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What changed in GameStop Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GameStop Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+233 added−184 removedSource: 10-K (2025-03-25) vs 10-K (2024-03-26)

Top changes in GameStop Corp.'s 2025 10-K

233 paragraphs added · 184 removed · 145 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAlabama 47 Louisiana 53 Ohio 137 Alaska 5 Maine 7 Oklahoma 36 Arizona 59 Maryland 52 Oregon 31 Arkansas 23 Massachusetts 49 Pennsylvania 124 California 262 Michigan 82 Rhode Island 8 Colorado 46 Minnesota 34 South Carolina 62 Connecticut 28 Mississippi 37 South Dakota 5 Delaware 12 Missouri 53 Tennessee 77 Florida 189 Montana 9 Texas 298 Georgia 102 Nebraska 17 Utah 23 Hawaii 11 Nevada 32 Vermont 4 Idaho 15 New Hampshire 20 Virginia 94 Illinois 99 New Jersey 73 Washington 62 Indiana 71 New Mexico 22 West Virginia 23 Iowa 23 New York 140 Wisconsin 42 Kansas 27 North Carolina 117 Wyoming 5 Kentucky 61 North Dakota 7 Total Domestic Stores 2,915 International Locations.
Biggest changeAlabama 37 Louisiana 46 Ohio 97 Alaska 4 Maine 7 Oklahoma 27 Arizona 54 Maryland 42 Oregon 28 Arkansas 17 Massachusetts 36 Pennsylvania 102 California 202 Michigan 62 Rhode Island 6 Colorado 37 Minnesota 26 South Carolina 49 Connecticut 20 Mississippi 27 South Dakota 4 Delaware 11 Missouri 45 Tennessee 60 Florida 149 Montana 8 Texas 256 Georgia 84 Nebraska 9 Utah 20 Hawaii 8 Nevada 27 Vermont 3 Idaho 14 New Hampshire 16 Virginia 71 Illinois 73 New Jersey 54 Washington 52 Indiana 55 New Mexico 18 West Virginia 19 Iowa 20 New York 102 Wisconsin 36 Kansas 21 North Carolina 102 Wyoming 4 Kentucky 51 North Dakota 7 Total Domestic Stores 2,325 International Locations.
The table below sets forth the number and locations of our international stores included in our segments in Canada, Europe and Australia.
The table below sets forth the number and locations of our international stores included in our segments in Canada, Australia, and Europe.
We have established certain rights with our primary gaming product vendors that reduce our risk of inventory obsolescence, including, in some circumstances, unsold product return policies and protections against price reductions. In addition, we generally conduct business on an order-by-order basis, a practice that is typical throughout the industry.
We have established certain rights with our primary gaming product vendors that reduce our risk of inventory obsolescence, including, in some circumstances, unsold product return policies and protections against price 4 reductions. In addition, we generally conduct business on an order-by-order basis, a practice that is typical throughout the industry.
Patent and Trademark Office. For many of our trademarks and service marks, including “Micromania ® ” and "Zing Pop Culture ® ," we also have registered or have registrations pending with the trademark authorities throughout the world. We maintain a policy of pursuing registration of our principal marks and opposing any infringement of our marks.
For many of our trademarks and service marks, including “Micromania ® ” and "Zing Pop Culture ® ," we also have registered or have registrations pending with the trademark authorities throughout the world. We maintain a policy of pursuing registration of our principal marks and opposing any infringement of our marks.
The contents of our corporate website are not part of this Annual Report on Form 10-K, or any other report we file with, or furnish to, the SEC. 5
The contents of our corporate website are not part of this Annual Report on Form 10-K, or any other report we file with, or furnish to, the SEC. 6
Fiscal year 2023 consisted of the 53 weeks ended on February 3, 2024 ("fiscal 2023"). Fiscal year 2022 consisted of the 52 weeks ended on January 28, 2023 ("fiscal 2022") and fiscal year 2021 consisted of the 52 weeks ended on January 29, 2022 ("fiscal 2021"). Reportable Segments We operate in four geographic segments: United States, Canada, Australia and Europe.
Fiscal year 2024 consisted of the 52 weeks ended on February 1, 2025 ("fiscal 2024"). Fiscal year 2023 consisted of the 53 weeks ended on February 3, 2024 ("fiscal 2023") and fiscal year 2022 consisted of the 52 weeks ended on January 28, 2023 ("fiscal 2022"). Reportable Segments We operate in four geographic segments: United States, Canada, Australia and Europe.
As of February 3, 2024, we offered games and entertainment products in 4,169 stores worldwide as more specifically set forth below: Domestic Locations. The table below sets forth the number and locations of our domestic stores included in the United States segment.
As of February 1, 2025, we offered games and entertainment products in 3,203 stores worldwide as more specifically set forth below: Domestic Locations. The table below sets forth the number and locations of our domestic stores included in the United States segment.
(“Walmart”), Target Corporation (“Target”), Best Buy Co., Inc. ("Best Buy") and Amazon.com, Inc. (“Amazon.com”), among others. Throughout Europe we compete with major consumer electronics retailers such as FNAC-Darty and Media Markt-Saturn, major hypermarket chains like Carrefour and Auchan, and online retailer Amazon.com. Competitors in Canada include Walmart and Best Buy.
(“Walmart”), Target Corporation (“Target”), Best Buy Co., Inc. ("Best Buy") and Amazon.com, Inc. (“Amazon.com”), among others. Throughout Europe we compete with major consumer electronics retailers such as FNAC-Darty, major hypermarket chains like Leclerc , and online retailer Amazon.com. Competitors in Canada include Walmart and Best Buy. In Australia, competitors include JB HiFi stores, Big W, Target and Amazon.com.
During fiscal 2023 and 2022, we generated approximately 34% and 38%, respectively, of our sales during the fourth quarter. 4 Trademarks We have a number of trademarks and service marks, including “GameStop ® ,” “Game Informer ® ,” “EB Games ® ,” “EB Electronics Boutique ® ," and “GameStop Pro ® ," which are registered with the U.S.
We generated approximately 34% of our sales during the fourth quarter of each of fiscal 2024 and 2023. Trademarks We have a number of trademarks and service marks, including “GameStop ® ,” “EB Games ® ,” “EB Electronics Boutique ® ," and “GameStop Pro ® ," which are registered with the U.S. Patent and Trademark Office.
As of February 3, 2024, we had a total of 4,169 stores across all of our segments: 2,915 in the United States, 203 in Canada, 404 in Australia, and 647 in Europe. Our stores and ecommerce sites operate primarily under the names GameStop ® , EB Games ® and Micromania ® .
As of February 1, 2025, we had a total of 3,203 stores across all of our segments: 2,325 in the United States, 193 in Canada, 374 in Australia, and 311 in Europe. Our stores and ecommerce sites operate primarily under the names GameStop ® , EB Games ® and Micromania ® .
In addition to copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, our Code of Standards, Ethics and Conduct is available on our website under “Investors — Corporate Governance” and is available to our stockholders in print, free of charge, upon written request to the Investor Relations Department at GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051.
In addition, our Code of Standards, Ethics and Conduct is available on our website under “Corporate Governance” and is available to our stockholders in print, free of charge, upon written request to the Investor Relations Department at GameStop Corp., 625 Westport Parkway, Grapevine, Texas 76051.
Quarterly results may fluctuate materially depending upon, among other factors, the timing of new product introductions, adverse weather conditions, shifts in the timing of certain holidays or promotions and changes in our merchandise mix.
Results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. Quarterly results may fluctuate materially depending upon, among other factors, the timing of new product introductions, adverse weather conditions, shifts in the timing of certain holidays or promotions and changes in our merchandise mix.
Our Australia and Europe segments also include 49 pop culture themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture ® brand. Our brands also include our print and digital gaming publication, Game Informer ® magazine.
Our Australia and Europe segments also i nclude 38 pop cu lture themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture ® brand.
Our strategic plan is designed to optimize our core business and achieve profitability. GameStop is actively focused on the below objectives: • Establish Omnichannel Retail Excellence. We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms.
Retail Business GameStop is actively focused on the below objectives: • Establish Omnichannel Retail Excellence . We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms. • Achieve Profitability . During fiscal 2024, we continued to optimize our cost structure to align with our current and anticipated future needs.
Human Capital At GameStop, we strive to attract, retain and develop talent at all levels of our organization. We have approximately 8,000 full-time salaried and hourly associates and between 13,000 and 18,000 part-time, hourly associates worldwide, depending on the time of year. The number of part-time hourly associates fluctuates primarily due to the seasonality of our business.
Human Capital At GameStop, we strive to attract, retain and develop talent at all levels of our organization. We have approximately 6,000 full-time salaried and hourly associates and between 10,000 and 13,000 part-time, hourly associates worldwide, depending on the time of year. Our human resource philosophy is based on the following tenets: • Development.
We believe a more collaborative workforce provides many benefits in drawing upon a greater richness of resources, experiences, ideas and talents. • Benefits. We have designed our compensation and benefits programs to meet the unique needs of employees in our various business segments.
We have designed our compensation and benefits programs to meet the unique needs of employees in our various business segments.
The SEC also maintains a website that contains reports, proxy statements and other information about issuers, like GameStop, who file electronically with the SEC. The address of that site is http://www.sec.gov.
These programs are intended to attract, reward and retain talent, while instilling an ownership mentality in our work. 5 Available Information The SEC maintains a website that contains reports, proxy statements and other information about issuers, like GameStop, who file electronically with the Securities and Exchange Commission (the "SEC"). The address of that site is http://www.sec.gov.
Seasonality Our business, like that of many retailers, is seasonal, with the major portion of sales and operating profit realized during the fourth quarter of the fiscal year, which includes the holiday selling season. Results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.
Globally, we also compete with certain vendors, including Sony, Nintendo and Microsoft among others, for direct-to-consumer offerings. Seasonality Our business, like that of many retailers, is seasonal, with the major portion of sales and operating profit realized during the fourth quarter of the fiscal year, which includes the holiday selling season.
We believe these efforts are important aspects of our continued business to enable long-term value creation for our shareholders. Vendors We purchase our new products worldwide from a broad number of manufacturers, software publishers and distributors. Our largest vendors are Sony, Nintendo, and Microsoft, which collectively accounted for a majority of our new product purchases in fiscal 2023.
Expansion of these categories provides the Company with margin accretive opportunities that can assist the Company in achieving its profitability goals. Vendors We purchase our new products worldwide from a broad number of manufacturers, software publishers and distributors. Our largest vendors are Sony, Nintendo, and Microsoft, which collectively accounted for a majority of our new product purchases in fiscal 2024.
Our trade-in program provides customers a means to unlock value and recycle used product, which enables us to offer previous generation platforms and related games. We operate refurbishment centers in the United States, Canada, Australia and Europe, where used gaming, mobility and other products can be tested, repaired, sanitized, repackaged and redistributed for sale.
Our trade-in program provides customers a means to unlock value and recycle used product, which enables us to offer previous generation platforms and related games.
Our human resource philosophy is based on the following tenets: • Development. We are committed to providing our associates with opportunities to develop and grow their careers. We offer learning opportunities through our training programs, as well as educational assistance programs. • Collaboration. We advocate working actively to build understanding and collaboration across functions.
We are committed to providing our associates with opportunities to develop and grow their careers. We offer learning opportunities through our training programs. • Collaboration. We advocate working actively to build understanding and collaboration across functions. We believe a more collaborative workforce provides many benefits in drawing upon a greater richness of resources, experiences, ideas and talents. • Benefits.
Available Information We make available on our corporate website (http://news.gamestop.com), under “Investors — SEC Filings,” our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such material to the Securities and Exchange Commission ("SEC").
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports can be accessed through that website and also indirectly through our corporate website (http://news.gamestop.com).
In 2023, we achieved a reduction in year-over-year carbon emissions in excess of 10% in the United States through both operational reductions and renewable sourcing. 2 Store Locations Our retail stores are generally located in strip centers, shopping malls and pedestrian areas.
