of 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, during the 13 and 26 weeks ended August 1, 2020 the Company recognized impairment charges of $0.4 million and $1.6 million, respectively. In addition, during the 13 and 26 weeks ended August 1, 2020, the Company recognized impairment charges of $0.5 million and $3.2 million, respectively, for its corporate aircraft, which were partially attributable to the current economic impacts associated with the COVID-19 pandemic. The corporate aircraft was sold during the second quarter of fiscal 2020 for $8.6 million, net of costs to sell. See Note 1, "General Information" for further details. During the first and second quarters of fiscal 2020 the Company continued to assess the likelihood of realizing the benefits of its deferred tax assets. The Company estimates its deferred tax assets using several factors, including the weight of available evidence, which takes into consideration cumulative book losses recognized and projections of future taxable income in certain jurisdictions. While the Company's view of the longer-term operating outlook has not been significantly impacted by COVID-19, its ability to recover these deferred tax assets depends on several factors, including the Company's short and long-term results of operations. As a result of this analysis, there remains a valuation allowance primarily associated with U.S. deferred tax assets of $53.0 million as of August 1, 2020. See Note 10, “Income Taxes" for further information. The Company also evaluated its 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 applicable payees, 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. The Company is required to record valuation adjustments to inventory to reflect potential obsolescence or over-valuation as a result of cost exceeding market. In valuing inventory, the Company considers quantities on hand, recent sales, potential price protections, returns to vendors and other factors. Given the nature of the Company's products and the temporary store closures between March and June 2020, the COVID-19 pandemic did not significantly impact its estimates of inventory valuation. Liquidity and Other Impacts As of August 1, 2020, the Company had total cash on hand of $735.1 million and an additional $28.4 million of available borrowing capacity under its $420 million revolving credit facility, which had $35.0 million of outstanding borrowings as of August 1, 2020. The Company's total cash on hand includes $43.2 million proceeds, net of costs to sell and other deductions, from the sale and leaseback of its corporate headquarters, ancillary office space and a nearby refurbishment center in Grapevine, Texas and $8.6 million net proceeds from the sale of the Company's corporate aircraft. See Note 1, "General Information," and Note 5, "Leases," for further information on the sale of the corporate aircraft and the sale and leaseback transactions. As mentioned above, the Company has taken actions to align expenses and inventory levels given the impacts of the current operating environment and has projected it will have adequate liquidity for the next 12 months and the foreseeable future to maintain normal operations. Additionally, during the second quarter of fiscal 2020, the Company completed an exchange offer for its unsecured senior notes due in March 2021 resulting in the replacement of 52% of such notes for newly issued secured senior notes due in March 2023. See Note 6, "Debt," for further details on the exchange offer and related impacts to scheduled debt maturities. 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 the Company's share of Social Security payroll taxes. The Company qualified for the deferral of payroll and other tax payments and, as a result, it has deferred, and continues to defer payroll taxes and other tax payments through the end of the calendar year 2020. The payment of these deferred amounts are required to be made in 2021 and 2022 calendar years. These deferrals are included in accrued liabilities and other current liabilities within the Company's unaudited condensed consolidated balance sheets. In addition, during the second quarter of fiscal 2020, the Company's French subsidiary obtained €20.0 million of unsecured term loans, 90% of which is guaranteed by the French government pursuant to a state guaranteed loan program instituted in connection with the COVID-19 pandemic. See Note 6, "Debt" for further information. During the 13 and 26 weeks ended August 1, 2020, the Company received $9.1 million of COVID-19-related rent concessions comprised of rent abatements and rent deferrals. The Company applied lease modification guidance to any concession arrangement that extended the term of the lease and substantially altered future cash flows. The Company elected, as permitted by the guidance issued by the FASB during the COVID-19 pandemic, to not use lease modification accounting for all rent concessions including any rent abatements related to leases not subject to an extension of the original terms. For these leases, which represented most of the leases subject to COVID-19-related rent concessions, the Company reduced rent expense in the later of the month in which the landlord issued the rent concession or the month for which the rent concession related. For rent concessions including a deferral of the lease payment, the liability for these rent amounts will remain on the balance sheet until paid. The COVID-19 pandemic remains an evolving situation and its impact on the Company's business, operating results, cash flows and financial conditions will depend 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 the Company continues to comply with all governmental health and safety requirements for its associates and customers while resuming and maintaining full operations, the persistence of the COVID-19 pandemic may require the Company to temporarily close stores again in future periods or introduce modified operating schedules and may impact customer behaviors, including a potential reduction in consumer discretionary spending. These developments could increase asset recovery and valuation risks. Further, the uncertainties in the global economy could impact the financial viability of the Company's suppliers, which may interrupt the Company's supply chain and require other changes to operations. In light of the foregoing, the extent and duration of the COVID-19 pandemic, and responses of governments, customers, suppliers and other third parties, may materially adversely impact the Company's business, financial condition, results of operations and cash flows. |
Revenue
Revenue | 6 Months Ended |
Aug. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue At the end of fiscal 2019, the Company revised the categories of its 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 26 Weeks Ended August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Hardware and accessories (1) $ 441.6 $ 554.9 $ 954.7 $ 1,211.4 Software (2) 386.5 558.3 803.5 1,291.4 Collectibles 113.9 172.5 204.8 330.6 Total $ 942.0 $ 1,285.7 $ 1,963.0 $ 2,833.4 __________________________________________________ (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 Simply Mac stores, which were sold in September 2019. (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 The Company has arrangements with customers where its performance obligations are satisfied over time, which primarily relate to extended warranties and its Game Informer ® magazine. Revenues do not include sales tax or other taxes collected from customers. The Company expects to recognize revenue in future periods for remaining performance obligations it has associated with unredeemed gift cards, trade-in credits, reservation deposits and its PowerUp Rewards loyalty program (collectively, "unredeemed customer liabilities"), extended warranties and subscriptions to its Game Informer ® magazine. Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time customers redeem gift cards, trade-in credits, customer deposits or loyalty program points for products offered by the Company. Unredeemed customer liabilities are generally redeemed within one year of issuance. As of August 1, 2020 and August 3, 2019, the Company's unredeemed customer liabilities totaled $213.0 million and $250.6 million, respectively. The Company offers 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 August 1, 2020 and August 3, 2019, the Company's deferred revenue liability related to extended warranties totaled $50.6 million and $63.3 million, respectively. Performance obligations associated with subscriptions to Game Informer ® magazine are satisfied when monthly magazines are delivered in print form or made available in digital format. The significant majority of customer subscriptions are for 12 monthly issues. As of August 1, 2020 and August 3, 2019, the Company had deferred revenue of $29.1 million and $40.6 million, respectively, associated with Game Informer ® magazine. Significant Judgments and Estimates The Company accrues PowerUp Rewards loyalty points at the estimated retail price per point, net of estimated breakage, which can be redeemed by loyalty program members for products offered by the Company. The estimated retail price per point is based on the actual historical retail prices of product(s) purchased through the redemption of loyalty points. The Company estimates breakage of loyalty points and unredeemed gift cards based on historical redemption rates. Contract Balances The Company's contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with extended warranties and subscriptions to Game Informer ® magazine. The opening balance, current period changes and ending balance of the Company's contract liabilities are as follows (in millions): August 1, 2020 August 3, 2019 Contract liability beginning balance $ 339.2 $ 376.9 Increase to contract liabilities (1) 354.1 412.9 Decrease to contract liabilities (2) (402.0) (432.6) Other adjustments (3) 1.4 (2.7) Contract liability ending balance $ 292.7 $ 354.5 __________________________________________________ (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 customer deposits as well as revenues recognized for Game Informer ® and extended warranties. During the 26 weeks ended August 1, 2020, there were $30.4 million of gift cards redeemed that were outstanding as of February 1, 2020. During the 26 weeks ended August 3, 2019, there were $39.8 million of gift cards redeemed that were outstanding as of February 2, 2019. (3) Primarily includes foreign currency translation adjustments. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 6 Months Ended |
