LONDON, UK / ACCESSWIRE / September 15, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on GameStop Corp. (NYSE: GME), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=GME, following the Company's announcement of its financial results on August 24, 2017, for the second quarter fiscal 2017 (Q2 FY17). The Grapevine, Texas-based Company reported a 3.4% y-o-y growth in its total global sales, outperforming market consensus estimates. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
During the three months ended July 29, 2017, GameStop recorded net sales of $1.69 billion, compared to $1.63 billion recorded at the end of Q2 FY16. Net sales numbers topped market expectations of $1.62 billion. The Company attributed the growth in net sales to continued strong demand for Nintendo Switch and Collectibles.
The video game retailer reported net income of $22.2 million, or $0.22 per diluted share, in Q2 FY17 compared to $27.9 million, or $0.27 per diluted share, in the prior year's same period. Meanwhile, the Company's adjusted net income came in at $14.9 million, or $0.15 per diluted share, for the reported quarter versus $27.9 million, or $0.27 per diluted share, in the past year's comparable quarter. Meanwhile, Wall Street had expected the Company to report adjusted net income of $0.16 per diluted share.
Operating Metrics
In the reported quarter, GameStop's profit came in at $623.7 million, or 37.0% of net sales, versus $617.7 million, or 37.9% of net sales, in the year ago comparable period. The Company's operating earnings stood at $43.6 million, or 2.6% of net sales, for Q2 FY17 versus $58.3 million, or 3.6% of net sales, in the first quarter of FY16.
Segment-Performance
The Company's New Video Game Hardware segment's net sales grew from $216.4 million in Q2 FY16 to $248.4 million in the reported quarter. However, the segment's gross profit fell to $26.7 million, or 10.7% of the segment's net sales, in Q2 FY17 from $30.0 million, or 13.9% of the segment's net sales, in Q2 FY16.
During Q2 FY17, New Video Game Software segment reported net sales of $369.3 million compared to $382.2 million recorded in the prior year's same quarter. Meanwhile, the segment's gross profit came in at $81.8 million, or 22.2% of the segment's net sales, in Q2 FY17 compared to $98.1 million, or 25.7% of the segment's net sales, in Q2 FY16.
GameStop's Pre-owned and Value Video Game Products segment's net sales were $501.8 million in Q2 FY17, which came in below the $542.6 million reported in Q2 FY16. Moreover, the segment's gross profit for the reported quarter was $225.6 million, or 45.0% of net sales, compared to $244.0 million, or 45.0% of net sales, in the previous year's corresponding quarter.
Video Game Accessories segment's net sales increased from $119.5 million in Q2 FY16 to $144.1 million in Q2 FY17. Additionally, the segment's gross profit also rose to $47.7 million, or 33.1% of the segment's net sales, in Q2 FY17 from $45.7 million, or 38.2% of the segment's net sales, in the year-ago same period.
The Company's Digital segment's net sales came in at $46.5 million for the reported quarter versus $36.3 million in Q2 FY16. The segment's gross profit was $37.9 million, or 81.5% of the segment's net sales, for Q2 FY17 versus $32.7 million, or 62.9% of the segment's net sales, in the year ago same quarter.
Technology Brands segment reported net sales of $188.3 million in Q2 FY17, up from $175.9 million in the last year's same period. The segment's gross profit also grew to $138.9 million, or 73.8% of the segment's net sales, in Q2 FY17 from $110.7 million, or 62.9% of the segment's net sales, in Q2 FY16.
In Q2 FY17, Collectibles segment's net sales were $122.5 million versus $90.0 million in Q2 FY16. The segment posted a gross profit of $43.2 million, or 35.3% of the segment's net sales, in Q2 FY17, which came in above $34.7 million, or 38.6% of the segment's net sales, in Q2 FY16.
Cash Flow & Balance
During the first half of FY17, GameStop's net cash flow used in operating activities was $311.7 million compared to net cash flow used in operating activities of $436.2 million in the year ago period. At the close of books on July 29, 2017, GameStop had cash and cash equivalents balance of $262.1 million versus $669.4 million at the close of books on January 28, 2017. Additionally, the Company's long-term debt stood at $816.4 million as on July 29, 2017, compared to $815.0 million as on January 28, 2017
Dividend
On August 21, 2017, GameStop's Board of Directors declared a quarterly cash dividend of $0.38 per common share payable on September 21, 2017, to shareholders of record as of the close of business on September 08, 2017.
Earnings Guidance
GameStop reiterated its full year FY17 diluted earnings per share guidance range of $3.10 to $3.40 and comparable store sales range of negative 5.0% to 0.0%.
Stock Performance
At the close of trading session on Thursday, September 14, 2017, GameStop's stock price rose slightly by 0.30% to end the day at $20.08. A total volume of 1.92 million shares were exchanged during the session. The Company's shares are trading at a PE ratio of 6.04 and have a dividend yield of 7.57%. At Thursday's closing price, the stock's net capitalization stands at $2.00 billion.
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