We operate refurbishment centers in the United States, Canada, Australia and Europe, where used gaming, mobility and other products can be tested, repaired, sanitized, repackaged and redistributed for sale. 2 Store Locations Our retail stores are generally located in strip centers, shopping malls and pedestrian areas.
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Sustainability We are committed to sustainability and to operating our business in a manner that results in a positive impact to the environment and our communities. Through our trade-in program, we take pre-owned gaming consoles, gaming software and consumer electronics that are otherwise destined for landfills and either refurbish them or recycle them.
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Number of Stores Canada 193 Australia 336 New Zealand 38 Total Stores - Australia 374 France 311 Total International Stores 878 3 Business Strategy Our strategy involves (i) using our cash and other sources of liquidity to maximize shareholder value, including through potential investment and/or acquisition opportunities and (ii) optimizing our retail business to achieve profitability.
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In 2023 alone, through our U.S. refurbishment center, we refurbished over 1.1 million software discs and over 3.0 million consumer electronic devices, and recycled over 0.6 million pounds of e-waste.
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Investment Policy On March 18, 2025, the Board of Directors of the Company (the "Board") unanimously authorized a revised investment policy (the “Investment Policy”).
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In addition, we continuously measure and look for cost-effective ways to reduce our carbon emissions and have seen both our total emissions and emissions by store decrease in the United States over our baseline year of 2009.
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In accordance with the revised Investment Policy, the Board has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee of the Board (the "Investment Committee") consisting of the Company’s Chairman of the Board and Chief Executive Officer, Ryan Cohen, and two independent members of the Board, together with such personnel and advisors as the Investment Committee may choose.
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Number of Stores Canada 203 Total Stores - Canada 203 Australia 365 New Zealand 39 Total Stores - Australia 404 France 314 Germany 69 Italy 264 Total Stores - Europe 647 Total International Stores 1,254 3 Business Strategy GameStop is following a strategic plan to fully leverage its unique position and brand recognition in gaming through a new phase of transformation.
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The Investment Committee regularly reviews risks related to the Company's investment portfolio, including concentration risk. When allocating cash to various investment opportunities and considering related investment risk, the Investment Committee considers market-based factors, including risk adjusted after-tax yields. When reviewing concentration risk, the Investment Committee considers the liquidity needs of the Company, among other things.
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To accomplish this, we are taking steps to ensure we are a fast and convenient solution for our customers. This includes increased product availability across all channels, faster fulfillment through ship from store offerings, and a further improved customer service experience. • Achieve Profitability.
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Investments are made in accordance with the guidelines in the Investment Policy that is reviewed at least annually, with oversight conducted by senior officers and the Investment Committee.
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During fiscal 2023, we continued to optimize our cost structure to align with our current and anticipated future needs. We will continue to focus on cost containment as we look to operate with increased efficiency. • Leverage Brand Equity to Support Growth. GameStop has many strengths and assets, including strong household brand recognition and a significant store network.
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The overall goals of the Investment Policy are to provide sufficient liquidity to meet the day-to-day financial obligations of the Company, and to optimize investment returns within the guidelines of the Investment Policy. Permissible investment instruments include cash and cash equivalents (e.g. bank obligations, money market funds, and commercial paper), fixed income securities (e.g. obligations of the U.S.
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In Australia, competitors include JB HiFi stores, Big W, Target and Amazon.com. Globally, we also compete with certain vendors, including Sony, Nintendo and Microsoft among others, for direct-to-consumer offerings.
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Treasury and U.S. Government, tax exempt obligations of states and municipalities, and corporate bonds/notes), equity securities (limited to those listed on the New York Stock Exchange (“NYSE”), NYSE American, NYSE Arca or the Nasdaq Stock Market and in compliance with the listing standards of the applicable exchange) and certain crypto-currencies, including Bitcoin.
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These programs are intended to attract, reward and retain talent, while instilling an ownership mentality in our work. We are also committed to taking care of our associates in times of need.
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Individual exceptions to the Investment Policy may only be made by the unanimous agreement of the Investment Committee or, if the Investment Committee is unable to reach unanimous agreement on such exception, by the Board.
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Through our Gamer Fund employee assistance program, an employee sponsored 501(c)(3) organization, we have provided temporary assistance to approximately 4,000 GameStop associates who have experienced unforeseen emergency or hardship, and more than $0.8 million in scholarships.
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On March 25, 2025 we announced that, as part of our revisions to the Investment Policy, the Board approved the addition of Bitcoin as a treasury reserve asset, whereby a portion of our cash or future debt and equity issuances may be invested in Bitcoin.
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We have not set a maximum amount of Bitcoin we may accumulate, and may sell any Bitcoin we may acquire. The Investment Committee will direct the investment activity of the Company in public and private markets pursuant to authority granted by the Board. Depending on certain market conditions and various risk factors, Mr.
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Cohen or other members of the Investment Committee, each in their personal capacity or through affiliated investment vehicles, may at times invest in the same securities in which the Company invests.
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The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company.
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We will continue to focus on cost containment as we look to operate with increased efficiency. • Expand Our Addressable Market. We continue to explore ways to increase the size of our addressable market through new product and service offerings, including offerings in the graded collectibles category.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese factors include, but are not limited to: • the timing and allocations of new product releases including new console launches; • the amounts devoted to strategic investments, including in multi-channel capabilities and other business initiatives, and failure to achieve anticipated profitability and benefits from such initiatives within the expected time-frames, or at all; • the timing and extent of the achievement of anticipated profits from investments, if at all; • shifts in the timing or content of certain promotions or service offerings; • the effect of changes in tax rates in the jurisdictions in which we operate; • the mix of earnings in the countries in which we operate; • the costs associated with the exit of unprofitable markets, businesses or stores; and • changes in foreign currency exchange rates.
Biggest changeThese factors include, but are not limited to: 16 • the timing and allocations of new product releases including new console launches; • the amounts devoted to strategic investments and failure to achieve anticipated profitability and benefits from such initiatives within the expected time-frames, or at all; • the timing and extent of the achievement of anticipated profits from investments, if at all; • to the extent we acquire and hold significant amounts of Bitcoin or U.S.
These and other external factors have caused and may continue to cause the market price and demand for our Class A Common Stock to fluctuate substantially, which may limit or prevent our stockholders from readily selling their shares of our common stock and may otherwise negatively affect the liquidity of our Class A Common Stock.
These and other external factors have caused and may continue to cause the market price and demand for our Class A Common Stock to fluctuate substantially, which may limit or prevent our stockholders from readily selling their shares of our Class A Common Stock and may otherwise negatively affect the liquidity of our Class A Common Stock.
In addition, changes in the regulatory environment affecting Medicare reimbursements, workplace safety, product safety, privacy and security of customer data, responsible sourcing, environmental protection, supply chain transparency, and increased compliance costs related to wage and hour statutes, limitations on arbitration/class action 10 waiver agreements and overtime regulations, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices.
In addition, changes in the regulatory environment affecting Medicare reimbursements, workplace safety, product safety, privacy and security of customer data, responsible sourcing, environmental protection, supply chain transparency, and increased compliance costs related to wage and hour statutes, limitations on arbitration/class action waiver agreements and overtime regulations, among others, could cause our expenses to increase without an ability to pass through any increased expenses through higher prices.
A change in the mix of our business from year to year and from country to country, changes in rules related to accounting for income taxes, changes in tax laws in any of the multiple jurisdictions in which we operate, or adverse outcomes from the tax audits that regularly are in process in any jurisdiction in which we operate could result in an unfavorable change in our overall tax rate, which could have a material adverse impact on our business and results of our operations.
A change in the mix of our business from year to year and from country to country, changes in rules related to accounting for income taxes, changes in tax laws in any of the jurisdictions in which we operate, or adverse outcomes from the tax audits that regularly are in process in any jurisdiction in which we operate could result in an unfavorable change in our overall tax rate, which could have a material adverse impact on our business and results of our operations.
Stockholders that purchase shares of our Class A Common Stock during a short squeeze may lose a significant portion of their investment. 12 Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate.
Stockholders that purchase shares of our Class A Common Stock during a short squeeze may lose a significant portion of their investment. Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate.
Changing carriers could have a negative effect on our business and operating results due to the negative impact on customer experience, including reduced visibility of order status and 9 package tracking and delays in order processing and product delivery, and we may be unable to engage alternative carriers on a timely basis, upon terms favorable to us, or at all.
Changing carriers could have a negative effect on our business and operating results due to the negative impact on customer experience, including reduced visibility of order status and package tracking and delays in order processing and product delivery, and we may be unable to engage alternative carriers on a timely basis, upon terms favorable to us, or at all.
If consumers’ preference for downloading video game content in lieu of physical software continues to increase, our business and financial performance may be adversely impacted. In addition, both Sony and Microsoft currently offer consoles that only allow for the purchase of digital games and content and do not work with physical software.
If consumers’ preference for downloading video game content in lieu of physical software continues to increase, our business and financial performance may be adversely impacted. 9 In addition, both Sony and Microsoft currently offer consoles that only allow for the purchase of digital games and content and do not work with physical software.
Insufficient, untimely or inadequately prioritized or ineffectively implemented investments could significantly impact our profitability and growth and affect our ability to attract new customers, as well as maintain our existing ones. If we fail to keep pace with changing industry technology and consumer preferences, we will be at a competitive disadvantage.
Insufficient, untimely or inadequately prioritized or ineffectively implemented investments could significantly impact our profitability and growth and affect our ability to attract new customers, as well as maintain our existing ones. 10 If we fail to keep pace with changing industry technology and consumer preferences, we will be at a competitive disadvantage.
Sales of our products involve discretionary spending by consumers, making our results highly dependent on the health of the economies and consumer confidence in the markets in which we operate. Consumers are typically more likely to make discretionary purchases, including purchasing gaming and technology products, when there are favorable economic conditions.
Sales of our products involve discretionary spending by consumers, making our results highly dependent on the health of the economies and consumer confidence in the markets in which we operate. Consumers are typically more likely to make 8 discretionary purchases, including purchasing gaming and technology products, when there are favorable economic conditions.
Risks Related to Laws and Regulations Unfavorable changes in our global tax rate could have a negative impact on our business, results of operations and cash flows. As a result of our operations in many foreign countries, our global tax rate is derived from a combination of applicable tax rates in the various jurisdictions in which we operate.
Risks Related to Laws and Regulations Unfavorable changes in our global tax rate could have a negative impact on our business, results of operations and cash flows. As a result of our operations in foreign countries, our global tax rate is derived from a combination of applicable tax rates in the various jurisdictions in which we operate.
We seek to mitigate our exposure to these disruptions in several ways. For example, where feasible, we design the configuration of our logistics facilities to reduce the consequences of disasters and other disruptions. We also maintain insurance for these facilities against casualties, and we evaluate our risks and develop contingency plans for dealing with them.
We seek to mitigate our exposure to disruptions in several ways. For example, where feasible, we design the configuration of our logistics operations to reduce the consequences of disasters and other disruptions. We also maintain insurance for these facilities against casualties, and we evaluate our risks and develop contingency plans for dealing with them.
While we take steps to comply with these laws, there can be no assurance that we will be in compliance, and failure to comply with these laws could result in litigation, regulatory action and penalties which could have a negative impact on our business and financial condition.
While we take steps to comply with these laws, there can be no assurance that we will be in compliance, and failure to comply with these laws 14 could result in litigation, regulatory action and penalties which could have a negative impact on our business and financial condition.
Under accounting rules, changes in the unrealized gains and losses on certain of our securities may be included in the Company’s reported net income (loss), even though the Company has not actually realized any gain or loss by selling such securities.
Under accounting rules, changes in the unrealized gains and losses on certain of our investments may be included in the Company’s reported net income (loss), even though the Company has not actually realized any gain or loss by selling such securities.
The Company may invest from time to time in nonmarketable securities and may need to hold such instruments for a long period of time and may not be able to realize a return of its cash investment should there be a need to liquidate to obtain cash at any given time.
The Company may also invest from time to time in nonmarketable securities and may need to hold such instruments for a long period of time and may not be able to realize a return of its cash investment should there be a need to liquidate to obtain cash at any given time.