Aug. 01, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | 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 the Company's 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 the Company's foreign currency contracts, Company-owned life insurance policies with a cash surrender value, and certain nonqualified deferred compensation liabilities. The Company values its foreign currency contracts, 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. The Company's assets and liabilities measured at fair value on a recurring basis as of August 1, 2020, August 3, 2019 and February 1, 2020, utilize Level 2 inputs and include the following (in millions): August 1, 2020 August 3, 2019 February 1, 2020 Assets Foreign currency contracts (1) $ 2.9 $ 3.2 $ 1.4 Company-owned life insurance (2) 3.0 16.3 4.1 Total assets $ 5.9 $ 19.5 $ 5.5 Liabilities Foreign currency contracts (3) $ 8.4 $ 1.6 $ 0.3 Nonqualified deferred compensation (3) 1.0 1.2 1.0 Total liabilities $ 9.4 $ 2.8 $ 1.3 __________________________________________________ (1) Recognized in prepaid expenses and other current assets in the Company's unaudited condensed consolidated balance sheets. (2) Recognized in other non-current assets in the Company's unaudited condensed consolidated balance sheets. (3) Recognized in accrued liabilities and other current liabilities in the Company's unaudited condensed consolidated balance sheets. The Company uses forward exchange contracts to manage currency risk primarily related to intercompany loans 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 loans denominated in foreign currencies. The total gross notional value of derivatives related to the Company's foreign currency contracts was $246.6 million, $223.7 million and $144.6 million as of August 1, 2020, August 3, 2019 and February 1, 2020, respectively. Activity related to the trading of derivative instruments and the offsetting impact of related intercompany loans denominated in foreign currencies recognized in selling, general and administrative expense is as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, (Losses) gains on the changes in fair value of derivative instruments $ (7.6) $ 0.4 $ (5.2) $ 2.8 Gains (losses) on the re-measurement of related intercompany loans denominated in foreign currencies 7.3 (0.4) 5.2 (2.8) Net losses $ (0.3) $ — $ — $ — The Company does not use derivative financial instruments for trading or speculative purposes. The Company is exposed to counterparty credit risk on all of its derivative financial instruments and cash equivalent investments. The Company manages counterparty risk according to the guidelines and controls established under comprehensive risk management and investment policies. The Company continuously monitors its counterparty credit risk and utilizes a number of different counterparties to minimize its exposure to potential defaults. The Company does not require collateral under derivative or investment agreements. Assets that are Measured at Fair Value on a Non-recurring Basis Assets that are measured at fair value on a non-recurring basis relate primarily to property and equipment and other intangible assets, which are remeasured when the estimated fair value is below its carrying value. For these assets, the Company does not periodically adjust carrying value to fair value; rather, when it determines that impairment has occurred, the carrying value of the asset is reduced to its fair value. During the 13 and 26 weeks ended August 1, 2020, the Company recognized impairment charges totaling $0.4 million and $1.6 million associated with store-level assets, to reflect their fair values of zero. For further details regarding these store-level impairments, see Note 2, "COVID-19 Impacts." During the 13 and 26 weeks ended August 1, 2020, the Company also recognized impairment charges of $0.5 million and $3.2 million, respectively, related to its corporate aircraft to reflect its fair value of $8.6 million prior to the sale of the aircraft on June 5, 2020. Other Fair Value Disclosures The carrying values of the Company's cash equivalents, receivables, net, accounts payable and notes payable approximate their fair values due to their short-term maturities. |
Leases
Leases | 6 Months Ended |
Aug. 01, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company conducts the substantial majority of its business with leased real estate properties, including retail stores, warehouse facilities and office space. The Company also leases 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 the Company 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 the Company's lease agreements are classified as operating leases. Effective February 3, 2019, the Company adopted ASC 842, Leases. Under ASC 842, fixed payments associated with its operating leases are included in operating lease right-of-use ("ROU") assets and both current and noncurrent operating lease liabilities on the balance sheet. The Company determines if an arrangement is considered a lease at inception. ROU assets are recognized 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, the Company utilizes its 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 the Company's credit rating, country risk, corporate bond yields, the effect of collateralization, as well as comparison to its borrowing rates. For real estate leases, the Company does not separate the components of a contract, thus its future payments include minimum rent payments and fixed executory costs. For non-real estate leases, future payments include only fixed minimum rent payments. The Company records the amortization of ROU assets and the accretion of lease liabilities as a single lease cost on a straight-line basis over the lease term, which includes option terms the Company is reasonably certain to exercise. The Company recognizes cash or lease incentives as a reduction to the ROU asset. ROU assets are assessed for impairment in accordance with the Company's 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. In July of 2020, the Company sold, in separate unrelated transactions, to unaffiliated third parties: i) its corporate headquarters and ancillary office space in Grapevine, Texas for $28.5 million, net of costs to sell and ii) a nearby refurbishment center for $15.2 million, net of costs to sell. The net proceeds from the sale of these assets will be used for general corporate purposes. As a result of these transactions, a gain on sale of assets of $11.3 million was recognized, which is included in the Company's unaudited condensed consolidated statement of operations in gain on sale of assets for the 13 and 26 weeks ended August 1, 2020. In connection with each of the sales, the Company leased-back from the applicable purchasers its corporate headquarters for an initial term of ten years, and the ancillary office space and refurbishment center for two years. The leaseback agreement for the corporate headquarters contains three renewal periods of five years each; the Company recognized only the initial term of the lease as part of its right-of-use asset and lease liability for the corporate headquarters. The other facilities do not contain a renewal option. The annual rent for the corporate headquarters will start at $1.7 million, plus taxes, utilities, management fees and other operating and maintenance expenses and will increase by 2.25% per year. The annual rent for the other facilities will be $1.3 million with no rent escalation, plus taxes, utilities, management fees and other operating and maintenance expenses. These leaseback agreements are accounted for as operating leases. With respect to the leaseback of the corporate headquarters, the Company agreed to provide a letter of credit to the buyer-lessor within 18 months from the closing date to secure the Company's lease obligation. Given that the purchase price of the corporate headquarters was reduced by $2.8 million to account for the deferred issuance of this letter of credit, as of August 1, 2020 the Company recognized a contract asset for the same amount within “prepaid expenses and other current assets” representing the variable consideration on the purchase price. Upon delivering the letter of credit, the Company will be entitled to a rent credit of an equivalent amount. This variable consideration is included in the total gain on sale of assets recognized during the second quarter of 2020. Subsequent to the 26 weeks ended August 1, 2020, we sold and leased-back the Company's Australian and Canadian headquarters. See Note 11, "Subsequent Events," for further information. Rent expense under operating leases was as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Operating lease cost $ 78.9 $ 85.0 $ 160.3 $ 171.2 Variable lease cost (1) 19.2 24.8 40.1 49.1 Total rent expense $ 98.1 $ 109.8 $ 200.4 $ 220.3 _____________________________________________ (1) Variable lease cost primarily includes percentage rentals and variable executory costs. During the 26 weeks ended August 1, 2020 and August 3, 2019, the Company had cash outflows of $101.8 million and $150.6 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. The Company recognized $34.5 million and $84.7 million during the 26 weeks ended August 1, 2020 and August 3, 2019, respectively, of ROU assets that were obtained in exchange for operating lease obligations. During the 13 and 26 weeks ended August 1, 2020, $0.1 million and $0.6 million, respectively, of store-level ROU asset impairment charges were recognized. The Company did not record any impairment charges related to ROU assets during the 13 and 26 weeks ended August 3, 2019. The weighted-average remaining lease term, which includes reasonably certain renewal options, and the weighted-average discount rate for operating leases included in the measurement of the Company's lease liabilities, as of August 1, 2020, August 3, 2019, and February 1, 2020, were as follows: August 1, 2020 August 3, 2019 February 1, 2020 Weighted-average remaining lease term (years) (1) 4.6 4.5 4.7 Weighted-average discount rate 4.5 % 4.5 % 4.1 % _____________________________________________ (1) The weighted-average remaining lease term is weighted based on the lease liability balance for each lease as of August 1, 2020, August 3, 2019 and February 1, 2020. This weighted average calculation differs from the Company's simple average remaining lease term due to the inclusion of reasonably certain renewal options and the effect of the lease liability value of longer term leases. Expected lease payments associated with the Company's operating lease liabilities, excluding percentage rentals, as of August 1, 2020, are as follows (in millions): Period Operating Leases (1) Remainder of Fiscal Year 2020, as of August 1, 2020 $ 137.5 Fiscal Year 2021 201.2 Fiscal Year 2022 139.6 Fiscal Year 2023 99.2 Fiscal Year 2024 70.5 Thereafter 120.5 Total remaining lease payments 768.5 Less: Interest (74.2) Present value of lease liabilities (2) $ 694.3 _______________________________________________________________ (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 $218.8 million classified as current portion of operating lease liabilities and $475.5 million classified as long-term operating lease liabilities. |
