GameStop Inc. (GME) stock plunged during after-hour session. Here’s the update

• Despite a nearly 12% drop in GME’s global store base given the strategic de-densification attempts and continued store shutdowns all over Europe due to the COVID-19 pandemic, total sales increased 25.1 percent to $1.277 billion in the fiscal 2021 first quarter, relative to $1.021 billion in the fiscal 2020 first quarter.

• When compared to the first quarter of fiscal 2020, gross margin was 25.9%, down 180 basis points.
• Selling, general, and administrative expenditures were recorded at $370.3 million, down $16.2 million, or 4.2 percent, from $386.5 million in the first quarter of fiscal 2020.
• Operating loss of $40.8 million, down from $108.0 million in the first quarter of fiscal 2020. Adjusted operating loss of $21.6 million, down from $98.8 million in Q1 2020.
• In the fiscal 2021 first quarter, GME lost $66.8 million, or $1.01 per diluted share, relative to a loss of $165.7 million, or $2.57 per diluted share, in Q1 2020. Adjusted total loss of $29.4 million, or $0.45 per diluted share, versus $157.6 million, or $2.44 per diluted share, in the first quarter of fiscal 2020.
• Adjusted EBITDA of $0.7 million, a decrease from $75.5 million in the first quarter of fiscal 2020.
• In Q1 fiscal 2021, income tax expense was $1.3 million, relative to $50.4 million in the first quarter of fiscal 2020.

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Future Expectations

At this time, GameStop is suspending guidance; nonetheless, it thinks that total net sales is the most suitable indicator to use to assess performance. GME’s second-quarter sales trends have been strong, with total sales in May growing by over 27% over the previous year.