In particular, a large proportion of our Class A Common Stock has been and may continue to be traded by short sellers which has put and may continue to put pressure on the supply and demand for our Class A Common Stock, further influencing volatility in its market price.
In particular, a large proportion of our Class A Common Stock has been and may continue to be traded by short sellers which has put and may continue to put pressure on the supply and demand for our Class A Common Stock, further influencing volatility in its 15 market price.
If our vendors fail to provide marketing and merchandising support at historical levels, our sales and earnings could be negatively impacted. The manufacturers of gaming products have typically provided retailers with significant marketing and merchandising support for their products.
If our vendors fail to provide marketing and merchandising support at historical levels, our sales and earnings could be negatively impacted. 13 The manufacturers of gaming products have typically provided retailers with significant marketing and merchandising support for their products.
Economic and Industry Risks Economic, social and political conditions in the markets in which we operate could adversely affect demand for the products we sell and impact our business and financial condition.
Retail Industry Risks Economic, social and political conditions in the markets in which we operate could adversely affect demand for the products we sell and impact our business and financial condition.
Any negative publicity relating to our vendors, products, associates and Board members or practices could damage our reputation and adversely impact our ability to attract and retain customers and employees.
Any negative publicity relating to our vendors, products, associates and members of our Board or practices could damage our reputation and adversely impact our ability to attract and retain customers and employees.
The Company is required to recognize losses in a particular security for financial statement purposes even though the Company has not actually sold the security.
The Company is required to recognize losses in a particular investment for financial statement purposes even though the Company has not actually sold the security.
Operating an ecommerce platform is a complex undertaking and exposes us to risks and difficulties frequently experienced by internet-based businesses, including risks related to our ability to attract and retain customers on a cost-effective basis and our ability to operate, support, expand and develop our internet operations, website, mobile applications and software and other related operational systems.
Operating an ecommerce platform is a complex undertaking and exposes us to risks and difficulties frequently experienced by internet-based businesses, including risks related to our ability to attract and retain customers on a cost-effective basis and our ability to operate and support our internet operations, website, mobile applications and other related operational systems.
As part of our strategic plan to achieve profitability, we have recently undertaken cost reduction measures and other initiatives to improve the efficiency of our operations, including initiatives to reduce headcount. These initiatives could strain our existing resources, and we could experience operating difficulties in managing our business, including difficulties in hiring, managing and retaining employees.
As part of our strategic plan, we have undertaken cost reduction measures and other initiatives to improve the efficiency of our operations, including initiatives to reduce headcount. These initiatives could strain our existing resources, and we could experience operating difficulties in managing our business, including difficulties in hiring, managing and retaining employees.
Any material delay in the introduction or delivery, or limited allocations, of hardware platforms or software titles could result in reduced sales. In addition, some publishers that have historically published games compatible with multiple gaming 6 platforms have recently been acquired by console manufacturers.
Any material delay in the introduction or delivery, or limited allocations, of hardware platforms, collectibles or software titles could result in reduced sales. In addition, some publishers that have historically published games compatible with multiple gaming platforms have been acquired by console manufacturers.
If we are not able to successfully operate our ecommerce platform, we may not be able to provide a positive shopping experience or improve customer traffic, sales or margins, and our business and financial condition could be adversely affected. 7 In-store and ecommerce retail are competitive and evolving environments.
If we are not able to successfully operate our ecommerce platform, we may not be able to provide a positive shopping experience or maintain customer traffic, sales or margins, and our business and financial condition could be adversely affected. In-store and ecommerce retail are competitive and evolving environments.
The market price of our common stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may be beyond our control.
The market price of our Class A Common Stock has fluctuated, and may continue to fluctuate, widely, due to many factors, some of which may be beyond our control.
We compete with mass merchants and regional chains, including Walmart and Target, computer product and consumer electronics stores, including Best Buy, other United States and international gaming and PC software specialty stores, such as FNAC Darty, and Media Markt-Saturn, major hypermarket chains like Carrefour and Auchan, toy retail chains, internet-based retailers such as Amazon.com, other internet marketplaces, including those operated by game publishers and console manufacturers, online retailers of digital software and game rental companies.
We compete with mass merchants and regional chains, including Walmart and Target, computer product and consumer electronics stores, including Best Buy, other United States and international gaming and PC software specialty stores, such as FNAC Darty, and Media Markt-Saturn, major hypermarket chains like Leclerc, toy retail chains, internet-based retailers such as Amazon.com, other internet marketplaces, including those operated by game publishers and console manufacturers, online retailers of digital software, game rental companies and collectibles and trading card retailers.
An adverse trend in sales during the holiday selling season could impact our financial results. Our business, like that of many retailers, is seasonal, with a major portion of our sales and operating profit realized during the fourth quarter of fiscal 2023, which includes the holiday selling season.
An adverse trend in sales during the holiday selling season could impact our financial results. Our business, like that of many retailers, is seasonal, with a major portion of our sales and operating profit realized during the fourth quarter of each year, which includes the holiday selling season.
Any of the following risks could materially adversely affect our business, operating results or financial condition, and could cause a decline in the trading price of our Class A Common Stock and the value of your investment.
Any of the following risks could materially adversely affect our business, operating results or financial condition, and could cause a decline in the trading price of our Class A Common Stock and the value of your investment. Risks Related to Our Investment Policy and Investment Portfolio The value of our investment portfolio may decline.
A successful cybersecurity attack could lead to significant disruptions in the operations of our systems and business, including our ability to accept payment from customers, unauthorized release of confidential information, including customer payment information and corruption of data.
A successful cybersecurity attack or other compromise of our data or information systems could lead to significant disruptions in the operations of our systems and business, including our ability to accept payment from customers, unauthorized release of sensitive information (including customer payment information) and corruption of data.
During fiscal 2023 and 2022, we generated approximately 34% and 38%, respectively, of our sales during the fourth quarter. Any adverse trend in sales during the holiday selling season could lower our results of operations for the fourth quarter and the entire fiscal year and adversely impact our liquidity.
During fiscal 2024 and 2023, we generated approximately 34% and 34%, respectively, of our sales during the fourth quarter. Any adverse trend in sales during the holiday selling season could lower our results of operations for the fourth quarter and the entire fiscal year.
Sales of those types of consoles eliminate the ability of customers to purchase physical software, which may also adversely affect our sales of both new and pre-owned physical software.
Sales of those types of consoles eliminate the ability of customers to purchase physical software, which may also adversely affect our sales of both new and pre-owned physical software. Interruptions to our supply chain or the supply chain of our suppliers may adversely affect our business.
Accordingly, a significant decline in the market value of one or more of such holdings may not be offset by hypothetically better performance of other holdings.
The Company’s investment portfolio may be concentrated in just one or a few holdings. Accordingly, a significant decline in the market value of one or more of such holdings may not be offset by hypothetically better performance of the other holdings, if any.
Interruptions to our supply chain or the supply chain of our suppliers may adversely affect our business Our suppliers rely on foreign sources, primarily in Asia, to manufacture a portion of the products we purchase from them.
Our suppliers rely on foreign sources, primarily in Asia, to manufacture a portion of the products we purchase from them.
These and other factors could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis difficult. Also, it is possible that our quarterly financial results may be below the expectations of public market analysts. 13 The agreement governing our revolving credit facility restricts our current and future operations.
These and other factors could affect our business, financial condition and results of operations, and this makes the prediction of our financial results on a quarterly basis difficult. Also, it is possible that our quarterly financial results may be below the expectations of public market analysts. We and our subsidiaries may incur additional debt.
Despite these efforts, we have been the target of cybersecurity attacks in the past and there is no guarantee that the procedures we have implemented to protect against unauthorized access are adequate.
Despite these efforts, we have been the target of cybersecurity attacks in the past and there is no guarantee that the procedures we have implemented to protect against such security breaches, compromises, and other interruptions are adequate or will be effective.
This concentration of risk may result in a more pronounced effect on net income and shareholders’ equity, and may result in greater volatility in the fair market value of the Company’s holdings of securities from one period to another.
This concentration of risk may result in a more pronounced effect on net income and stockholders’ equity, and may result in greater volatility in the fair market value of the Company’s investment portfolio from one period to another. If we acquire Bitcoin, we will be exposed to certain risks associated with Bitcoin.
Our portfolio of securities may be concentrated in one or a few holdings, which may result in a single holding significantly impacting the value of our investment portfolio. In addition, the Company’s holdings of securities may be concentrated in just one or a few holdings.
Our investment portfolio may be concentrated in one or a few holdings, which may result in a single holding significantly impacting the value of our investment portfolio. The Company’s investment portfolio is overseen in accordance with the guidelines approved by the Investment Committee pursuant to the Investment Policy.
Our business has become increasingly dependent on multiple sales channels as we strive to deliver a seamless shopping experience to our customers through both online and in-store shopping experiences.
Strategic Retail Risks If we are unable to successfully maintain strong retail and ecommerce experiences for our customers, our sales and results of operations could adversely be impacted. Our business has become increasingly dependent on multiple sales channels as we strive to deliver a seamless shopping experience to our customers through both online and in-store shopping experiences.
We have systems and processes in place that 8 are designed to protect against security and data breaches and unauthorized access to confidential information, and are constantly working to upgrade these systems and processes.
We have systems and processes in place that are designed to protect against security and data breaches, compromise of confidential and other sensitive information, and other interruptions.
If we fail to obtain products in sufficient quantities, our sales may be negatively impacted. We also depend on these manufacturers and publishers to regularly introduce new and innovative products and software titles to drive industry sales. In recent years, the number of new software titles available for sale has decreased.
We also depend on these manufacturers and publishers to regularly introduce new and innovative products and software titles to drive industry sales. In recent years, the number of new software titles available for sale has decreased. Separately, our collectibles category, including trading cards, has been driven in part by demand for new releases.
The risk or actual occurrence of various unexpected events could have a material adverse effect on our financial condition.
Weather, natural disasters, public health crises and other unexpected events could adversely affect our operating results. 12 The risk or actual occurrence of various unexpected events could have a material adverse effect on our financial condition.
Operational Risks If we do not maintain the security or privacy of our customer, associate or company information, we could impact our operations, damage our reputation, incur substantial additional costs and become subject to litigation.
Operational Risks If we or the third parties with whom we work do not maintain the security of our information 11 technology systems or data (including customer, associate or Company information), such failure could negatively impact our operations, damage our reputation, cause us to incur substantial additional costs, lead us to become subject to litigation, or cause us to experience other adverse consequences.
If we do not adapt, we may experience erosion to our brand, the quality of our products and services may suffer and our operating results may be negatively impacted. Changes in our senior management or our inability to attract and retain qualified personnel could have a material adverse impact on our business and results of operations.
If we are unsuccessful in marketing to customers of the stores that we plan to close or in transferring sales to nearby stores, our results of operations could be negatively impacted. Changes in our senior management or our inability to attract and retain qualified personnel could have a material adverse impact on our business and results of operations.
We depend on manufacturers and publishers to deliver video game hardware, software and consumer electronics in quantities sufficient to meet customer demand. Some of the products we sell may be in short supply and highly allocated among us and our competitors and we compete for product inventory.
Some of the products we sell may be in short supply and highly allocated among us and our competitors and we compete for product inventory. If we fail to obtain products in sufficient quantities, our sales may be negatively impacted.
Accordingly, changes in the market prices of such securities can have a significant impact on the Company’s reported results for a particular period, even though those changes do not bear on the performance of the Company’s operating businesses. 11 Risks Related to Our Common Stock The market price of our Class A Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control.
Accordingly, changes in the market prices of such securities can have a significant impact on the Company’s reported results for a particular period, even though those changes do not bear on the performance of the Company’s operating businesses. Our failure to deal appropriately with conflicts of interest could adversely affect our businesses.
An important part of our business involves the receipt, processing and storage of personal information of our customers and associates, including, in the case of customers, payment information.