Debt
Debt | 6 Months Ended |
Aug. 01, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The carrying value of the Company's debt is comprised as follows (in millions): August 1, 2020 August 3, 2019 February 1, 2020 Revolving credit facility due November 2022 $ 35.0 $ — $ — French term loans due June 2021 23.5 — — 2021 Senior Notes principal amount 198.2 421.4 421.4 2023 Senior Notes principal amount 216.4 — — Less: Senior Notes unamortized debt financing costs (0.9) (2.3) (1.6) Total debt, net (1) $ 472.2 $ 419.1 $ 419.8 Less: short-term debt and current portion of long-term debt (2) (256.3) — — Long-term debt, net $ 215.9 $ 419.1 $ 419.8 _______________________________________________________________ (1) The Company's subsidiary Micromania SAS obtained an unsecured credit facility during the second quarter of fiscal 2020, which was undrawn and had no outstanding borrowings under the facility as of August 1, 2020. (2) Includes the revolving credit facility due November 2022, the French term loans due June 2021, and the current portion of the 2021 Senior Notes, net of the associated unamortized debt financing costs. Senior Notes 2023 Senior Notes. On June 5, 2020, the Company launched an offer to exchange (the “Exchange Offer”) any and all of its then outstanding $414.6 million aggregate principal amount of its 6.75% senior notes due March 15, 2021 (the "2021 Senior Notes") by eligible holders for up to $414.6 million of newly issued secured senior notes due 2023 (the “2023 Senior Notes”). On July 6, 2020, in connection with the settlement of the Exchange Offer, the Company issued $216.4 million aggregate principal amount of the 2023 Senior Notes, which bear interest at a rate of 10.00% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2020. The 2023 Senior Notes will mature on March 15, 2023. The Company incurred fees and expenses related to the Exchange Offer of $7.4 million, primarily consisting of bank and legal fees, which are included in selling, general and administrative expenses in the Company's condensed consolidated statements of operations for the 13 and 26 weeks ended August 1, 2020. Additionally, approximately 52% or $0.5 million of the unamortized deferred financing costs associated with the outstanding 2021 Senior Notes will be amortized over the term of the 2023 Senior Notes. The 2023 Senior Notes are redeemable at the Company's option in whole or in part prior to March 15, 2022 at a price equal to 100.0% of the principal amount plus a “make-whole premium,” together with accrued and unpaid interest. On or after March 15, 2022, the 2023 Senior Notes will be redeemable, in whole or in part, at a redemption price equal to 100.0% of the principal amount plus accrued and unpaid interest, if any, up to but not including the applicable redemption date. In addition, at any time on or prior to March 15, 2022, the Company may, subject to certain limitations, redeem up to 35.0% of the aggregate principal amount of the 2023 Senior Notes at a redemption price equal to 110.0% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, up to but not including the applicable redemption date, with the net cash proceeds of certain equity offerings. If the Company or its restricted subsidiaries sell assets, under certain circumstances, it will be required to use the net proceeds to make an offer to repurchase 2023 Senior Notes at an offer price in cash in an amount equal to 100.0% of the principal amount plus accrued and unpaid interest, if any, up to but not including the repurchase date. Upon a Change of Control (as defined in the indenture governing the 2023 Senior Notes), the Company must offer to purchase the 2023 Senior Notes at a purchase price equal to 101.0% of the principal amount, plus accrued and unpaid interest, if any, up to but not including the date of such repurchase. The Company's obligations under the 2023 Senior Notes are fully and unconditionally guaranteed on a senior secured basis by each of its existing and future domestic subsidiaries that guarantee certain of the Company's indebtedness or indebtedness of guarantors, including indebtedness under the Company's asset-based revolving credit facility. The 2023 Senior Notes and the related guarantees are secured by first-priority liens on most of the Company's and the guarantors’ assets other than certain Excluded Property and ABL Priority Collateral (each as defined in the indenture governing the 2023 Senior Notes), and by second-priority liens on the ABL Priority Collateral (which generally includes most of the Company's and the guarantors’ credit card receivables, accounts receivable, payment intangibles, inventory, pledged deposit accounts and related assets), in each case, subject to certain exceptions and permitted liens. The indenture governing the 2023 Senior Notes contains covenants that restrict the Company's ability and that of its restricted subsidiaries to incur, assume or permit to exist additional indebtedness or guaranty obligations; declare or pay dividends or redeem or repurchase capital stock; prepay, redeem or purchase certain subordinated indebtedness; issue certain preferred stock or similar equity securities; make loans and certain investments; sell assets; incur liens; engage in transactions with affiliates; enter into agreements restricting the ability of subsidiaries to pay dividends; and engage in mergers, acquisitions and other business combinations. If the 2023 Senior Notes are assigned investment grade ratings and no default or event of default has occurred and is continuing, certain of these covenants will be suspended. The 2023 Senior Notes indenture also contains certain affirmative covenants and events of default. The 2023 Senior Notes have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or the securities laws of any state and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act and applicable state securities laws. 2021 Senior Notes. In March 2016, the Company issued $475.0 million aggregate principal amount of unsecured 6.75% senior notes due March 15, 2021 (the "2021 Senior Notes"). The 2021 Senior Notes bear interest at the rate of 6.75% per annum with interest payable semi-annually in arrears on March 15 and September 15 of each year beginning on September 15, 2016. The net proceeds from the offering were used for general corporate purposes, including acquisitions and dividends. The Company incurred fees and expenses related to the 2021 Senior Notes offering of $8.1 million, which were capitalized during the first quarter of fiscal 2016 and are being amortized as interest expense over the term of the notes. In connection with the Exchange Offer discussed above, approximately $0.5 million of these fees and expenses are now being amortized as interest expense over the term of the 2023 Notes. The 2021 Senior Notes were sold in a private placement and are not registered under the Securities Act. The 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. During the 26 weeks ended August 1, 2020, the Company repurchased $6.8 million of its 2021 Senior Notes in open market transactions at prices ranging from 71.5% to 79.1% of par value, of which $0.5 million were retired as of May 2, 2020, with the remaining $6.3 million retired as of May 21, 2020. In connection with the Exchange Offer, $216.4 million aggregate principal amount of the 2021 Senior Notes was exchanged at par for the 2023 Senior Notes and all interest that had accrued on the 2021 Senior Notes that were exchanged was paid through July 6, 2020, thus leaving an aggregate principal amount of the 2021 Senior Notes of $198.2 million as of August 1, 2020. During the first half of fiscal 2019, the Company repurchased $53.6 million of its 2021 Senior Notes in open market transactions at prices ranging from 99.6% to 101.5% of par value. In connection with the Exchange Offer, the Company entered into the Fifth Supplemental Indenture governing its 2021 Senior Notes, which became effective on July 6, 2020. The Fifth Supplemental Indenture deleted several sections of the original indenture in their entirety, including sections that placed certain restrictions on the Company and its subsidiaries, including limitations on asset sales, additional liens, investments, stock repurchases, the incurrence of additional debt, the repurchase of debt and payments of dividends to its stockholders. In addition, the Fifth Supplemental Indenture eliminated certain events of default, including defaults related to the failure to pay, or acceleration of, other debt, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy, insolvency and reorganization of the Company's subsidiaries. However, the indenture continues to include events of default for failure to pay the principal or interest owing in respect of the 2021 Senior Notes and for certain events of bankruptcy, insolvency and reorganization of the Company. If an event of default, as amended by the Fifth Supplemental Indenture, were to occur and be continuing, then the principal amount of the 2021 Senior Notes, plus accrued and unpaid interest, if any, could be declared to be immediately due and payable. Such amounts would automatically become due and payable if an event of default relating to certain events of bankruptcy, insolvency or reorganization were to occur. Revolving Credit Facility The Company maintains an asset-based revolving credit facility (the “Revolver”) with a borrowing base capacity of $420 million and a maturity date of November 2022. The Revolver also includes a $200 