GameStop Corp. (NYSE:GME) Q2 2022 Earnings Conference Call September 7, 2022 5:00 PM ET

Company Participants

Matt Furlong - Chief Executive Officer

Conference Call Participants

Operator

Good afternoon, and welcome to the GameStop Second Quarter 2022 Earnings Conference Call. Please note that certain statements made during the call constitute forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Act of 1995 as amended.

Such forward-looking statements are subject to both known and unknown risks and uncertainties that could cause actual results to differ materially from segments. These risks and uncertainties are described in the company's earnings press release and its filings with the SEC. The forward-looking statements today are made as of the date of this call and the company does not undertake any obligation to update the forward-looking statements.

I will now turn the call over to GameStop's CEO, Matt Furlong.

Matt Furlong

Thank you, and good afternoon, everyone. I want to begin by reiterating the deep appreciation we have for our stockholders' unrivaled enthusiasm, passion, and support. As we work to transform GameStop, these remain unique tailwinds for us, ones we always recognize and value.

I also want to take this opportunity to thank everyone across the organization for bringing continued focus and intensity to our mission, particularly during an active Q2 that represented a transitional quarter for us.

Before covering the quarter's specific initiatives and results, I want to provide a high-level update on where we've been and where we're looking to go as our transformation progresses.

When our Board began turning over early last year, GameStop was saddled with significant debt, decaying systems, limited employee depth, and a host of other issues. This is why we spent the second half of 2021 and the first half of 2022 making up for years of underinvestment in modernizing the business.

The upshot is we now have a more diversified product catalog, strengthened fulfillment network, improved tech stack and e-commerce presence, and fortified corporate infrastructure. Thanks to these improvements, including our SAP implementation, we are able to start focusing on a new set of priorities that include achieving profitability, launching proprietary products, leveraging our brand in new ways, and investing further in our stores.

During Q2, we took steps to support each of these new priorities. With respect to pursuing profitability in the coming quarters, we rightsized corporate expenditures and headcount following a period in which the company had hired more than 600 new individuals. These actions, combined with the elimination of one-time expenses in Q1, contributed to a 14.3% reduction in SG&A.