An important part of our business involves the receipt, collection, storage, transfer, disposal, disclosure, security, use, and other processing (collectively, “process” or “processing”) of personal information of our customers and associates (including, in the case of customers, payment information) and other sensitive information (including without limitation proprietary and confidential business data, trade secrets, intellectual property, and financial data).
A new console cycle began with the launch of the Sony PlayStation 5 in November 2020, the Microsoft Xbox Series X in November 2020 and the Nintendo Switch in March 2017. We are dependent upon the timely delivery of new and innovative products from our vendors and failure to timely obtain new product can adversely affect our sales.
A new console cycle began with the launch of the Sony PlayStation 5 in November 2020, the Microsoft Xbox Series X in November 2020 and the Nintendo Switch in March 2017. In January 2025, Nintendo announced that Nintendo Switch 2, the successor to the Nintendo Switch system, will be released in 2025.
Our failure to anticipate, identify and react appropriately to changing trends and preferences of customers could lead to, among other things, excess inventories and higher markdowns. Strategic Risks If we are unable to successfully maintain strong retail and ecommerce experiences for our customers, our sales and results of operations could adversely be impacted.
Our failure to anticipate, identify and react appropriately to changing trends and preferences of customers could lead to, among other things, excess inventories and higher markdowns. Changes to tariff and import/export regulations may negatively impact our future financial condition and results of operations.
The Company’s financial position and financial performance could be adversely affected by worsening market conditions or poor performance of such investments.
The Company’s financial position and financial performance could be adversely affected by worsening market conditions or poor performance of such investments. Bitcoin, for example, is a highly volatile asset and has experienced significant price fluctuations over time. Our Bitcoin strategy has not been tested and may prove unsuccessful. U.S.
As a result, legal proceedings may adversely affect our business, financial condition, results of operations or liquidity. Risks Related to our Investment Policy and Securities The value of our securities may decline. The Company invests from time to time in securities and is exposed to market volatility in connection with these investments.
As a result, legal proceedings may adversely affect our business, financial condition, results of operations or liquidity. Risks Related to Our Class A Common Stock The market price of our Class A Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond our control.
Removed
Any such cybersecurity attack may also require significant investment and resources to identify and remediate, may expose us to costly litigation, government investigations, government enforcement actions, fines and/or lawsuits and may significantly harm our reputation with our customers. Weather, natural disasters, public health crises and other unexpected events could adversely affect our operating results.
Added
The Company's Investment Policy permits the Company to invest from time to time in securities and certain crypto-currencies, including Bitcoin and U.S. Dollar-denominated stablecoins, and the Company is, and will be, exposed to market volatility in connection with these investments.
Removed
The agreement governing our revolving credit facility contains a number of restrictive covenants that impose significant operating and financial restrictions on us and certain of our subsidiaries and may limit our ability to engage in acts that may be in our long-term best interest, including limitations on additional liens, investments, acquisitions, loans, guarantees, the incurrence of additional indebtedness, certain fundamental changes, certain dispositions, certain dividends and distributions and certain related party transactions.
Added
Dollar-denominated stablecoins may also suffer from value loss due to various issues underlying the product, including bank or issuer failure or underlying blockchain problems.
Removed
A breach of the covenants or restrictions under the agreement governing our revolving credit facility could result in an event of default. Such an event of default may allow the creditors to accelerate the related debt and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies.
Added
The Bitcoin markets have historically experienced significant volatility in price, limited liquidity and trading volumes, relative anonymity, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges and other risks inherent in its entirely electronic, virtual form and decentralized network.
Removed
In addition, an event of default under the revolving credit facility would permit the lenders under our revolving credit facility to terminate all commitments to extend further credit under that facility.
Added
Our Bitcoin holdings could significantly impact our financial results and the market price of our listed securities. Our Bitcoin strategy has not been tested over an extended period of time or under different market conditions. We are continually examining the risks and rewards of our strategy to acquire and hold Bitcoin.
Removed
Furthermore, if we were unable to repay the amounts due and payable under our revolving credit facility, those lenders could proceed against the collateral granted to them to secure that indebtedness. If our lenders accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness.
Added
By investing in Bitcoin, we may become subject to counterparty risk, such as with our Bitcoin custodians and those with whom we transact in Bitcoin or other crypto-currencies. The broader digital assets industry may also be subject to counterparty risks, which could adversely impact the adoption rate, price, and use of Bitcoin.
Removed
As a result of these restrictions we may be limited in how we conduct our business, unable to raise additional debt or equity financing necessary to operate during general economic or business downturns, or unable to compete effectively or to take advantage of new business opportunities. Accordingly, these restrictions may affect our ability to operate in accordance with our strategy.
Added
Bitcoin and other crypto-currencies are subject to regulatory and legal uncertainty, and governments and regulators may enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions that could impact the price of Bitcoin or our ability to acquire, hold or transfer Bitcoin, and may subject us to increased regulatory scrutiny.
Removed
To fund our operations, we require cash. We may not be able to generate sufficient cash flow to meet such obligations. Our ability to generate sufficient cash flow from operations to fund our business will depend on our ability to generate cash in the future.
Added
If federal or state tax authorities change Bitcoin’s classification from property, which allows for capital gains treatment but also imposes certain tax reporting requirements, to another category, such as to currency or a financial asset, the resulting tax implications could negatively affect us and our stockholders.
Removed
This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. If we do not generate sufficient cash flow from operations to fund our business, we may have to sell assets, reduce or delay capital investments or seek to raise additional capital.
Added
Additionally, changes in the accounting treatment of our Bitcoin holdings could have significant accounting impacts, including increasing the volatility of our results.
Removed
We cannot provide assurance that any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds realized from those sales or, that additional capital could be raised. We and our subsidiaries may incur additional debt. This could further increase the risks associated with our leverage.
Added
Bitcoin does not pay interest or other returns and we can only generate cash from our Bitcoin holdings if we sell our Bitcoin or implement strategies to create income streams or otherwise generate cash by using our Bitcoin holdings.
Removed
Although our revolving credit facility agreement contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. Additionally, these restrictions will not prevent us from incurring obligations that do not constitute indebtedness.
Added
Even if we pursue any such strategies, we may be unable to create income streams or otherwise generate cash from our Bitcoin holdings, and any such strategies may subject us to additional risks.
Removed
Such future indebtedness or obligations may have restrictions similar to, or more restrictive than, those included in our revolving credit facility agreement. The incurrence of additional indebtedness could impact our financial condition and results of operations.
Added
If we are unable to sell Bitcoin we acquire or otherwise generate funds using our Bitcoin holdings, or if we are forced to sell our Bitcoin at a significant loss, our business and financial condition could be negatively impacted.
Added
In addition, Bitcoin and other blockchain-based cryptocurrencies and the entities that provide services to participants in the Bitcoin ecosystem, as well as the Bitcoin and blockchain ledger, digital wallets, and other digital assets and blockchain technologies, have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities.
Added
If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our Bitcoin, or other similar 7 circumstances or events occur, we may lose some or all of our Bitcoin and our financial condition and results of operations could be materially adversely affected.
Added
Further, to the extent the private keys for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the private keys is accessible, neither we nor our custodians would be able to access the Bitcoin held in the related digital wallet. If we acquire U.S.
Added
Dollar-denominated stablecoins, we may be exposed to certain risks associated with such stablecoins. U.S. Dollar-denominated stablecoins are digital assets designed to have a stable value over time as compared to typically volatile digital assets, and are backed by the U.S. Dollar.
Added
Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement or redemption), concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries or the stablecoins themselves, could all impair the value of such stablecoins and result in losses. By investing in U.S.
Added
Dollar-denominated stablecoins, we may become subject to counterparty risk, such as with the issuers of the stablecoins, custodians and those with whom we transact in U.S. Dollar-denominated stablecoins. U.S.
Added
Dollar-denominated stablecoins are subject to regulatory and legal uncertainty, and governments and regulators may enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions that could impact our ability to acquire, hold or transfer U.S. Dollar-denominated stablecoins, and may subject us to increased regulatory scrutiny.
Added
Certain of our executive officers, members of our Investment Committee and members of the Board of Directors engage in personal investment activities.
Added
These personal investments, done in their individual capacities or through affiliated investment vehicles, may give rise to potential conflicts or perceived conflicts between the personal financial interests of the executive officers, members of our Investment Committee or members of the Board of Directors and the interests of us, any of our subsidiaries or any stockholder other than such executive officers, members of our Investment Committee or members of the Board of Directors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems. We maintain processes to reduce the impact of a cybersecurity attack at a third-party vendor. We maintain a cybersecurity incident response plan, which details the incident response procedures and points of contact related to the response processes.
Biggest changeWe use processes to oversee and identify material risks from cybersecurity threats associated with our use of third-party technology and systems. We maintain processes designed to reduce the impact of a cybersecurity attack or other compromise at a third-party vendor.
We assess, identify and 14 manage material risks related to potential cybersecurity attacks on or through our electronic information systems that could adversely affect the confidentiality, integrity, or availability of our information systems or the information residing on those systems through various processes.
We assess, identify and manage material risks related to potential cybersecurity attacks on or through our electronic information systems that could adversely affect the confidentiality, integrity, or availability of our information systems or the information residing on those systems through various processes.
The Company strives to implement cybersecurity policies, standards, processes and controls for assessing, identifying and managing material risks from cybersecurity threats and responding to cybersecurity attacks that are aligned with industry best practices and applicable frameworks.
The Company strives to implement cybersecurity policies, standards, processes and controls for assessing, identifying and managing material risks from 17 cybersecurity threats and responding to cybersecurity attacks that are aligned with industry best practices and applicable frameworks.
We seek to address cybersecurity risks through a cross-functional approach, including relevant training for applicable employees and regular reviews and tests of our cybersecurity program that leverage audits performed by our internal audit team. In addition to our in-house cybersecurity capabilities, at times we also engage consultants or other third parties to assist with assessing, identifying and managing cybersecurity risks.
We seek to address cybersecurity risks through a cross-functional approach, including relevant training for applicable associates and regular reviews and tests of our cybersecurity program that leverage audits performed by our internal audit team. In addition to our in-house cybersecurity capabilities, at times we also engage consultants or other third parties to assist with assessing, identifying and managing cybersecurity risks.
These processes include a wide variety of controls, technologies, methods, systems, and other processes that are designed to prevent, detect, or mitigate data loss, theft and misuse, and unauthorized access to, or other cybersecurity attacks or vulnerabilities affecting, our data.
These processes include a wide variety of controls, technologies, methods, systems, and other processes that are designed to prevent, detect, or mitigate data loss, theft and misuse, and unauthorized access to, or other cybersecurity attacks or vulnerabilities affecting, our data and information technology systems.
ITEM 1C. CYBERSECURITY Risk Management and Strategy An important part of our business involves the receipt, processing and storage of personal information of our customers and associates, including, in the case of our customers, payment information. Security of this information and our other proprietary data is imperative to ensure the trust of our customers, vendors, and employees.
ITEM 1C. CYBERSECURITY Risk Management and Strategy An important part of our business involves the receipt, storage and other processing of personal information of our customers and associates, including, in the case of our customers, payment information. Security of this information and our other proprietary or sensitive data is imperative to ensure the trust of our customers, vendors, and associates.
Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our information security systems.
Risk Factors” for additional information about the risks to our business associated with a breach or compromise to our data and information security systems.
The security team’s leadership has an average of over 12 years of prior work experience in various roles including monitoring, response, compliance and privacy.
The security team’s leadership has an average of 13 years of prior work experience in various roles including monitoring, response, compliance and privacy.
The Audit Committee of the Board of Directors, with input from management, assesses the measures implemented by us to mitigate and prevent cybersecurity attacks.
The Audit Committee of the Board of Directors, with input from management, assesses the measures implemented by us to mitigate and prevent cybersecurity attacks or other compromise.
Our Audit Committee has oversight responsibility for our cybersecurity program. 15
Our Audit Committee has oversight responsibility for our cybersecurity program. 18
The response plan includes a decision-tree-based playbook, which is a supplement to the plan, and focuses on specific types of incidents and the appropriate response steps.