million expansion feature and $50 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”) rate loans, range from 1.25% to 1.50%. The Revolver is secured by substantially all of the assets of the Company and the assets of its domestic subsidiaries. Borrowing availability under the Revolver is limited to a borrowing base which allows the Company to borrow up to 90% of the appraisal value of the inventory, plus 90% of eligible credit card receivables, net of certain reserves. The borrowing base provides for borrowing of up to 92.5% of the appraisal value during the period between July 15 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. The Company's 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 basis 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, the Company will be subject to a fixed charge coverage ratio covenant of 1.0:1.0 (the "Availability Reduction"). The Revolver places certain restrictions on the Company and its subsidiaries, including limitations on asset sales, additional liens, investments, loans, guarantees, acquisitions and the incurrence of additional indebtedness. Absent consent from the Company's lenders, it may not incur more than $1 billion of senior secured debt and $750 million of additional unsecured indebtedness to be limited to $250 million in general unsecured obligations and $500 million in unsecured obligations to finance acquisitions valued at $500 million or more. The per annum interest rate under the Revolver is variable and is calculated by applying a margin (1) for prime rate loans of 0.25% to 0.50% 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 the Company's average daily excess availability under the facility. In addition, the Company is required to pay a commitment fee of 0.25% for any unused portion of the total commitment under the Revolver. As of August 1, 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 the Company or the borrowers proving to be false in any material respect, certain bankruptcy, insolvency or receivership events affecting the Company or its 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 26 weeks ended August 1, 2020, the Company borrowed $150.0 million and repaid $115.0 million under its revolving credit facility. As of August 1, 2020, total availability under the Revolver after giving effect to the Availability Reduction was $28.4 million, with outstanding borrowings of $35.0 million and outstanding standby letters of credit of $27.3 million. The Company is currently in compliance with the financial requirements of the Revolver. The Revolver terms stated above were in effect as of August 1, 2020. On August 28, 2020 the Company entered into an agreement that amended certain terms of the Revolver and a new letter of credit facility with Bank of America, N.A. See Note 11, "Subsequent Events" for further details. Luxembourg Line of Credit In September 2007, the Company's Luxembourg subsidiary entered into a $20.0 million Uncommitted Line of Credit (the “Line of Credit”) with Bank of America. There is no term associated with the Line of Credit and Bank of America may withdraw the facility at any time without notice. The Line of Credit is available to the Company's 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 August 1, 2020, there were no cash overdrafts outstanding under the Line of Credit and bank guarantees outstanding totaled $1.0 million. French Term Loans and Credit Facility During the second quarter of fiscal 2020, the Company's French subsidiary, Micromania SAS, entered into three separate unsecured term loans for a total of €20.0 million. The term loans bear interest at 0% and mature in June 2021, but may be extended for up to five In addition, Micromania SAS obtained a credit facility of €20.0 million that allows it to obtain short term loans of 10 to 93 days in duration to support its working capital needs. €10.0 million of the commitments expire in March 2021 and the remaining €10.0 million expire in June 2021. Loans made under the credit facility accrue interest at a variable rate tied to the Euro Interbank Offered Rate plus an applicable margin of 1.5% and are secured by a pledge of the bank account from which repayments of the loans are or will be made. As of August 1, 2020, the credit facility was undrawn and there were no outstanding borrowings under the facility. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Aug. 01, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments During the 26 weeks ended August 1, 2020, there were no material changes to the Company's commitments as disclosed in its 2019 Annual Report on Form 10-K. Contingencies Legal Proceedings In the ordinary course of business, the Company is, from time to time, subject to various legal proceedings, including matters involving wage and hour employee class actions, stockholder actions and consumer class actions. The Company may enter into discussions regarding settlement of these and other types of lawsuits, and may enter into settlement agreements, if it believes settlement is in the best interest of its stockholders. The Company does not believe that any such existing legal proceedings or settlements, individually or in the aggregate, will have a material effect on its financial condition, results of operations or liquidity. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Aug. 01, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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. The Company has certain undistributed stock awards that participate in dividends on a nonforfeitable 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) per common share is as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Weighted-average common shares outstanding 65.0 100.0 64.7 101.2 Dilutive effect of stock options and restricted stock awards — — — — Weighted-average diluted common shares outstanding 65.0 100.0 64.7 101.2 Anti-dilutive stock options and restricted stock awards 3.7 2.5 3.7 2.5 |
Segment Information
Segment Information | 6 Months Ended |
Aug. 01, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates its business in four geographic segments: United States, Canada, Australia and Europe. The Company identifies 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; its e-commerce website www.gamestop.com; Game Informer ® magazine; and Simply Mac, which was sold in September 2019. The United States segment also includes general and administrative expenses related to the Company's 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 10 European countries. As a result of the rationalization of our global store base and the wind-down of certain European operations that began in fiscal 2019, as of August 1, 2020 the Company has ongoing operations in 6 European countries. The Company measures 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 no material intersegment sales during the 13 and 26 weeks ended August 1, 2020 and August 3, 2019. Segment information for the 13 and 26 weeks ended August 1, 2020 and August 3, 2019 is as follows (in millions): United Canada Australia Europe Consolidated 13 weeks ended August 1, 2020 Net sales $ 584.2 $ 41.9 $ 149.1 $ 166.8 $ 942.0 Operating (loss) earnings (71.7) (0.7) 11.6 (24.8) (85.6) 13 weeks ended August 3, 2019 Net sales $ 880.0 $ 63.0 $ 121.2 $ 221.5 $ 1,285.7 Operating loss (414.1) (7.1) (2.2) (23.3) (446.7) United Canada Australia Europe Consolidated 26 weeks ended August 1, 2020 Net sales $ 1,344.8 $ 81.6 $ 262.8 $ 273.8 $ 1,963.0 Operating (loss) earnings (122.8) (10.1) 11.1 (71.8) (193.6) 26 weeks ended August 3, 2019 Net sales $ 2,023.2 $ 135.6 $ 222.8 $ 451.8 $ 2,833.4 Operating loss (361.9) (12.4) (10.4) (44.5) (429.2) |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid 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 Coronavirus Aid, Relief, and Economic Securities Act (the "CARES Act"), which was enacted on March 27, 2020 in the United States, includes measures to assist companies, including temporary changes to income and non-income-based tax laws. With respect to the CARES Act, the Company currently expects to benefit from the deferral of certain payroll taxes through the end of calendar year 2020, the carryback of a net operating loss for fiscal 2020, the modification of limitation on business interest and the technical correction with respect to qualified improvement property. The Company recognized income tax expense of $17.9 million for the 13 weeks ended August 1, 2020 compared to an income tax benefit of $40.1 million for the 13 weeks ended August 3, 2019. The Company's effective income tax rate decreased to (19.2)% for the 13 weeks ended August 1, 2020 compared to 8.8% for the 13 weeks ended August 3, 2019. The decrease in the effective income tax rate and the corresponding change from tax benefit to tax expense compared to the prior year quarter was primarily driven by the significant decrease in the pre-tax book loss, impacts of the CARES Act, the relative mix of earnings across the jurisdictions within which the Company operates, the impact of significant valuation allowances established in the U.S. in the current year, and the discrete tax effect of the sale and leaseback transactions during the second quarter. The Company recognized income tax expense of $68.3 million for the 26 weeks ended August 1, 2020 compared to an income tax benefit of $37.8 million for the 26 weeks ended August 3, 2019. The Company's effective income tax rate decreased to (32.9)% for the 26 weeks ended August 1, 2020 compared to 8.5% for the 26 weeks ended August 3, 2019. The decrease in the effective income tax rate and the corresponding change from tax benefit to tax expense compared to the prior year quarter was primarily driven by the significant decrease in the pre-tax book loss, impacts of the CARES Act, the relative mix of earnings across the jurisdictions within which the Company operates, the impact of significant valuation allowances established in the U.S. in the current year, and the discrete tax effect of the sale and leaseback transactions during the second quarter. The Company assesses 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. The Company has established valuation allowances in certain foreign jurisdictions where it has determined existing deferred tax assets are not more likely than not to be realized. During the first quarter of fiscal 2020, a full valuation allowance was established on all the U.S. and state deferred tax assets in the amount