Thank you, George. Good afternoon, everyone. I'd like to take this time to walk you through our first quarter fiscal 2020 results. I'll then share some insights into how we're approaching the remainder of the year.
As George just discussed, our number one priority is the health and safety of our associates, customers and communities during the COVID-19 pandemic. And as such in March, we temporarily closed approximately 76% of the company’s 1,802 international stores. On March 22, we temporarily closed all of our 3,526 U.S. locations, two-thirds of which were close to any direct customer access, but did conduct a limited curbside pickup offering leveraging our omnichannel buy online pick up in-store and ship-from-store capabilities.
During the remainder of the first quarter, approximately 10% of the global fleet which was primarily our Australian Business Unit remained fully opened and accessible to customers. Despite the impact of store closures around the world, our business in Q1 reflected three primary elements first, a surge in gaming and work from home products.
Secondly, the power of GameStop’s deep omnichannel engagement with its loyal customer base, and finally, the ability of our teams around the world to quickly adapt to meet increased product demand, despite the limited ability to meet face-to-face with our customers. In that light, for the first fiscal quarter, we delivered a global comp store sales decline of 17%. Consistent with other retailers, these results exclude the stores that were closed for longer than two contiguous weeks during the quarter.
Importantly, despite these closures and limited operations during the peak pandemic weeks, our global sales comp for fiscal March was a decline of 0.7% and April was a decline of 14.4%. In the fiscal month of May, we realized comp sales decline of approximately 4%.
As you can see in contrast to the fiscal fourth quarter last year, we believe the predominance of the sales decline so far this year is represented by the pandemic related store closures across all of our operating regions.
Turning back to the first quarter, total consolidated global sales declined 34% to $1.02 billion from $1.55 billion in the prior-year period. The overall sales decline was attributed to the reported comp store sales decline of 17%, approximately 13% from the impact of COVID-19 related fully closed stores and the remaining almost four percentage points attributable to permanently closed stores and foreign exchange headwinds.
As a reminder, these permanent store closures are a result of our ongoing efforts to either dedensify certain geographies or exit unprofitable businesses.
We continue to see strong sales and profit transfer rates from the dedensification strategy and are on track for the completion of the Nordics region wind down by the end of July.
In terms of category performance, hardware and accessories declined 21.8% for Q1, the vast majority of which was attributable to full store closures. Despite the decline in the overall category, Nintendo Switch continues to perform very well with sales in the quarter showing a material increase compared to the first quarter last year.
Software, particularly catalog and pre-owned as well as our collectibles tend to be Market Basket builders in-store. And as such, both of the software and collectibles categories each declined approximately 43% for the quarter, reflecting the customer's inability to access our storefronts. There were only a few new software titles that launched in the first quarter, including Animal Crossing, Final Fantasy VII and Doom Maternal, all of which far exceeded their sales plans. From a product margin standpoint, gross margin declined due to product mix with hardware sales representing approximately 50% of sales, a much larger penetration level as compared to 42% last year.
As a result, our overall global gross margins were 27.7% or a 270 basis point contraction from the more software led 30.4% in the fiscal first quarter last year.
Now turning to our expenses and expense management objectives. After adjusting for roughly $5.3 million in transformation, severance and other charges associated with our GameStop reboot profit improvement initiative, our SG&A expenses were $381.2 million, reflecting a decline of approximately $72.5 million or roughly 16% versus the first quarter last year.
Importantly, these results do not adjust for just over $21 million of one-time investments we made in the quarter related to COVID-19.
The first of which was approximately $18.5 million of incremental wages associated with our decision to pay an additional two weeks of pay or if eligible, two additional weeks of paid time-off to our hourly associates.
Secondly, we invested just over $3 million in safety and sanitary related products and equipment in the first quarter to ensure the safety of our associates and customers. We do anticipate some of the SG&A reductions to come back in future quarters as we return to more normalized operations of our stores and our distribution centers.
However, a significant portion of the reduction is also directly related to our ongoing efforts to aggressively rationalize the overall cost structure of the business.
As a result of the worldwide impact on our store operations, the COVID-19 pandemic, we realized an operating loss of $108 million compared to operating income of $17.5 million in the prior-year first quarter. Adjusted operating loss, excluding the transformation, severance and other charges was $98.8 million compared to the operating income of $17.5 million in the prior-year first quarter.
Importantly, again these results do not adjust for the over $21 million of one-time investments we made in the quarter that I mentioned a minute ago.
Our effective tax rate as reported for the first quarter was negative 43.9% and was impacted by certain discrete tax items primarily related to a $53 million valuation allowance on our deferred tax assets and the mix of earnings across the jurisdictions in which we operate.