We maintain a cybersecurity incident response plan, which details the incident response procedures and points of contact related to the response processes. The response plan includes a decision-tree-based playbook, which is a supplement to the plan, and focuses on specific types of incidents and the appropriate response steps.

Item 2. Properties

Properties — owned and leased real estate

4 edited+1 added−1 removed1 unchanged
Biggest changeLocation Segment Square Footage Owned or Leased Use Grapevine, Texas, USA United States 360,000 Leased Distribution and administration Grapevine, Texas, USA United States 182,000 Leased Manufacturing and distribution York, Pennsylvania, USA (1) United States 708,000 Leased Fulfillment and distribution Brampton, Ontario, Canada Canada 119,000 Leased Distribution and administration Eagle Farm, Queensland, Australia Australia 185,000 Leased Distribution and administration Milan, Italy Europe 123,000 Owned Distribution and administration ___________________ (1) In January of 2023, we announced plans to close the Shepherdsville, Kentucky distribution facility to consolidate our fulfillment activities.
Biggest changeLocation Segment Square Footage Owned or Leased Use Grapevine, Texas, USA (1) United States 360,000 Leased Distribution, administration, and manufacturing Brampton, Ontario, Canada Canada 119,000 Leased Distribution and administration Eagle Farm, Queensland, Australia Australia 185,000 Leased Distribution and administration Sophia Antipolis, France Europe 18,165 Leased Administration Paris, France Europe 76,000 Leased Distribution ___________________ (1) In fiscal 2024 we closed our York, Pennsylvania distribution facility to consolidate U.S. fulfillment activities to our Grapevine, Texas facility.
The lease expiration dates for the leased facilities range from 2024 to 2032, with an average remaining lease life, including reasonably certain options, of approximately six years. The following table presents our principal facilities. Additional information regarding our properties can be found in Item 1, “Business—Store Locations” in this Form 10-K.
The lease expiration dates for the leased facilities range from 2025 to 2032, with an average remaining lease life, including reasonably certain options, of approximately six years. The following table presents our principal facilities (1) . Additional information regarding our properties can be found in Item 1, “Business—Store Locations” in this Form 10-K.
We believe that, as current leases expire, we will be able to obtain either renewals at present locations or leases for similar locations in the same area. The terms of the store leases for the 4,169 leased stores open as of February 3, 2024 expire as follows.
We believe that, as current leases expire, we will be able to obtain either renewals at present locations or leases for similar locations in the same area. The terms of the store leases for the 3,203 leased stores open as of February 1, 2025 expire as follows.
Lease Terms to Expire During Number of Stores Fiscal 2024 1,350 Fiscal 2025 928 Fiscal 2026 580 Fiscal 2027 481 Fiscal 2028 and later 830 Total 4,169 As of February 3, 2024, we owned two and leased 12 office and distribution facilities, totaling approximately 2.0 million square feet.
Lease Terms to Expire During Number of Stores Fiscal 2025 1,688 Fiscal 2026 771 Fiscal 2027 356 Fiscal 2028 261 Fiscal 2029 and later 127 3,203 A s of February 1, 2025, we owned zero and leased 11 distribution facilities, totaling approximately 1.8 million square feet.
Removed
This was completed in fiscal 2023. In January of 2024, we announced plans to close the York, Pennsylvania distribution facility, which will consolidate U.S. fulfillment activities to our Grapevine, Texas facility during the first quarter of fiscal 2024.
Added
In fiscal 2024 we divested our operations in Italy, which included our facility in Milan, Italy. In fiscal 2024 we relocated our U.S. refurbishment operations into our distribution and administration facility in Grapevine Texas. Previously these refurbishment operations were performed in a separate facility also located in Grapevine, Texas.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The matters included in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 16 , "Commitments and Contingencies - Legal Proceedings" included in this Form 10-K are incorporated by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 16 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The matters included in Part II, Item 8, Notes to the Consolidated Financial Statements, Note 1 5, "Commitments and Contingencies - Legal Proceedings" included in this Form 10-K are incorporated by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+1 added−1 removed2 unchanged
Biggest changeOn June 3, 2019, our Board of Directors elected to eliminate our quarterly dividend in an effort to strengthen our balance sheet and provide increased financial flexibility. During the past four fiscal years, we have not declared, and do not anticipate declaring in the near term, dividends on shares of our Class A Common Stock.
Biggest changeDuring the past five fiscal years, we have not declared, and do not anticipate declaring in the near term, dividends on shares of our Class A Common Stock.
The following stock performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor should such information be incorporated by reference into any future filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing. 17 2/1/2019 1/31/2020 1/29/2021 1/28/2022 1/27/2023 2/2/2024 GME $ 100.00 $ 25.63 $ 2,169.54 $ 653.60 $ 609.34 $ 393.32 S&P 500 Index $ 100.00 $ 124.48 $ 145.93 $ 176.56 $ 164.83 $ 204.08 Dow Jones Specialty Retailers Index $ 100.00 $ 110.92 $ 156.31 $ 149.90 $ 149.53 $ 178.51 As noted above under the heading "Risk Factors — Risk Related to Our Common Stock", the market price of our Class A Common Stock has been extremely volatile due to circumstances outside of our control, including a short squeeze that led to volatile price movements that were unrelated or disproportionate to our operating performance.
The following stock performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor should such information be incorporated by reference into any future filings under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing. 20 1/28/2019 1/31/2020 1/29/2021 1/28/2022 1/27/2023 2/2/2024 1/31/2025 GME $ 100.00 $ 25.63 $ 2,169.54 $ 653.60 $ 609.34 $ 393.32 $ 718.28 S&P 500 Index $ 100.00 $ 124.48 $ 145.93 $ 176.56 $ 164.83 $ 204.08 $ 251.96 Dow Jones Specialty Retailers Index $ 100.00 $ 110.92 $ 156.31 $ 149.90 $ 149.53 $ 178.51 $ 261.04 As noted above under the heading "Risk Factors — Risk Related to Our Class A Common Stock", the market price of our Class A Common Stock has been extremely volatile due to circumstances outside of our control, including a short squeeze in 2021 that led to volatile price movements that were unrelated or disproportionate to our operating performance.
Total return values were calculated based on cumulative total return assuming (i) the investment of $100 in our Class A Common Stock, the S&P 500 and the Dow Jones Specialty Retailers Index on February 1, 2019 and (ii) reinvestment of dividends.
Total return values were calculated based on cumulative total return assuming (i) the investment of $100 in our Class A Common Stock, the S&P 500 and the Dow Jones Specialty Retailers Index on January 28, 2019 and (ii) reinvestment of dividends.
Stock Comparative Performance Graph The following graph compares the cumulative total stockholder return on our Class A Common Stock for the period commencing February 1, 2019 through February 2, 2024 (the last trading date of fiscal 2023) with the cumulative total return on the Standard & Poor’s 500 Stock Index (the “S&P 500”) and the Dow Jones Retailers, Other Specialty Industry Group Index (the “Dow Jones Specialty Retailers Index”) over the same period.
Stock Comparative Performance Graph The following graph compares the cumulative total stockholder return on our Class A Common Stock for the period commencing January 28, 2019 through January 31, 2025 (the last trading date of fiscal 2024) with the cumulative total return on the Standard & Poor’s 500 Stock Index (the “S&P 500”) and the Dow Jones Retailers, Other Specialty Industry Group Index (the “Dow Jones Specialty Retailers Index”) over the same period.
Of those outstanding shares, approximately 230.6 million were held by Cede & Co on behalf of the Depository Trust & Clearing Corporation (or approximately 75% of our outstanding shares) and approximately 75.3 million shares of our Class A common stock were held by registered holders with our transfer agent (or approximately 25% of our outstanding shares).
Of those outstanding shares, approximately 377.6 million were held by Cede & Co on behalf of the Depository Trust & Clearing Corporation (or approximately 84% of our outstanding shares) and approximately 69.5 million shares of our Class A Common Stock were held by registered holders with our transfer agent (or approximately 16% of our outstanding shares).
(2) On March 4, 2019, our Board of Directors approved a share repurchase authorization allowing us to repurchase up to $300.0 million of our Class A Common Stock. The authorization has no expiration date. We did not repurchase shares during fiscal 2023 or fiscal 2022. As of February 3, 2024, we have $101.3 million remaining under the repurchase authorization.
Issuer Purchases of Equity Securities On March 4, 2019, our Board of Directors approved a share repurchase authorization allowing us to repurchase up to $300.0 million of our Class A Common Stock. The authorization has no expiration date. We did not repurchase shares during fiscal 2024 or fiscal 2023.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “GME”. As of March 20, 2024, there were 305,873,200 shares of our Class A common stock outstanding.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A Common Stock is traded on the NYSE under the symbol “GME”. As of March 19, 2025, there were 447,083,981 shares of our Class A Common Stock outstanding.
Refer to Item 7. Management's Discussion and Analysis - "Share Repurchases" for additional information. ITEM 6. RESERVED 18
As of February 1, 2025, we have $101.3 million remaining under the repurchase authorization. Refer to Item 7. Management's Discussion and Analysis - "Share Repurchases" for additional information. ITEM 6. RESERVED 21
Removed
Issuer Purchases of Equity Securities Our purchases of our equity securities during the fourth quarter of fiscal 2023 were as follows: Fiscal Period Total Number of Shares Purchased (1) Weighted-Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) (In millions) October 29, 2023 through November 25, 2023 204 $ 13.03 — $ 101.3 November 26, 2023 through December 30, 2023 19 $ 15.30 — $ 101.3 December 31, 2023 through February 3, 2024 45,575 $ 17.53 — $ 101.3 Total 45,798 $ 17.51 — $ 101.3 (1) Under both our GameStop Corp. 2019 Incentive Plan and our GameStop Corp. 2022 Incentive Plan, approved by our Board of Directors and our stockholders, we withheld 45,798 shares of Class A Common Stock from certain employees to satisfy minimum tax withholding obligations relating to the vesting of their restricted stock units.
Added
As of March 19, 2025, there were 190,074 record holders of our Class A Common Stock. On June 3, 2019, our Board of Directors elected to eliminate our quarterly dividend in an effort to strengthen our balance sheet and provide increased financial flexibility.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

46 edited+25 added−15 removed28 unchanged
Biggest changeJanuary 28, 2023 Openings Disposals February 3, 2024 United States 2,949 35 (69) 2,915 Canada 216 — (13) 203 Australia 419 4 (19) 404 Europe 829 4 (186) 647 Total Stores 4,413 43 (287) 4,169 CONSOLIDATED RESULTS OF OPERATIONS The following table presents certain statement of operations items (in millions) and as a percentage of net sales: Fiscal 2023 Fiscal 2022 Change Amount Percent of Net Sales Amount Percent of Net Sales $ % Net sales $ 5,272.8 100.0 % $ 5,927.2 100.0 % $ (654.4) (11.0) % Cost of sales 3,978.6 75.5 4,555.1 76.9 (576.5) (12.7) Gross profit 1,294.2 24.5 1,372.1 23.1 (77.9) (5.7) Selling, general, and administrative expenses 1,323.9 25.1 1,681.0 28.4 (357.1) (21.2) Asset impairments 4.8 0.1 2.7 — 2.1 77.8 Operating loss (34.5) (0.7) (311.6) (5.3) 277.1 88.9 Interest income, net (49.5) (0.9) (9.5) (0.2) (40.0) (421.1) Other loss, net 1.9 — — — 1.9 100.0 Income (loss) before income taxes 13.1 0.2 (302.1) (5.1) 315.2 NM (1) Income tax expense, net 6.4 0.1 11.0 0.2 (4.6) (41.8) Net income (loss) $ 6.7 0.1 % $ (313.1) (5.3) % $ 319.8 NM (1) (1) “NM” is data that is not meaningful.