of $53.0 million. The Company continues 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Aug. 01, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Sale-Leaseback Transactions On August 12, 2020, the Company sold its Australian headquarters in Eagle Farm, Queensland to an unrelated party for approximately $27.0 million, net of costs to sell, and immediately leased back the facility for a term of ten years on market rate terms at an initial annual base rent of approximately $1.7 million, plus taxes, utilities, management fees and other operating and maintenance expenses which will increase 3.0% annually. The Company intends to use the net proceeds from the sale for general corporate purposes. On September 1, 2020, the Company sold its Canadian headquarters in Brampton, Ontario for approximately $16.7 million, net of costs to sell, and leaseback the facility for a term of five years on market rate terms at an annual base rent of approximately $0.9 million (subject to customary annual rent escalations) plus taxes, utilities, management fees and other operating and maintenance expenses. The Company intends to use the net proceeds from the sale of its Canadian headquarters for general corporate purposes . Amendment to Revolving Credit Facility On August 28, 2020, the Company entered into the fourth amendment (the “Fourth Amendment”) to the credit agreement governing its Revolver ("Credit Agreement") giving effect to certain amendments, including, but not limited to the following: • Reduced the amount of the excess availability trigger that determines whether the Company is subject to a fixed charge coverage ratio covenant of 1.0:1.0 from the greater of $30 million and 10% of the borrowing base to the greater of $12.5 million and 10% of the borrowing base; • Increased the sublimit for the issuances of letters of credit under the Credit Agreement from $50 million to $100 million; and • Increased the amount of letters of credit debt permitted to be issued separately from, and not pursuant to, the Credit Agreement from $25 million to (i) up to $150 million for letters of credit issued by borrowers/guarantors under the Credit Agreement and (ii) up to $75 million for letters of credit issued for the benefit of foreign subsidiaries, subject to the understanding that the outstanding amount of letters of credit issued under the Credit Agreement, combined with the outstanding amount of letters of credit otherwise permitted by the Credit Agreement cannot exceed $275 million in the aggregate. Letter of Credit Facility Also on August 28, 2020, the Company entered into a new letter of credit facility (the “LC Facility”) with Bank of America, N.A. (the “Lender”). The LC Facility provides for the issuance, at the Lender’s option and discretion, of letters of credit cash collateralized at 103% of the face amount thereof, in an amount not to exceed (i) $150 million through February 14, 2021 and (ii) $75 million from February 15, 2021 through August 31, 2021. The Lender may terminate the LC Facility at any time. The Company is obligated to pay a fee of 250 basis points per year on the daily undrawn face amount of each letter of credit and such additional fees as may be agreed by the Company and the Lender at the time each letter of credit is issued. |
General Information (Policies)
General Information (Policies) | 6 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The unaudited condensed consolidated financial statements include the Company's accounts and the accounts of its 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 the Company's 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 the Company's annual report on Form 10-K for the 52 weeks ended February 1, 2020, as filed with the Securities and Exchange Commission on March 27, 2020, (the “2019 Annual Report on Form 10-K”). The preparation of financial statements in conformity with GAAP requires the Company 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, the Company has made its best estimates and judgments of certain amounts included in the financial statements, and changes in the estimates and assumptions used by the Company could have a significant impact on its financial results. Actual results could differ from those estimates. Due to the seasonal nature of the Company's business, the results of operations for the 26 weeks ended August 1, 2020 are not indicative of the results to be expected for the 52 weeks ending January 30, 2021 ("fiscal 2020"). |
Reclassifications | ReclassificationsThe Company has made certain classifications in its consolidated statements of cash flows in order to conform to the current year presentation. |
Adoption of New Accounting Pronouncements and Recent Accounting Pronouncements | Adoption 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. The Company 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 the Company's consolidated financial statements. 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. The Company is currently evaluating the impact that ASU 2019-12 will have on its 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 the Company's 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 prospectively through December 31, 2022. The Company is currently evaluating the impact that ASU 2020-04 will have on its consolidated financial statements. |
General Information (Tables)
General Information (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash and Cash Equivalents | The following table provides a reconciliation of cash and cash equivalents 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): August 1, August 3, February 1, Cash and cash equivalents $ 735.1 $ 424.0 $ 499.4 Restricted cash (included in prepaid expenses and other current assets) 11.0 0.4 0.3 Restricted cash (included in other noncurrent assets) 12.5 13.3 13.8 Total cash and cash equivalents and restricted cash in the statements of cash flows $ 758.6 $ 437.7 $ 513.5 |
Disposal Groups, Including Discontinued Operations | The major classes of assets and liabilities held-for-sale were as follows (in millions): August 3, Assets: Cash and cash equivalents $ 0.1 Receivables, net 1.8 Merchandise inventories, net 15.4 Prepaid expenses and other current assets 0.6 Property and equipment, net 0.8 Operating lease right-of-use assets 9.0 Other assets 1.4 Total assets held-for-sale $ 29.1 Liabilities: Accounts payable $ 4.0 Accrued and other liabilities 1.1 Operating lease liabilities 9.4 Total liabilities held-for-sale $ 14.5 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Sales and Percentage of Total Net Sales by Significant Product Category | Net sales by significant product category for the periods indicated is as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, 2020 August 3, 2019 August 1, 2020 August 3, 2019 Hardware and accessories (1) $ 441.6 $ 554.9 $ 954.7 $ 1,211.4 Software (2) 386.5 558.3 803.5 1,291.4 Collectibles 113.9 172.5 204.8 330.6 Total $ 942.0 $ 1,285.7 $ 1,963.0 $ 2,833.4 __________________________________________________ (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 Simply Mac stores, which were sold in September 2019. (2) Includes sales of new and pre-owned video game software, digital software and PC entertainment software. |
Contract with Customer, Asset and Liability | The opening balance, current period changes and ending balance of the Company's contract liabilities are as follows (in millions): August 1, 2020 August 3, 2019 Contract liability beginning balance $ 339.2 $ 376.9 Increase to contract liabilities (1) 354.1 412.9 Decrease to contract liabilities (2) (402.0) (432.6) Other adjustments (3) 1.4 (2.7) Contract liability ending balance $ 292.7 $ 354.5 __________________________________________________ (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 customer deposits as well as revenues recognized for Game Informer ® and extended warranties. During the 26 weeks ended August 1, 2020, there were $30.4 million of gift cards redeemed that were outstanding as of February 1, 2020. During the 26 weeks ended August 3, 2019, there were $39.8 million of gift cards redeemed that were outstanding as of February 2, 2019. (3) Primarily includes foreign currency translation adjustments. |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis | The Company's assets and liabilities measured at fair value on a recurring basis as of August 1, 2020, August 3, 2019 and February 1, 2020, utilize Level 2 inputs and include the following (in millions): August 1, 2020 August 3, 2019 February 1, 2020 Assets Foreign currency contracts (1) $ 2.9 $ 3.2 $ 1.4 Company-owned life insurance (2) 3.0 16.3 4.1 Total assets $ 5.9 $ 19.5 $ 5.5 Liabilities Foreign currency contracts (3) $ 8.4 $ 1.6 $ 0.3 Nonqualified deferred compensation (3) 1.0 1.2 1.0 Total liabilities $ 9.4 $ 2.8 $ 1.3 __________________________________________________ (1) Recognized in prepaid expenses and other current assets in the Company's unaudited condensed consolidated balance sheets. (2) Recognized in other non-current assets in the Company's unaudited condensed consolidated balance sheets. (3) Recognized in accrued liabilities and other current liabilities in the Company's unaudited condensed consolidated balance sheets. |
Gains and Losses on Derivative Instruments and Foreign Currency Transaction | Activity related to the trading of derivative instruments and the offsetting impact of related intercompany loans denominated in foreign currencies recognized in selling, general and administrative expense is as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, (Losses) gains on the changes in fair value of derivative instruments $ (7.6) $ 0.4 $ (5.2) $ 2.8 Gains (losses) on the re-measurement of related intercompany loans denominated in foreign currencies 7.3 (0.4) 5.2 (2.8) Net losses $ (0.3) $ — $ — $ — |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Leases [Abstract] | |