Excluding the impact of the $53 million non-cash tax adjustment in the quarter, our adjusted effective tax rate for the quarter was 1.5%. On a reported basis, our net loss was $165.7 million which includes the $53 million non-cash charge or a loss of $2.57 per diluted share compared to net income of $6.8 million or earnings per diluted share of $0.07 in the prior-year first quarter. Adjusted net loss excluding the tax charge transformation, severance and other charges associated with GameStop reboot was $103.9 million or a loss of $1 61 per diluted share, compared to adjusted net income of $7.5 million or $0.07 per diluted share. Again, this net loss is not adjusted for the $21 million in incremental COVID-19 related costs mentioned before.
During the first quarter, we continue to focus on optimizing our global store fleet and strategically dedensifying certain markets.
For the quarter we closed a net total of 181 stores.
As we told you in March, we expect our strategic market optimization efforts to result in a similar number of store closures in 2020 as compared to 2019, or roughly 320 stores.
However, given the positive sales and profit transfer rates we continue to see, we’re revising that estimate upwards by roughly 100 additional closures.
Now turning to the balance sheet, at the end of the fiscal first quarter, we had total cash of $570.3 million including $135 million drawn on the revolver. Subsequently, given the relatively stronger performance of the business, we paid down $35 million to revolver and had $100 million outstanding as of June 3.
Our accounts payable at the end of the quarter were $212 million, down from $458.4 million at the end of the first quarter of fiscal 2019 reflecting a 54% reduction, which is directly related to our ability to leverage a flexible supply chain and reduced purchase orders around the world at the very onset of the viral pandemic, thus not creating a liability drag on the business or on cash flows. We ended the first quarter with total inventory of $654.7 million compared to $1.15 billion in the prior-year period, a reduction of 43%.
As we have said, effective and efficient inventory management, including improved inventory turns continues to be a significant area of focus for us and is a key driver of the further improvement in working capital efficacy. We're very pleased with the continued progress we're making with regards to working capital, and specifically the improvement on the efficiency of the cash conversion cycle on our inventory, which is reflected in both the 43% and 54% decline in inventory and accounts payable respectively all while meaning maintaining a strong cash position of over $570 million in total cash and equivalents. This disciplined management of inventory working capital continues to manifest itself in the balance sheet and is key to providing us the necessary liquidity and financial flexibility to manage the current environment as well as support the upcoming inventory investments in new software titles and new generation of consoles and the associated accessories upcoming in the third and fourth quarter. Due to the ongoing potential impacts of the COVID-19 crisis, as is consistent across the retail industry, we continue to suspend our forward guidance.
However, we do believe that our efforts to maintain the strength of our balance sheet will continue for the long-term.
As an indication of that, we expect our total cash and equivalents at the end of the second fiscal quarter, to be in the range of $575 million to $625 million reflecting roughly flat to positive cash flow from operations.
As of May 2, the end of the fiscal quarter we had $417.2 million of our outstanding notes on the balance sheet. In keeping with our objectives to maintain a strong and healthy balance sheet last week on June 4th, we announced the commencement of an exchange offer to certain holders of the remaining balance of the $414.6 million of our 6.75% senior notes, which are due in 2021. This offering is intended to provide us with even further financial flexibility by replacing and extending the maturity of the existing notes that are validly tendered as we continue to focus on advancing our long-term strategy and objectives. Further to our goals of maintaining a strong balance sheet on June 5, we completed the sale of our corporate jet and continue to work to efficiently monetize certain other real property assets of the business. In the first quarter, we had $6.6 million of capital expenditures. It's important to note that we have lowered capital spending to focus on mandatory maintenance or near-term high value strategic projects and now expect to invest approximately $43 million in CapEx for the year, a significant reduction from the roughly $80 million spent in 2019.
As I mentioned before, we have generally suspended guidance as a result of the COVID-19 impact on our business.
However, it's important to note that in addition to the second quarter cash expectations I shared earlier, we do believe that three things one, our performance during the peak of the pandemic, two our current trajectory, and three our expectations for the back half of the year console launch will all contribute to generate positive adjusted EBITDA for the fiscal year. We remain confident that the progress against our GameStop reboot objectives is providing the key support for us to navigate this trying and unusual time. We remain intensely focused on continuing to execute actions to further strengthen our overall financial architecture, including all key profit and expense levers that will result in an organization that is efficient, streamlined, and poised to capitalize on a significant profit flow through improvement as we experienced expected robust sales growth in late 2020 led by both the expected new software title slate and the Generation 9 console launch. I will now turn the call over to the operator and we'll take any questions that you may have.