Biggest changeFebruary 3, 2024 Openings Disposals February 1, 2025 United States 2,915 — (590) 2,325 Canada 203 1 (11) 193 Australia 404 3 (33) 374 Europe 647 — (336) 311 Total Stores 4,169 4 (970) 3,203 23 CONSOLIDATED RESULTS OF OPERATIONS The following table presents certain statement of operations items (in millions) and as a percentage of net sales: Fiscal 2024 Fiscal 2023 Change Amount Percent of Net Sales Amount Percent of Net Sales $ % Net sales $ 3,823.0 100.0 % $ 5,272.8 100.0 % $ (1,449.8) (27.5) % Cost of sales 2,709.1 70.9 3,978.6 75.5 (1,269.5) (31.9) Gross profit 1,113.9 29.1 1,294.2 24.5 (180.3) (13.9) Selling, general, and administrative expenses 1,130.4 29.6 1,323.9 25.1 (193.5) (14.6) Asset impairments 9.7 0.2 4.8 0.1 4.9 102.1 Operating loss (26.2) (0.7) (34.5) (0.7) 8.3 24.1 Interest (income) expense, net (163.4) (4.3) (49.5) (0.9) (113.9) (230.1) Other expense, net — — 1.9 — (1.9) 100.0 Income before income taxes 137.2 3.6 13.1 0.2 124.1 NM (1) Income tax expense, net 5.9 0.2 6.4 0.1 (0.5) (7.8) Net income $ 131.3 3.4 % $ 6.7 0.1 % $ 124.6 NM (1) (1) “NM” is data that is not meaningful.
If such changes take place, there is a risk that our effective tax rate could increase or decrease in any period, impacting our net earnings. RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS See Item 8, Notes to the Consolidated Financial Statements, Note 3 , "New Accounting Pronouncements," for recent accounting standards and pronouncements.
If such changes take place, there is a risk that our effective tax rate could increase or decrease in any period, impacting our net earnings. RECENT ACCOUNTING STANDARDS AND PRONOUNCEMENTS See Item 8, Notes to the Consolidated Financial Statements, Note 3 , "New Accounting Pronouncements," for recent accounting standards and pronouncements. 29
We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates. The weighted-average retail price per point redeemed is based on our most recent actual loyalty point redemptions and is adjusted as appropriate for recent changes in redemption values, including the mix of rewards redeemed.
We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates. The 28 weighted-average retail price per point redeemed is based on our most recent actual loyalty point redemptions and is adjusted as appropriate for recent changes in redemption values, including the mix of rewards redeemed.
In accordance with the revised Investment Policy, the Board of Directors has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee consisting of the Company’s Chairman of the Board of Directors and Chief Executive Officer, Ryan Cohen, and two independent members of the Board of Directors, together with such personnel and advisors as the Investment Committee may choose.
In accordance with the revised Investment Policy, the Board has delegated authority to manage the Company’s portfolio of securities investments to an Investment Committee of the Board (the "Investment Committee") consisting of the Company’s Chairman of the Board and Chief Executive Officer, Ryan Cohen, and two independent members of the Board, together with such personnel and advisors as the Investment Committee may choose.
Certain factors, which may cause actual results to vary materially from these forward-looking statements, accompany such statements or appear elsewhere in this Form 10-K, including the disclosures under Part I, Item 1A, “Risk Factors.” In Management’s Discussion and Analysis of Financial Condition and Results of Operations, we provide a detailed analysis for fiscal 2023 compared to fiscal 2022.
Certain factors, which may cause actual results to vary materially from these forward-looking statements, accompany such statements or appear elsewhere in this Form 10-K, including the disclosures under Part I, Item 1A, “Risk Factors.” In Management’s Discussion and Analysis of Financial Condition and Results of Operations, we provide a detailed analysis for fiscal 2024 compared to fiscal 2023.
Share Repurchases On March 4, 2019, our Board of Directors approved a share repurchase authorization allowing us to repurchase up to $300.0 million of our Class A Common Stock. The authorization has no expiration date. We did not repurchase shares during fiscal 2023, fiscal 2022 or fiscal 2021.
Share Repurchases On March 4, 2019, our Board of Directors approved a share repurchase authorization allowing us to repurchase up to $300.0 million of our Class A Common Stock. The authorization has no expiration date. We did not repurchase shares during fiscal 2024, fiscal 2023 or fiscal 2022.
See Item 8, Notes to the Consolidated Financial Statements, Note 15 , "Income Taxes," for additional information. We maintain accruals for uncertain tax positions until examination of the tax year is completed by the taxing authority, available review periods expire, or additional facts and circumstances cause us to change our assessment of the appropriate accrual amount.
See Item 8, Notes to the Consolidated Financial Statements, Note 1 4 , "Income Taxes," for additional information. We maintain accruals for uncertain tax positions until examination of the tax year is completed by the taxing authority, available review periods expire, or additional facts and circumstances cause us to change our assessment of the appropriate accrual amount.
Some of our vendors have requested and may continue to request credit support collateral for our inventory purchase obligations and the levels of such collateral will depend on a variety of factors, including our inventory purchase levels, available payment terms for inventories, availability of borrowing capacity under our credit facilities, favorable credit terms and costs of providing collateral.
Some of our vendors have requested and may continue to request credit support collateral for our inventory purchase obligations and the levels of such collateral will depend on a variety of factors, including our inventory purchase levels, available payment terms for inventories, favorable credit terms, and costs of providing collateral.
Our cash and cash equivalents are carried at fair value and consist primarily of U.S. government bonds and notes, money market funds, cash deposits with commercial banks, and highly rated direct short-term instruments that mature in 90 days or less.
Our cash and cash equivalents are carried at fair value and consist primarily of cash, money market funds, cash deposits with commercial banks, U.S. government bonds and notes, and highly rated direct short-term instruments with original maturities of 90 days or less.
As of February 3, 2024, we have $101.3 million remaining under the repurchase authorization. 23 OFF-BALANCE SHEET ARRANGEMENTS We had no material off-balance sheet arrangements as of February 3, 2024 other than those disclosed in Item 8, Notes to the Consolidated Financial Statements, Note 16 , "Commitments and Contingencies".
As of February 1, 2025, we have $101.3 million remaining under the repurchase authorization. OFF-BALANCE SHEET ARRANGEMENTS We had no material off-balance sheet arrangements as of February 1, 2025 other than those disclosed in Item 8, Notes to the Consolidated Financial Statements, Note 15 , "Commitments and Contingencies".
For a comparison of our results of operations for fiscal 2022 compared to fiscal 2021, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended January 28, 2023, as filed with the SEC on March 28, 2023. OVERVIEW GameStop Corp.
For a comparison of our results of operations for fiscal 2023 compared to fiscal 2022, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended February 3, 2024, as filed with the SEC on March 26, 2024. OVERVIEW GameStop Corp.
Our liability for uncertain tax positions was $6.8 million as of February 3, 2024. Considerable management judgment is necessary to assess the inherent uncertainties related to the interpretations of complex tax laws, regulations and taxing authority rulings, as well as to the expiration of statutes of limitations in the jurisdictions in which we operate.
Our liability for uncertain tax positions was $7.5 million as of February 1, 2025. Considerable management judgment is necessary to assess the inherent uncertainties related to the interpretations of complex tax laws, regulations and taxing authority rulings, as well as to the expiration of statutes of limitations in the jurisdictions in which we operate.
A 10% change in our obsolescence reserve percentage at February 3, 2024 would have affected net earnings by approximately $2.9 million in fiscal 2023. Customer Liabilities Our GameStop Pro ® rewards program allows paid members to earn points on purchases that can be redeemed for rewards that include discounts or coupons.
A 10% change in our obsolescence reserve percentage at February 1, 2025 would have affected net earnings by approxi mately $1.5 million in fiscal 2024. Customer Liabilities Our GameStop Pro ® rewards program allows paid members to earn points on purchases that can be redeemed for rewards that include discounts or coupons.
A 10% change in our customer loyalty program redemption rate or a 10% change in our weighted-average retail value per point redeemed at February 3, 2024, in each case, would have affected 24 net earnings by approximately $1.7 million in fiscal 2023.
A 10% change in our customer loyalty program redemption rate or a 10% change in our weighted-average retail value per point redeemed at February 1, 2025, in each case, would have affected net earnings by approxima tely $1.4 million in fiscal 2024.
On March 22, 2024, the Company delivered an irrevocable notice pursuant to the 2026 Revolver that reduces the $500 million revolving line of credit to $250 million. The 2026 Revolver will continue to include a $50 million swing loan sub-facility, a $50M Canadian sub-facility and a $250 million letter of credit sublimit.
The 2026 Revolver included a $50 million swing loan revolving sub-facility, a $50 million Canadian revolving sub-facility, and a $250 million letter of credit sublimit. On March 22, 2024, we delivered an irrevocable notice pursuant to the 2026 Revolver that reduced the $500 million revolving line of credit to $250 million.
A 10% change in our gift card breakage rate at February 3, 2024 would have affected net earnings by approximately $10.9 million in fiscal 2023.
A 10% change in our gift card breakage rate at February 1, 2025 would have affected net earnings by approximat ely $9.5 million in fiscal 2024. A 10% change in our reservation breakage at February 1, 2025 would have affected net earnings by approximately $1.3 million in fiscal 2024.
The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such 19 directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company.
The Board anticipates that such investments will align the interests of the Company with the interests of related parties because it places the personal resources of such directors at risk in substantially the same manner as resources of the Company in connection with investment decisions made by the Investment Committee on behalf of the Company. 22 Retail Business GameStop is actively focused on the below objectives: • Establish Omnichannel Retail Excellence.
Cash Flows The following table presents a summary of our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statements of Cash Flows: Fiscal 2023 Fiscal 2022 Change Cash (used in) provided by operating activities $ (203.7) $ 108.2 $ (311.9) Cash used in investing activities (33.2) (222.7) 189.5 Cash used in financing activities (11.6) (7.9) (3.7) Exchange rate effect on cash, cash equivalents and restricted cash (8.6) (1.5) (7.1) Decrease in cash, cash equivalents and restricted cash $ (257.1) $ (123.9) $ (133.2) Operating Activities In fiscal 2023, cash flows provided by operating activities were an outflow of $203.7 million, compared with an inflow of $108.2 million in fiscal 2022.
Cash Flows The following table presents a summary of our cash flows from operating, investing, and financing activities, as reflected in the Consolidated Statements of Cash Flows: Fiscal 2024 Fiscal 2023 Change Cash provided by (used in) operating activities $ 145.7 $ (203.7) $ 349.4 Cash provided by (used in) investing activities 265.1 (33.2) 298.3 Cash provided by (used in) financing activities 3,443.0 (11.6) 3,454.6 Exchange rate effect on cash, cash equivalents and restricted cash (2.9) (8.6) 5.7 Increase (decrease) in cash, cash equivalents and restricted cash $ 3,850.9 $ (257.1) $ 4,108.0 Operating Activities In fiscal 2024, cash provided by operating activities were $145.7 million, compared with cash used in operations of $203.7 million in fiscal 2023.
See Item 8, Notes to the Consolidated Financial Statements, Note 15 , "Income Taxes," for additional information. 21 LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents and marketable securities February 3, 2024 January 28, 2023 Cash and cash equivalents $ 921.7 $ 1,139.0 Marketable securities 277.6 251.6 Cash, cash equivalents and marketable securities $ 1,199.3 $ 1,390.6 Sources of Liquidity; Uses of Capital Our principal sources of liquidity are cash from operations, cash on hand, and borrowings from the capital markets, which include our revolving credit facilities.
See Item 8, Notes to the Consolidated Financial Statements, Note 14 , "Income Taxes," for additional information. 25 LIQUIDITY AND CAPITAL RESOURCES Cash, cash equivalents and marketable securities February 3, 2024 January 28, 2023 Cash and cash equivalents $ 4,756.9 $ 921.7 Marketable securities 18.0 277.6 Cash, cash equivalents and marketable securities $ 4,774.9 $ 1,199.3 Sources of Liquidity; Uses of Capital Our principal sources of liquidity are cash on hand and cash from operations.
The decrease in accounts payable and accrued liabilities was primarily due to the timing of payments for merchandise inventory as a result of an additional week in fiscal 2023 compared to fiscal 2022.