Lease, Cost | Rent expense under operating leases was as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Operating lease cost $ 78.9 $ 85.0 $ 160.3 $ 171.2 Variable lease cost (1) 19.2 24.8 40.1 49.1 Total rent expense $ 98.1 $ 109.8 $ 200.4 $ 220.3 _____________________________________________ (1) Variable lease cost primarily includes percentage rentals and variable executory costs. The weighted-average remaining lease term, which includes reasonably certain renewal options, and the weighted-average discount rate for operating leases included in the measurement of the Company's lease liabilities, as of August 1, 2020, August 3, 2019, and February 1, 2020, were as follows: August 1, 2020 August 3, 2019 February 1, 2020 Weighted-average remaining lease term (years) (1) 4.6 4.5 4.7 Weighted-average discount rate 4.5 % 4.5 % 4.1 % _____________________________________________ (1) The weighted-average remaining lease term is weighted based on the lease liability balance for each lease as of August 1, 2020, August 3, 2019 and February 1, 2020. This weighted average calculation differs from the Company's simple average remaining lease term due to the inclusion of reasonably certain renewal options and the effect of the lease liability value of longer term leases. |
Lessee, Operating Lease, Liability, Maturity | Expected lease payments associated with the Company's operating lease liabilities, excluding percentage rentals, as of August 1, 2020, are as follows (in millions): Period Operating Leases (1) Remainder of Fiscal Year 2020, as of August 1, 2020 $ 137.5 Fiscal Year 2021 201.2 Fiscal Year 2022 139.6 Fiscal Year 2023 99.2 Fiscal Year 2024 70.5 Thereafter 120.5 Total remaining lease payments 768.5 Less: Interest (74.2) Present value of lease liabilities (2) $ 694.3 _______________________________________________________________ (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 $218.8 million classified as current portion of operating lease liabilities and $475.5 million classified as long-term operating lease liabilities. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The carrying value of the Company's debt is comprised as follows (in millions): August 1, 2020 August 3, 2019 February 1, 2020 Revolving credit facility due November 2022 $ 35.0 $ — $ — French term loans due June 2021 23.5 — — 2021 Senior Notes principal amount 198.2 421.4 421.4 2023 Senior Notes principal amount 216.4 — — Less: Senior Notes unamortized debt financing costs (0.9) (2.3) (1.6) Total debt, net (1) $ 472.2 $ 419.1 $ 419.8 Less: short-term debt and current portion of long-term debt (2) (256.3) — — Long-term debt, net $ 215.9 $ 419.1 $ 419.8 _______________________________________________________________ (1) The Company's subsidiary Micromania SAS obtained an unsecured credit facility during the second quarter of fiscal 2020, which was undrawn and had no outstanding borrowings under the facility as of August 1, 2020. (2) Includes the revolving credit facility due November 2022, the French term loans due June 2021, and the current portion of the 2021 Senior Notes, net of the associated unamortized debt financing costs. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Earnings Per Share [Abstract] | |
Reconciliation of Shares Used in Calculating Basic and Diluted Net Income (Loss) Per Common Share | A reconciliation of shares used in calculating basic and diluted net income (loss) per common share is as follows (in millions): 13 Weeks Ended 26 Weeks Ended August 1, August 3, August 1, August 3, Weighted-average common shares outstanding 65.0 100.0 64.7 101.2 Dilutive effect of stock options and restricted stock awards — — — — Weighted-average diluted common shares outstanding 65.0 100.0 64.7 101.2 Anti-dilutive stock options and restricted stock awards 3.7 2.5 3.7 2.5 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Aug. 01, 2020 | |
Segment Reporting [Abstract] | |
Sales by Segment | Segment information for the 13 and 26 weeks ended August 1, 2020 and August 3, 2019 is as follows (in millions): United Canada Australia Europe Consolidated 13 weeks ended August 1, 2020 Net sales $ 584.2 $ 41.9 $ 149.1 $ 166.8 $ 942.0 Operating (loss) earnings (71.7) (0.7) 11.6 (24.8) (85.6) 13 weeks ended August 3, 2019 Net sales $ 880.0 $ 63.0 $ 121.2 $ 221.5 $ 1,285.7 Operating loss (414.1) (7.1) (2.2) (23.3) (446.7) United Canada Australia Europe Consolidated 26 weeks ended August 1, 2020 Net sales $ 1,344.8 $ 81.6 $ 262.8 $ 273.8 $ 1,963.0 Operating (loss) earnings (122.8) (10.1) 11.1 (71.8) (193.6) 26 weeks ended August 3, 2019 Net sales $ 2,023.2 $ 135.6 $ 222.8 $ 451.8 $ 2,833.4 Operating loss (361.9) (12.4) (10.4) (44.5) (429.2) |
General Information - The Compa
General Information - The Company (Details) | 6 Months Ended |
Aug. 01, 2020countrysegmentstore | |
Accounting Policies [Abstract] | |
Number of stores | store | 5,100 |
Number of countries in which the entity operates | country | 10 |
Number of reportable segments | segment | 4 |
General Information - Reclassif
General Information - Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Reclassifications | ||||
Merchandise inventories | $ (394.2) | $ (270.5) | ||
Accounts payable and accrued liabilities | (193.7) | (839.4) | ||
Other | (0.2) | 3.7 | ||
Depreciation and amortization (including amounts in cost of sales) | 41.7 | 46.2 | ||
Selling, general and administrative expenses | $ 348.2 | $ 481.9 | 734.7 | 935.6 |
Goodwill and asset impairments | $ 0.9 | 363.9 | $ 4.8 | 363.9 |
Reclassification | ||||
Reclassifications | ||||
Provision for inventory reserves | (21.5) | |||
Merchandise inventories | 21.5 | |||
Accounts payable and accrued liabilities | 11.7 | |||
Other | (11.7) | |||
Depreciation and amortization (including amounts in cost of sales) | 22.6 | (45.7) | ||
Selling, general and administrative expenses | 22.6 | 45.7 | ||
Goodwill impairments | (363.9) | (363.9) | ||
Goodwill and asset impairments | $ 363.9 | $ 363.9 |
General Information - Restricte
General Information - Restricted Cash (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | Feb. 02, 2019 |
Accounting Policies [Abstract] | ||||
Restricted cash and cash equivalents | $ 23.5 | $ 14.1 | $ 13.7 | |
Cash and cash equivalents | 735.1 | 499.4 | 424 | |
Restricted cash (included in prepaid expenses and other current assets) | 11 | 0.3 | 0.4 | |
Restricted cash (included in other noncurrent assets) | 12.5 | 13.8 | 13.3 | |
Total cash and cash equivalents and restricted cash in the statements of cash flows | $ 758.6 | $ 513.5 | $ 437.7 | $ 1,640.5 |
General Information - Assets He
General Information - Assets Held for Sale (Details) - USD ($) | Jun. 05, 2020 | Aug. 01, 2020 | Aug. 01, 2020 | Feb. 01, 2020 |
Accounting Policies [Abstract] | ||||
Assets held for sale | $ 11,800,000 | |||
Impairment charges from assets held for sale | $ 500,000 | $ 3,200,000 | ||
Proceeds from assets held for sale, net of costs to sell | $ 8,600,000 | $ 8,600,000 | ||
Gain (loss) on sale of aircraft | $ 0 |
General Information - Major Cla
General Information - Major Classes of Assets and Liabilities Held-for-Sale (Details) - Discontinued Operations, Disposed of by Sale - Simply Mac $ in Millions | Aug. 03, 2019USD ($) |
Assets: | |
Cash and cash equivalents | $ 0.1 |
Receivables, net | 1.8 |
Merchandise inventories, net | 15.4 |
Prepaid expenses and other current assets | 0.6 |
Property and equipment, net | 0.8 |
Operating lease right-of-use assets | 9 |
Other assets | 1.4 |
Total assets held-for-sale | 29.1 |
Liabilities: | |
Accounts payable | 4 |
Accrued and other liabilities | 1.1 |
Operating lease liabilities | 9.4 |
Total liabilities held-for-sale | $ 14.5 |
General Information - Property
General Information - Property and Equipment, Net (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | Feb. 01, 2020 | |
Accounting Policies [Abstract] | |||||
Accumulated depreciation | $ 1,176,500,000 | $ 1,255,300,000 | $ 1,176,500,000 | $ 1,255,300,000 | $ 1,190,100,000 |
Impairment losses from property and equipment | $ 300,000 | $ 0 | $ 1,000,000 | $ 0 |
General Information - Discontin
General Information - Discontinued Operations (Details) - Spring Mobile - Discontinued Operations, Disposed of by Sale - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Selling, general and administrative expenses | $ 0.4 | $ 2.2 | $ 1.2 | $ 3 |
Income tax benefit | $ 0.1 | $ 0.5 | $ 0.3 | $ 0.6 |
COVID-19 Impacts (Details)
COVID-19 Impacts (Details) € in Millions, $ in Millions | Jun. 05, 2020USD ($) | Sep. 09, 2020 | Aug. 01, 2020USD ($) | Jun. 30, 2020 | Aug. 01, 2020USD ($) | Aug. 01, 2020EUR (€) | Feb. 01, 2020USD ($) | Aug. 03, 2019USD ($) |
Debt Instrument [Line Items] | ||||||||
Stores open globally, percentage | 98.00% | |||||||
Incremental wages to help offset lost wages due to store closures and protective equipment | $ 21.4 | |||||||
Impairment losses from store closures | $ 0.4 | 1.6 | ||||||
Impairment charges from assets held for sale | 0.5 | 3.2 | ||||||
Proceeds from assets held for sale, net of costs to sell | $ 8.6 | 8.6 | ||||||
Valuation allowance recorded | 53 | |||||||
Cash and cash equivalents | 735.1 | 735.1 | $ 499.4 | $ 424 | ||||
Line of credit, current borrowing capacity | 420 | 420 | ||||||
Sale leaseback transaction | $ 43.2 | |||||||
Percentage of 6.75% notes due in 2021 exchanged for 10.0% notes due in 2023 | 52.00% | |||||||
Received rent concessions | $ 9.1 | $ 9.1 | ||||||
French Term Loans and Credit Facility | Unsecured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt issued | € | € 20 | |||||||
Percent guaranteed by french government | 90.00% | |||||||
Australia | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Temporary store closed, percentage | 15.00% |
Revenue - Sales and Percentage
Revenue - Sales and Percentage of Total Net Sales by Significant Product Category (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 942 | $ 1,285.7 | $ 1,963 | $ 2,833.4 |
Hardware And Accessories | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 441.6 | 554.9 | 954.7 | 1,211.4 |
Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 386.5 | 558.3 | 803.5 | 1,291.4 |
Collectibles | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 113.9 | $ 172.5 | $ 204.8 | $ 330.6 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Extended warranty term | 12 months | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Extended warranty term | 24 months | |
Customer Liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Deferred credits | $ 213 | $ 250.6 |
Extended Warranties | ||
Disaggregation of Revenue [Line Items] | ||
Deferred credits | 50.6 | 63.3 |
Magazine Subscriptions | ||
Disaggregation of Revenue [Line Items] | ||
Deferred credits | $ 29.1 | $ 40.6 |
Revenue - Change In Contract Li
Revenue - Change In Contract Liabilities (Details) - USD ($) $ in Millions | 6 Months Ended | |
Aug. 01, 2020 | Aug. 03, 2019 | |
Contract With Customer, Contract Liabilities [Roll Forward] | ||
Contract liability beginning balance | $ 339.2 | $ 376.9 |
Increase to contract liabilities | 354.1 | 412.9 |
Decrease to contract liabilities | (402) | (432.6) |
Other adjustments | 1.4 | (2.7) |
Contract liability ending balance | 292.7 | 354.5 |
Gift Card Trade In Credits | ||
Contract With Customer, Contract Liabilities [Roll Forward] | ||
Revenue recognized | $ 30.4 | $ 39.8 |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Fair Value of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Inputs, Level 2 - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Assets | |||
Foreign Currency Contracts | $ 2.9 | $ 1.4 | $ 3.2 |
Company-owned life insurance | 3 | 4.1 | 16.3 |
Total assets | 5.9 | 5.5 | 19.5 |
Liabilities | |||
Foreign Currency Contracts | 8.4 | 0.3 | 1.6 |
Nonqualified deferred compensation | 1 | 1 | 1.2 |
Total liabilities | $ 9.4 | $ 1.3 | $ 2.8 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Aug. 01, 2020 | Aug. 01, 2020 | Jun. 05, 2020 | Feb. 01, 2020 | Aug. 03, 2019 | Mar. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Notional value of foreign currency derivatives gross | $ 246.6 | $ 246.6 | $ 144.6 | $ 223.7 | ||
Impairment losses from store closures | 0.4 | 1.6 | ||||
Fair value of store-level assets | 0 | 0 | ||||
Impairment charges from assets held for sale | 0.5 | 3.2 | ||||
Assets held-for-sale | 0 | 0 | $ 8.6 | 11.8 | 29.1 | |
Long-term debt | $ 472.2 | $ 472.2 | $ 419.8 | $ 419.1 | ||
Unsecured Debt | Senior Notes 6.75% due 2021 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 6.75% | 6.75% | 6.75% | |||
Long-term debt | $ 197.8 | $ 197.8 | ||||
Senior Notes | Senior Notes 6.75% due 2021 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 6.75% | |||||
Senior Notes | Senior Notes 10.00% due 2023 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate | 10.00% | 10.00% | 10.00% | |||
Long-term debt | $ 215.9 | $ 215.9 | ||||
Fair Value, Inputs, Level 2 | Unsecured Debt | Senior Notes 6.75% due 2021 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | 172.3 | 172.3 | ||||
Fair Value, Inputs, Level 2 | Senior Notes | Senior Notes 10.00% due 2023 | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Fair value of debt | $ 194.2 | $ 194.2 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Gains and Losses on Derivative Instruments and Foreign Currency Transaction (Detail) - Selling, General and Administrative Expense - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Fair Value Derivative Contract Assets and Liabilities Measured On Recurring Basis Gain Loss Included In Earnings [Line Items] | ||||
(Losses) gains on the changes in fair value of derivative instruments | $ (7.6) | $ 0.4 | $ (5.2) | $ 2.8 |
Gains (losses) on the re-measurement of related intercompany loans denominated in foreign currencies | 7.3 | (0.4) | 5.2 | (2.8) |
Net losses | $ (0.3) | $ 0 | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2020USD ($) | Aug. 01, 2020USD ($) | Aug. 03, 2019USD ($) | Aug. 01, 2020USD ($)segment | Aug. 03, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Proceeds from Sale of Property, Plant, and Equipment | $ 51.8 | $ 0 | |||
Gain on sale of assets | $ 11.3 | $ 0 | 11.3 | 0 | |
Sale leaseback, provide letter of credit to the buyer-lessor from closing date, period | 18 months | ||||
Reduction in purchase price from deferred issuance of letter of credit | $ 2.8 | ||||
Cash outflows | 101.8 | 150.6 | |||
ROU assets obtained in exchange for operating lease obligations | 34.5 | $ 84.7 | |||
Impairment charges | $ 0.1 | $ 0.6 | |||
Corporate Headquarters | |||||
Lessee, Lease, Description [Line Items] | |||||
Proceeds from Sale of Property, Plant, and Equipment | 28.5 | ||||
Sale leaseback, lease terms | 10 years | ||||
Number of renewal periods | segment | 3 | ||||
Lessee, operating lease, renewal term | 5 years | 5 years | |||
Annual rent | $ 1.7 | ||||
Annual base rent percent increase | 2.25% | ||||
Office Space and Refurbishment Center | |||||
Lessee, Lease, Description [Line Items] | |||||
Proceeds from Sale of Property, Plant, and Equipment | $ 15.2 | ||||
Sale leaseback, lease terms | 2 years | ||||
Annual rent | $ 1.3 |
Leases - Rent Expense and Other
Leases - Rent Expense and Other Cost Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | Feb. 01, 2020 | |
Leases [Abstract] | |||||
Operating lease cost | $ 78.9 | $ 85 | $ 160.3 | $ 171.2 | |
Variable lease cost | 19.2 | 24.8 | 40.1 | 49.1 | |
Total rent expense | $ 98.1 | $ 109.8 | $ 200.4 | $ 220.3 | |
Weighted-average remaining lease term (years) | 4 years 7 months 6 days | 4 years 6 months | 4 years 7 months 6 days | 4 years 6 months | 4 years 8 months 12 days |
Weighted-average discount rate | 4.50% | 4.50% | 4.50% | 4.50% | 4.10% |
Leases - Minimum Lease Obligati
Leases - Minimum Lease Obligations for Operating Lease Liabilities (ASC 842) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Leases [Abstract] | |||
Remainder of Fiscal Year 2020, as of August 1, 2020 | $ 137.5 | ||
Fiscal Year 2021 | 201.2 | ||
Fiscal Year 2022 | 139.6 | ||
Fiscal Year 2023 | 99.2 | ||
Fiscal Year 2024 | 70.5 | ||
Thereafter | 120.5 | ||
Total remaining lease payments | 768.5 | ||
Less: Interest | (74.2) | ||
Present value of lease liabilities | 694.3 | ||
Current portion of operating lease liabilities | 218.8 | $ 239.4 | $ 240.3 |
Operating lease liabilities, long-term | $ 475.5 | $ 529.3 | $ 523.9 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Jul. 06, 2020 | Jun. 05, 2020 | Feb. 01, 2020 | Aug. 03, 2019 |
Debt Disclosure [Line Items] | |||||
Less: Senior Notes unamortized debt financing costs | $ (0.9) | $ (1.6) | $ (2.3) | ||
Total debt, net | 472.2 | 419.8 | 419.1 | ||
Less: short-term debt and current portion of long-term debt | (256.3) | 0 | 0 | ||
Long-term debt, net | 215.9 | 419.8 | 419.1 | ||
Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Less: Senior Notes unamortized debt financing costs | (0.5) | ||||
Revolving credit facility due November 2022 | Revolving Credit Facility | Line of Credit | |||||
Debt Disclosure [Line Items] | |||||
Principal amount | 35 | 0 | 0 | ||
French term loans due June 2021 | Unsecured Debt | |||||
Debt Disclosure [Line Items] | |||||
French term loans due June 2021 | 23.5 | 0 | 0 | ||
Senior Notes 6.75% due 2021 | Unsecured Debt | |||||
Debt Disclosure [Line Items] | |||||
Total debt, net | 197.8 | ||||
Senior Notes 6.75% due 2021 | Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Principal amount | 198.2 | $ 414.6 | 421.4 | 421.4 | |
Senior Notes 10.00% due 2023 | Senior Notes | |||||
Debt Disclosure [Line Items] | |||||
Principal amount | 216.4 | $ 216.4 | $ 0 | $ 0 | |
Total debt, net | $ 215.9 |
Debt - Narrative (Details)
Debt - Narrative (Details) € in Millions | May 21, 2020USD ($) | May 02, 2020USD ($) | Nov. 21, 2017 | Aug. 01, 2020USD ($)loan | Aug. 03, 2019USD ($) | Aug. 01, 2020USD ($) | Aug. 01, 2020EUR (€) | Aug. 03, 2019USD ($) | Aug. 01, 2020EUR (€) | Jul. 06, 2020USD ($) | Jun. 05, 2020USD ($) | Feb. 01, 2020USD ($) | Nov. 20, 2017USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2007USD ($) |
Debt Disclosure [Line Items] | |||||||||||||||
Selling, general and administrative expenses | $ 348,200,000 | $ 481,900,000 | $ 734,700,000 | $ 935,600,000 | |||||||||||
Unamortized deferred financing costs | 900,000 | 2,300,000 | 900,000 | 2,300,000 | $ 1,600,000 | ||||||||||
Amount retired | 62,900,000 | ||||||||||||||
Line of credit, current borrowing capacity | 420,000,000 | 420,000,000 | |||||||||||||
Borrowings from the revolver | 150,000,000 | 0 | |||||||||||||
Repayments of revolver borrowings | 115,000,000 | 0 | |||||||||||||
Senior Notes | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Selling, general and administrative expenses | 7,400,000 | $ 7,400,000 | |||||||||||||
Deferred finance costs percentage | 52.00% | 52.00% | |||||||||||||
Unamortized deferred financing costs | 500,000 | $ 500,000 | |||||||||||||
Redemption price percentage | 100.00% | 100.00% | |||||||||||||
Debt repurchased | $ 6,800,000 | $ 53,600,000 | $ 6,800,000 | $ 53,600,000 | |||||||||||
Amount retired | $ 6,300,000 | $ 500,000 | |||||||||||||
Senior Notes | Debt Instrument, Redemption, Period One | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Redemption price percentage | 100.00% | 100.00% | |||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Two | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Redemption price percentage | 100.00% | 100.00% | |||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Three | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Redemption price percentage | 110.00% | 110.00% | |||||||||||||
Percent of debt able to be redeemed | 35.00% | 35.00% | |||||||||||||
Senior Notes | Debt Instrument, Redemption, Period Four | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Redemption price percentage | 101.00% | 101.00% | |||||||||||||
Senior Notes | Minimum | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate | 71.50% | 99.60% | 71.50% | 99.60% | 71.50% | ||||||||||
Senior Notes | Maximum | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate | 79.10% | 101.50% | 79.10% | 101.50% | 79.10% | ||||||||||
Senior Notes 6.75% due 2021 | Senior Notes | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Principal amount | $ 198,200,000 | $ 421,400,000 | $ 198,200,000 | $ 421,400,000 | $ 414,600,000 | 421,400,000 | |||||||||
Interest rate | 6.75% | ||||||||||||||
Senior Notes 6.75% due 2021 | Unsecured Debt | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate | 6.75% | 6.75% | 6.75% | 6.75% | |||||||||||
Debt issued | $ 475,000,000 | ||||||||||||||
Debt issuance costs, gross | $ 8,100,000 | ||||||||||||||
Senior Notes 10.00% due 2023 | Senior Notes | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Principal amount | $ 216,400,000 | 0 | $ 216,400,000 | 0 | $ 216,400,000 | 0 | |||||||||
Potential exchange amount | $ 414,600,000 | ||||||||||||||
Interest rate | 10.00% | 10.00% | 10.00% | 10.00% | |||||||||||
Revolving credit facility due November 2022 | Letter of Credit | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | |||||||||||||
Revolving credit facility due November 2022 | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Commitment or the borrowing base, amount | $ 30,000,000 | $ 30,000,000 | |||||||||||||
Lesser of the total commitment or the borrowing base, percentage | 10.00% | 10.00% | 10.00% | ||||||||||||
Revolving credit facility due November 2022 | Unsecured Debt | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, maximum borrowing capacity | $ 250,000,000 | ||||||||||||||