The decrease in accounts payable and accrued liabilities was primarily due to the timing of payments for merchandise inventory as a result of an additional week in fiscal 2023 compared to fiscal 2022. Investing Activities In fiscal 2024, cash provided by investing activities were $265.1 million, compared to cash used in investing activities of $33.2 million in fiscal 2023.
The Investment Committee will direct the investment activity of the Company in public and private markets pursuant to authority granted by the Board of Directors. Depending on certain market conditions and various risk factors, Mr.
We have not set a maximum amount of Bitcoin we may accumulate, and may sell any Bitcoin we may acquire. The Investment Committee will direct the investment activity of the Company in public and private markets pursuant to authority granted by the Board. Depending on certain market conditions and various risk factors, Mr.
This global minimum tax, known as the Pillar Two framework, will become effective across various countries starting in 2024, as each country works to enact legislation influenced by the OECD Pillar Two rules.
This global minimum tax, known as the Pillar Two framework, became effective across various countries in 2024, as each country works to enact legislation influenced by the OECD Pillar Two rules. In 2024, the Company had no impact on its effective tax rate after the adoption of the Pillar Two framework.
Selling, General, and Administrative Expenses SG&A expenses decreased $357.1 million or 21.2%, in fiscal 2023 compared to the prior year, and SG&A as a percentage of net sales decreased to 25.1%, in fiscal 2023, compared to 28.4% the prior year.
Selling, General, and Administrative Expenses SG&A expenses decreased $193.5 million or 14.6% in fiscal 2024 compared to the prior year, and SG&A as a percentage of net sales increased to 29.6%, in fiscal 2024, compared to 25.1% the prior year.
Our marketable securities are also carried at fair value and include investments in certain highly-rated short-term government notes, government bills, and time deposits. Our marketable securities have a maturity date of greater than 90 days but less than one year.
Our marketable securities are also carried at fair value and include investments in certain highly-rated short-term government notes, government bills, and time deposits.
(“GameStop,” “we,” “us,” “our” or the “Company”), a Delaware corporation established in 1996, is a leading specialty retailer offering games and entertainment products through its thousands of stores and ecommerce platforms. BUSINESS PRIORITIES GameStop is following a strategic plan to fully leverage its unique position and brand recognition in gaming through a new phase of transformation.
(“GameStop,” “we,” “us,” “our” or the “Company”), a Delaware corporation established in 1996, is a leading specialty retailer offering games and entertainment products through its thousands of stores and ecommerce platforms.
While we expect our cost containment efforts to yield reductions in SG&A expenses in the long term, we have incurred and may continue to incur non-recurring costs related to these efforts in the short term. Investments On December 5, 2023, the Board of Directors approved a new investment policy (the “Investment Policy”).
While we expect our cost containment efforts to yield reductions in selling, general and administrative ("SG&A") expenses in the long term, we have incurred and may continue to incur non-recurring costs related to these efforts in the short term.
Additionally, a valuation allowance is recorded against a deferred tax asset if it is not more likely than not that the asset will be realized. We assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.
We assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.
Cash used in financing activities during fiscal 2023 and 2022 was attributable to the repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026 and the settlement of stock-based awards.
Cash provided by financing activities during fiscal 2024 was primarily due to net proceeds of $3,453.8 million received from the issuance and sale of shares of our Class A Common Stock in connection with the ATM Offerings, partially offset by repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026. 27 Cash used in financing activities during fiscal 2023 was attributable to the repayments on our government-guaranteed low interest French term loans due October 2022 through October 2026 and the settlement of stock-based awards.
During fiscal 2023, we recognized asset impairment charges of $4.8 million compared to asset impairment charges of $2.7 million in fiscal 2022. See Item 8, Notes to the Consolidated Financial Statements, Note 9 , "Asset Impairments," for additional information related to the impact of impairment charges by segment.
See Item 8, Notes to the Consolidated Financial Statements, Note 5 "Segment Information" for additional information related to the impact of impairment charges by segment. Interest Income, Net Interest income, net increased $113.9 million to $163.4 million in fiscal 2024, compared to $49.5 million in the prior year.
Cash provided by operating activities during fiscal 2022 was primarily due to a decrease in merchandise inventory levels and the collection of $176.0 million in tax refunds, partially offset by the impact of our net loss.
Cash provided by operating activities during fiscal 2024 was primarily due to the impact of our net income, a decrease in merchandise inventories, and a decrease in receivables, partially offset by a decrease in accounts payable and accrued liabilities.
Income Tax Expense, Net We recognized income tax expense of $6.4 million in fiscal 2023, compared to income tax expense of $11.0 million in fiscal 2022. We recognized an effective tax rate of 48.9% in fiscal 2023 compared to an effective tax rate of (3.6)% in fiscal 2022.
Income Tax Expense, Net Income tax expense, net decreased $0.5 million to $5.9 million in fiscal 2024, compared to $6.4 million in the prior year. The company reported an effective tax rate of 4.3% in fiscal 2024 down from 48.9% in the prior year.
Net Sales The following table presents net sales by significant product category: Fiscal 2023 Fiscal 2022 Change Net Sales Percent of Net Sales Net Sales Percent of Net Sales $ % Hardware and accessories $ 2,996.8 56.8 % $ 3,140.0 53.0 % $ (143.2) (4.6) % Software 1,522.0 28.9 1,822.6 30.7 (300.6) (16.5) Collectibles 754.0 14.3 964.6 16.3 (210.6) (21.8) Total $ 5,272.8 100.0 % $ 5,927.2 100.0 % $ (654.4) (11.0) % 20 The following table presents net sales by reportable segment: Fiscal 2023 Fiscal 2022 Change Net Sales Percent of Net Sales Net Sales Percent of Net Sales $ % United States $ 3,429.4 65.1 % $ 4,093.0 69.1 % $ (663.6) (16.2) % Canada 292.5 5.5 344.1 5.8 (51.6) (15.0) Australia 522.5 9.9 588.7 9.9 (66.2) (11.2) Europe 1,028.4 19.5 901.4 15.2 127.0 14.1 Total $ 5,272.8 100.0 % $ 5,927.2 100.0 % $ (654.4) (11.0) % During fiscal 2023, total net sales decreased 11.0% compared to the prior year, with net sales in our United States, Canada and Australia segments decreasing by 16.2%, 15.0% and 11.2%, respectively, compared to the prior year, and net sales in our Europe segment increasing by 14.1% compared to the prior year.
Net Sales The following table presents net sales by significant product category: Fiscal 2024 Fiscal 2023 Change Net Sales Percent of Net Sales Net Sales Percent of Net Sales $ % Hardware and accessories $ 2,099.7 54.9 % $ 2,996.8 56.8 % $ (897.1) (29.9) % Software 1,005.4 26.3 1,522.0 28.9 (516.6) (33.9) Collectibles 717.9 18.8 754.0 14.3 (36.1) (4.8) Total $ 3,823.0 100.0 % $ 5,272.8 100.0 % $ (1,449.8) (27.5) % The following table presents net sales by reportable segment: Fiscal 2024 Fiscal 2023 Change Net Sales Percent of Net Sales Net Sales Percent of Net Sales $ % United States $ 2,575.7 67.4 % $ 3,429.4 65.1 % $ (853.7) (24.9) % Canada 204.3 5.3 292.5 5.5 (88.2) (30.2) Australia 404.9 10.6 522.5 9.9 (117.6) (22.5) Europe 638.1 16.7 1,028.4 19.5 (390.3) (38.0) Total $ 3,823.0 100.0 % $ 5,272.8 100.0 % $ (1,449.8) (27.5) % During fiscal 2024, total net sales decreased 27.5% compared to the prior year, with net sales in our Europe, Canada, United States, and Australia segments decreasing by 38.0%, 30.2%, 24.9%, and 22.5%, respectively, compared to the prior year.
Financing activities In fiscal 2023, cash flows used in financing activities were an outflow of $11.6 million compared to an outflow of $7.9 million in fiscal 2022.
Financing activities In fiscal 2024, cash provided by financing activities were $3,443.0 million, compared to cash used in financing activities of $11.6 million in fiscal 2023.
After giving effect to this notice, availability under the 2026 Revolver would have been $225.7 million as of February 3, 2024. 22 Separate from the 2026 Revolver, we maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral.
We maintain uncommitted facilities with certain lenders that provide for the issuance of letters of credit and bank guarantees, at times supported by cash collateral. As of February 1, 2025, we had letters of credit and other bank guarantees outstanding in the amount of $7.3 million.
The decline in SG&A expenses in fiscal 2023 compared to the prior year is primarily attributable to a $316.3 million reduction in labor-related costs, consulting services costs, and marketing expenses, driven by our continued focus on cost reduction efforts. SG&A expenses also declined in fiscal 2023 due to a one-time digital asset impairment of $33.7 million recognized in fiscal 2022.
The decrease in SG&A expenses in fiscal 2024 compared to the prior year is primarily attributable to a $157.2 million reduction in labor-related costs, consulting services costs, and marketing expenses, driven by our continued focus on cost reduction efforts. Store related costs decreased $30.7 million in the current year in connection with store closures, primarily in our European segment.
In November 2021, we entered into a credit agreement for a secured asset-based credit facility comprised of a $500 million revolving line of credit which matures in November 2026 ("2026 Revolver"). The 2026 Revolver includes a $50 million swing loan revolving sub-facility, a $50 million Canadian revolving sub-facility, and a $250 million letter of credit sublimit.
As of February 1, 2025, $16.9 million remains outstanding. In November 2021, we entered into a credit agreement for a secured asset-based credit facility comprised of a $500 million revolving line of credit maturing in November 2026 ("2026 Revolver").
Cash used in investing activities during fiscal 2022 was primarily due to purchases of marketable securities and investments in technology and supply chain efficiencies, partially offset by proceeds from the sale of digital assets.
Cash provided by investing activities during fiscal 2024 was primarily attributable to proceeds from the maturity of marketable securities and proceeds from the sale of property and equipment in our Europe segment, partially offset by purchases of marketable securities and routine capital expenditures.
On December 5, 2023, the Board of Directors approved a new Investment Policy. Subsequently, on March 21, 2024, the Board of Directors amended the new Investment Policy. See "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Investments” for more information.
On March 18, 2025, the Board approved a revised Investment Policy. See "Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Investments” for more information. Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations.
Gross Profit Gross profit decreased $77.9 million or 5.7%, in fiscal 2023 compared to the prior year, and gross profit as a percentage of net sales increased to 24.5% in fiscal 2023 compared to 23.1% in the prior year.
The decrease in consolidated net sales in fiscal 2024 compared to the prior year was primarily attributable to a $516.6 million or 33.9% decline in the sales of software, a $897.1 million or 29.9% decline in the sale of hardware and accessories, and a $36.1 million or 4.8% decline in the sales of collectibles. 24 Gross Profit Gross profit decreased $180.3 million or 13.9% in fiscal 2024 compared to the prior year, and gross profit as a percentage of net sales increased to 29.1% in fiscal 2024 compared to 24.5% in the prior year.
In fiscal 2021, six separate unsecured term loans held by our French subsidiary, Micromania SAS, for a total of €40.0 million were extended for five years. As of February 3, 2024, $28.5 million remains outstanding.
However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value. In fiscal 2021, six separate unsecured term loans held by our French subsidiary, Micromania SAS, for a total of €40.0 million were extended for five years.
As of February 3, 2024, the investment portfolios' aggregate balance was $280.2 million, of which $277.6 million are recognized in marketable securities and $2.6 million are recognized in cash and cash equivalents on our Consolidated Balance Sheets.
As of February 1, 2025, the investment portfolios' aggregate balance was $18.0 million, all of which have an original maturity in excess of 90 days and less than one year and are classified as marketable securities on our Consolidated Balance Sheets.
While the Company does not expect the adoption of the Pillar Two framework to have a material impact on its effective tax rate, the Company continues to evaluate additional guidance released by the OECD, along with the pending and adopted legislation in each of the countries in which we operate.
The Company will continue to evaluate additional guidance released by the OECD, along with the pending and adopted legislation in each of the countries in which we operate. Additionally, a valuation allowance is recorded against a deferred tax asset if it is not more likely than not that the asset will be realized.
STORE COUNT INFORMATION The following table presents the number of stores by segment as of the end of fiscal 2023 compared to the end of fiscal 2022.
As part of this collaboration, GameStop became an authorized PSA dealer, and PSA provides autograph authentication and grading services for trading cards through select GameStop stores across the United States. STORE COUNT INFORMATION The following table presents the number of stores by segment as of the end of fiscal 2024 compared to the end of fiscal 2023.
Our strategic plan is designed to optimize our core business and achieve profitability. GameStop is actively focused on the below objectives: • Establish Omnichannel Retail Excellence. We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms.
We aim to be the leading destination for games and entertainment products through our stores and ecommerce platforms. • Achieve Profitability. During fiscal 2024, we continued to optimize our cost structure to align with our current and anticipated future needs.
The decrease in gross profit is primarily attributable to the decrease in net sales, as further outlined in the net sales commentary, partially offset by a $83.5 million or 42.2%, decrease in freight expenses resulting from a decline in net sales and added cost optimizations.
The decrease in gross profit in fiscal 2024 compared to the prior year is primarily attributable to the decrease in net sales, as further outlined in the net sales commentary.
As of February 3, 2024, we had total unrestricted cash and cash equivalents on hand of $921.7 million, marketable securities of $277.6 million, and an additional $475.7 million of available borrowing capacity under our revolving credit facilities.
As of February 1, 2025, we had total unrestricted cash and cash equivalents on hand of $4,756.9 million and marketable securities of $18.0 million.
Removed
To accomplish this, we are taking steps to ensure we are a fast and convenient solution for our customers. This includes increased product availability across all channels, faster fulfillment through ship from store offerings, and a further improved customer service experience. • Achieve Profitability.
Added
BUSINESS PRIORITIES Our strategy involves (i) using our cash and other sources of liquidity to maximize shareholder value, including through potential investment and/or acquisition opportunities and (ii) optimizing our retail business to achieve profitability. Investment Policy On March 18, 2025, the Board of Directors of the Company (the "Board") unanimously authorized a revised investment policy (the “Investment Policy”).
Removed
During fiscal 2023, we continued to optimize our cost structure to align with our current and anticipated future needs. We will continue to focus on cost containment as we look to operate with increased efficiency. • Leverage Brand Equity to Support Growth. GameStop has many strengths and assets, including strong household brand recognition and a significant store network.
Added
The Investment Committee regularly reviews risks related to the Company's investment portfolio, including concentration risk. When allocating cash to various investment opportunities and considering related investment risk, the Investment Committee considers market-based factors, including risk adjusted after-tax yields. When reviewing concentration risk, the Investment Committee considers the liquidity needs of the Company, among other things.
Removed
We believe these efforts are important aspects of our continued business to enable long-term value creation for our shareholders. As part of our efforts to achieve sustained profitability, we continue to evaluate our portfolio of assets to validate their strategic and financial fit and to eliminate redundancies. During fiscal 2023, we exited our operations in Ireland, Switzerland, and Austria.
Added
Investments are made in accordance with the guidelines in the Investment Policy that is reviewed at least annually, with oversight conducted by senior officers and the Investment Committee.
Removed
Subsequently, on March 21, 2024, the Board of Directors unanimously authorized revisions to the Investment Policy to codify the role of certain members of the Board of Directors in overseeing the Company’s investments.
Added
The overall goals of the Investment Policy are to provide sufficient liquidity to meet the day-to-day financial obligations of the Company, and to optimize investment returns within the guidelines of the Investment Policy. Permissible investment instruments include cash and cash equivalents (e.g. bank obligations, money market funds, and commercial paper), fixed income securities (e.g. obligations of the U.S.
Removed
The Company’s investments must conform to guidelines set forth in the revised Investment Policy or be approved by either the Investment Committee, by unanimous vote, or the full Board of Directors, by majority vote. Additionally, the Investment Committee may recommend to the Board of Directors further modifications to the Investment Policy from time to time.
Added
Treasury and U.S. Government, tax exempt obligations of states and municipalities, and corporate bonds/notes), equity securities (limited to those listed on the New York Stock Exchange (“NYSE”), NYSE American, NYSE Arca or the Nasdaq Stock Market and in compliance with the listing standards of the applicable exchange) and certain crypto-currencies, including Bitcoin.
Removed
The decrease in consolidated net sales in fiscal 2023 compared to the prior year was primarily attributable to a $300.6 million or 16.5%, decline in the sales of software, a $210.6 million or 21.8%, decline in the sales of collectibles, and a $191.1 million or 11.8%, decline in the sales of video game accessories, partially offset by a $47.9 million or 3.2%, increase in the sales of new hardware driven in part by decreased supply constraints in our Europe segment in the current year.
Added
Individual exceptions to the Investment Policy may only be made by the unanimous agreement of the Investment Committee or, if the Investment Committee is unable to reach unanimous agreement on such exception, by the Board.
Removed
Store related costs decreased $12.3 million in the current year in connection with store closures, primarily in our European segment. Asset Impairments Asset impairments related to store-level assets increased $2.1 million or 77.8%, in fiscal 2023 compared to the prior year.
Added
On March 25, 2025 we announced that, as part of our revisions to the Investment Policy, the Board approved the addition of Bitcoin as a treasury reserve asset, whereby a portion of our cash or future debt and equity issuances may be invested in Bitcoin.
Removed
Interest Income, Net During fiscal 2023, we recognized net interest income of $49.5 million compared to net interest income of $9.5 million in fiscal 2022. The impact is primarily attributable to interest income increasing as a result of higher returns on invested cash, cash equivalents and marketable securities.
Added
We will continue to focus on cost containment as we look to operate with increased efficiency. • Expand Our Addressable Market. We continue to explore ways to increase the size of our addressable market through new product and service offerings, including offerings in the graded collectibles category.
Removed
This decrease in income tax expense is primarily due to the settlement of positions with certain taxing authorities and reductions in unrecognized tax benefits as a result of the lapse of applicable statute of limitations.
Added
Expansion of these categories provides the Company with margin accretive opportunities that can assist the Company in achieving its profitability goals. In connection with our efforts to achieve sustained profitability, we continue to evaluate our international assets and operations, to determine their strategic and financial fit and to eliminate redundancies and underperforming assets.
Removed
Gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s results of operations. However, the amount of gain or loss on marketable securities for any given period may have no predictive value and variations in amount from period to period may have no analytical value.
Added
To date we have taken the following steps as part of this ongoing effort: • During fiscal 2023, we exited our operations in Ireland, Switzerland, and Austria. • During the fourth quarter of fiscal 2024 we closed down our store operations in Germany • During the fourth quarter of fiscal 2024, we sold our Italian subsidiary, GameStop Italy S.r.l, which operated our Italian stores and e-commerce business.
Removed
As of February 3, 2024, based on our borrowing base and amounts reserved for outstanding letters of credit, total availability under the 2026 Revolver was $475.7 million, with no outstanding borrowings. As of February 3, 2024, outstanding standby letters of credit were $5.1 million.
Added
The stores in Italy will continue to operate under the GameStop brand for a transition period of up to six months. We recognized impairment expense of $7.6 million on the assets and a loss of $0.5 million during fiscal 2024 in connection with the sale.
Removed
As of February 3, 2024, we had outstanding letters of credit and other bank guarantees in the amount of $10.1 million outside of the 2026 Revolver, of which $8.8 million were supported by cash collateral and are included in restricted cash.
Added
The proceeds and loss on the sale were immaterial to our financial results. • On February 18, 2025, we announced a plan to pursue a sale of our operations in France and Canada We have also initiated a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance.
Removed
The decrease in merchandise inventory was due to improved inventory management, including a more disciplined purchasing strategy, more advantageous product mix ahead of the fiscal 2022 holiday season, and an improvement in supply chain constraints.
Added
This review, among other things, resulted in the closure of 590 stores in the United States in fiscal 2024. While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate closing a significant number of additional stores in fiscal 2025.
Removed
Investing activities In fiscal 2023, cash flows used in investing activities were an outflow of $33.2 million compared to an outflow of $222.7 million in fiscal 2022.
Added
We also continue to explore ways to increase the size of our addressable market through new product and service offerings, including offerings in the graded collectibles category. On October 15, 2024, GameStop announced that it had entered into a collaboration with Collectors Holdings, Inc., through its Professional Sports Authenticator division ("PSA").
Removed
Our valuation allowances decreased to $355.2 million as of February 3, 2024, primarily due to the reduction of deferred tax assets resulting from the wind-down of our operations in Ireland, utilization of deferred tax assets, and the settlement of a U.S. federal tax audit.
Added
The increase in gross profit as a percentage of net sales is primarily due to a shift to higher margin product categories, specifically collectibles and preowned hardware and accessories, as well as improvements in inventory management.
Added
Sales of c ollectibles as a percentage of total net sales increased to 18.8% in the current year, compared to 14.3% in the prior year. Sales of pre-owned hardware and accessories as a percentage of total net sales increased to 11.5% in the current year, compared to 9.3% in the prior year.
Added
The increase in SG&A as a percentage of net sales is primarily attributable to the decrease in net sales relative to the decrease in SG&A expenses, as further outlined in the net sales commentary. Asset Impairments Asset impairments related to store-level assets increased $4.9 million to $9.7 million in fiscal 2024, compared to $4.8 million in the prior year.
Added
The increase is primarily attributable to an increase in cash and cash equivalents resulting from the issuance and sale of shares of our Class A Common Stock under the ATM Transactions, as well as higher interest rates in the current year compared to the prior year.
Added
This decrease in effective tax rate is primarily attributable to a $113.9 million increase in interest income and a corresponding $24 million increase in statutory tax expense, offset by tax benefits recognized in the current year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+1 added−2 removed2 unchanged
Biggest changeWe are exposed to counterparty credit risk on all of our derivative financial instruments and cash equivalent investments. We manage counterparty risk according to the guidelines and controls established under comprehensive risk management and investment policies. We continuously monitor our counterparty credit risk and utilize a number of different counterparties to minimize our exposure to potential defaults.
Biggest changeWe manage counterparty risk according to the guidelines and controls established under comprehensive risk management and investment policies. We continuously monitor our counterparty credit risk and utilize a number of different counterparties to minimize our exposure to potential defaults. We do not require collateral under derivative or investment agreements. 30
The aggregate fair value of the forward exchange contracts as of 25 February 3, 2024 and January 28, 2023 was a net liability of zero and $5.9 million, respectively, as measured by observable inputs obtained from market news reporting 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.
The aggregate fair value of the forward exchange contracts as of February 1, 2025 and February 3, 2024 was a net liability of zero, respectively, as measured by observable inputs obtained from market news reporting 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.
We recognized a gain of $2.0 million and a gain of $7.3 million in SG&A expenses in our Consolidated Statement of Operations related to derivative instruments for the fiscal years ended February 3, 2024 and January 28, 2023, respectively.
We recognized a gain of $0.9 million and a gain of $2.0 million in SG&A expenses in our Consolidated Statement of Operations related to derivative instruments for the fiscal years ended February 1, 2025 and February 3, 2024, respectively.
Removed
A hypothetical strengthening or weakening of 10% in the foreign exchange rates underlying the foreign currency contracts from the market rate as of February 3, 2024 would result in a gain of $5.9 million or a loss of $4.8 million in value of the forward exchange contracts. We do not use derivative financial instruments for trading or speculative purposes.
Added
As of February 1, 2025, we do not have any outstanding derivatives or contracts, and we do not have foreign exchange risk exposures due to foreign exchange derivatives or contracts. We do not use derivative financial instruments for trading or speculative purposes. We are exposed to counterparty credit risk on all of our derivative financial instruments and cash equivalent investments.
Removed
We do not require collateral under derivative or investment agreements. 26

Other GME 10-K year-over-year comparisons