Line of credit, for general unsecured obligations | 750,000,000 | ||||||||||||||
Line of credit facility, available for finance acquisitions | 500,000,000 | ||||||||||||||
Revolving credit facility due November 2022 | Secured Debt | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, maximum borrowing capacity | 1,000,000,000 | ||||||||||||||
Revolving credit facility due November 2022 | Line of Credit | Letter of Credit | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, maximum borrowing capacity | 50,000,000 | ||||||||||||||
Revolving credit facility due November 2022 | Line of Credit | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Principal amount | $ 35,000,000 | $ 0 | $ 35,000,000 | $ 0 | $ 0 | ||||||||||
Leverage ratio | 1 | ||||||||||||||
Line of credit, current borrowing capacity | 420,000,000 | ||||||||||||||
Line of credit facility additional borrowing capacity | 200,000,000 | ||||||||||||||
Incremental first-in, last-out facility | $ 50,000,000 | ||||||||||||||
Line of credit facility, maximum borrowing capacity percentage | 90.00% | ||||||||||||||
Credit card receivables, percentage | 90.00% | ||||||||||||||
Expected percentage of borrowing capacity | 92.50% | ||||||||||||||
Threshold for revolver excess availability | 20.00% | ||||||||||||||
Projected revolver usage percentage of the borrowing base during the prospective 12-month period, which is subject to meeting a fixed charge coverage ratio | 15.00% | ||||||||||||||
Commitment or the borrowing base, amount | $ 30,000,000 | ||||||||||||||
Lesser of the total commitment or the borrowing base, percentage | 10.00% | ||||||||||||||
Fixed charge coverage ratio | 1 | ||||||||||||||
Line of credit facility unused capacity commitment fee percentage | 0.25% | ||||||||||||||
Borrowings from the revolver | 150,000,000 | ||||||||||||||
Repayments of revolver borrowings | 115,000,000 | ||||||||||||||
Total availability under the revolver | 28,400,000 | 28,400,000 | |||||||||||||
Outstanding balance under revolving credit Facility | 35,000,000 | 35,000,000 | |||||||||||||
Letters of credit outstanding | $ 27,300,000 | $ 27,300,000 | |||||||||||||
Revolving credit facility due November 2022 | Prime Rate | Line of Credit | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Applicable margin rate | 0.25% | 0.25% | 0.25% | ||||||||||||
Revolving credit facility due November 2022 | Prime Rate | Line of Credit | Minimum | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate margin | 0.25% | ||||||||||||||
Revolving credit facility due November 2022 | Prime Rate | Line of Credit | Maximum | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate margin | 0.50% | ||||||||||||||
Revolving credit facility due November 2022 | Federal Funds Rate | Line of Credit | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Percentage in addition to the effective rate | 0.50% | ||||||||||||||
Revolving credit facility due November 2022 | London Interbank Offered Rate (LIBOR) | Line of Credit | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Percentage in addition to the effective rate | 1.00% | ||||||||||||||
Applicable margin rate | 1.25% | 1.25% | 1.25% | ||||||||||||
Revolving credit facility due November 2022 | London Interbank Offered Rate (LIBOR) | Line of Credit | Minimum | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate margin | 1.25% | ||||||||||||||
Revolving credit facility due November 2022 | London Interbank Offered Rate (LIBOR) | Line of Credit | Maximum | Revolving Credit Facility | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate margin | 1.50% | ||||||||||||||
Luxembourg Line of Credit | Line of Credit | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, current borrowing capacity | $ 20,000,000 | ||||||||||||||
Cash overdrafts outstanding | $ 0 | $ 0 | |||||||||||||
Bank guarantees outstanding | $ 1,000,000 | $ 1,000,000 | |||||||||||||
French Term Loans and Credit Facility | Unsecured Debt | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Interest rate | 0.00% | 0.00% | 0.00% | ||||||||||||
Debt issued | € | € 20 | ||||||||||||||
Number of separate unsecured term loans | loan | 3 | ||||||||||||||
Debt instrument, term | 5 years | ||||||||||||||
Percent guaranteed by french government | 90.00% | ||||||||||||||
French Term Loans and Credit Facility | Line of Credit | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Line of credit, current borrowing capacity | € | € 20 | ||||||||||||||
Applicable margin rate | 1.50% | 1.50% | 1.50% | ||||||||||||
Total availability under the revolver | € | € 10 | ||||||||||||||
Outstanding balance under revolving credit Facility | $ 0 | $ 0 | |||||||||||||
Line of credit facility, commitment | € | € 10 | ||||||||||||||
French Term Loans and Credit Facility | Line of Credit | Minimum | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Short term loans obtain period | 10 days | 10 days | |||||||||||||
French Term Loans and Credit Facility | Line of Credit | Maximum | |||||||||||||||
Debt Disclosure [Line Items] | |||||||||||||||
Short term loans obtain period | 93 days | 93 days |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Common Shares Used in Calculating Basic and Diluted Net Income (Loss) Per Common Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding (in shares) | 65 | 100 | 64.7 | 101.2 |
Dilutive effect of stock options and restricted stock awards (in shares) | 0 | 0 | 0 | 0 |
Weighted-average diluted common shares outstanding (in shares) | 65 | 100 | 64.7 | 101.2 |
Anti-dilutive stock options and restricted stock awards (in shares) | 3.7 | 2.5 | 3.7 | 2.5 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020USD ($)countryLocation | Aug. 03, 2019USD ($) | Aug. 01, 2020USD ($)Locationsegmentcountry | Aug. 03, 2019USD ($) | |
Segment Reporting Disclosure [Line Items] | ||||
Number of reportable segments | segment | 4 | |||
Number of countries in which the entity operates | country | 10 | 10 | ||
Net sales | $ | $ 942 | $ 1,285.7 | $ 1,963 | $ 2,833.4 |
Intersegment Eliminations | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | $ | $ 0 | $ 0 | $ 0 | $ 0 |
United States | ||||
Segment Reporting Disclosure [Line Items] | ||||
Number of states the entity operates | 50 | 50 | ||
Europe | ||||
Segment Reporting Disclosure [Line Items] | ||||
Number of countries in which the entity operates | 6 | 6 | ||
Europe | Retail and e-commerce | ||||
Segment Reporting Disclosure [Line Items] | ||||
Number of countries in which the entity operates | 10 | 10 |
Segment Information - Sales by
Segment Information - Sales by Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Segment Reporting Information [Line Items] | ||||
Net sales | $ 942 | $ 1,285.7 | $ 1,963 | $ 2,833.4 |
Operating (loss) earnings | (85.6) | (446.7) | (193.6) | (429.2) |
United States | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 584.2 | 880 | 1,344.8 | 2,023.2 |
Operating (loss) earnings | (71.7) | (414.1) | (122.8) | (361.9) |
Canada | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 41.9 | 63 | 81.6 | 135.6 |
Operating (loss) earnings | (0.7) | (7.1) | (10.1) | (12.4) |
Australia | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 149.1 | 121.2 | 262.8 | 222.8 |
Operating (loss) earnings | 11.6 | (2.2) | 11.1 | (10.4) |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 166.8 | 221.5 | 273.8 | 451.8 |
Operating (loss) earnings | $ (24.8) | $ (23.3) | $ (71.8) | $ (44.5) |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 01, 2020 | Aug. 03, 2019 | Aug. 01, 2020 | Aug. 03, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 17.9 | $ (40.1) | $ 68.3 | $ (37.8) |
Effective tax rate | (19.20%) | 8.80% | (32.90%) | 8.50% |
Valuation allowance recorded | $ 53 |
Subsequent Events (Details)
Subsequent Events (Details) | Sep. 01, 2020USD ($) | Aug. 28, 2020USD ($) | Aug. 12, 2020USD ($) | Aug. 31, 2021USD ($) | Feb. 14, 2021USD ($) | Aug. 01, 2020USD ($) |
Letter of Credit | Revolving credit facility due November 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 50,000,000 | |||||
Letter of Credit | Revolving Credit Facility Due November 2022, Permitted To Be Issued Separately | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | 25,000,000 | |||||
Revolving Credit Facility | Revolving credit facility due November 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Commitment or the borrowing base, amount | $ 30,000,000 | |||||
Lesser of the total commitment or the borrowing base, percentage | 10.00% | |||||
Forecast | Letter of Credit | Letter Of Credit Facility | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 75,000,000 | $ 150,000,000 | ||||
Subsequent Event | Letter of Credit | Revolving credit facility due November 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 100,000,000 | |||||
Subsequent Event | Letter of Credit | Revolving Credit Facility Due November 2022, Permitted To Be Issued By Borrowers And Guarantors | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | 150,000,000 | |||||
Subsequent Event | Letter of Credit | Revolving Credit Facility Due November 2022, Permitted To Be Issued For Foreign Subsidiaries | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, maximum borrowing capacity | $ 75,000,000 | |||||
Subsequent Event | Letter of Credit | Letter Of Credit Facility | ||||||
Subsequent Event [Line Items] | ||||||
Letters of credit cash collateralized, percentage | 103.00% | |||||
Line of credit facility, commitment fee percentage | 2.50% | |||||
Subsequent Event | Revolving Credit Facility | Revolving credit facility due November 2022 | ||||||
Subsequent Event [Line Items] | ||||||
Fixed charge coverage ratio | 1 | |||||
Commitment or the borrowing base, amount | $ 12,500,000 | |||||
Lesser of the total commitment or the borrowing base, percentage | 10.00% | |||||
Line of credit, maximum borrowing capacity | $ 275,000,000 | |||||
Subsequent Event | Australian Headquarters In Eagle Farm, Queensland | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from sale of property and equipment | $ 27,000,000 | |||||
Sale leaseback, lease terms | 10 years | |||||
Sale leaseback transaction, initial annual rent | $ 1,700,000 | |||||
Sale leaseback transaction, initial annual rent, percentage | 0.030 | |||||
Subsequent Event | Canadian Headquarters In Brampton, Ontario | ||||||
Subsequent Event [Line Items] | ||||||
Proceeds from sale of property and equipment | $ 16,700,000 | |||||
Sale leaseback, lease terms | 5 years | |||||
Sale leaseback transaction, initial annual rent | $ 900,000 |