RadioShack Corporation Reports Dismal Mobile Sales; Shares Plunge

RadioShack (NYSE: RSH  ) reported results for the first quarter of its fiscal year 2015 this morning, falling far short of analyst targets across the board. Shares plunged as much as 22% lower in pre-market trading.

Wall Street was looking for a $0.52 net loss per share and $767 million in net sales. RadioShack reported an adjusted $0.98 loss per share, and sales stopped at $737 million. On a year-over-year basis, sales fell 13% while losses per share nearly quadrupled. Comparable-store sales declined by 14%.

Source: RadioShack.

To explain the tough results, RadioShack pointed to declining in-store foot traffic and "aggressive" price battles in the market for mobile devices.

This is the first report under RadioShack's new fiscal year calendar. The company has moved away from a simple calendar year, moving the end of the fiscal year up to the end of January. Management calls this a "traditional 52-week retail calendar," in use by "the majority of retailers today."

In the "stub period", from Jan. 1 to Feb. 1, RadioShack saw sales falling 13% from the comparable one-month period of 2013. Net losses increased by 34%.

"Our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers," said RadioShack CEO Joseph Magnacca in a prepared statement.

"Even in this environment, we are making progress on our turnaround strategy," Magnacca continued. "Our concept stores continue to drive strong sales growth, and we have begun to execute our 100-store remodel program to scale the successful components of our concept stores across our network."

The company closed 22 stores in the first quarter and expects to shutter another 200 locations by the end of the year. RadioShack operates 4,250 stores in America these days, alongside 258 Mexican locations and 912 assorted outlets worldwide.

Discover a top stock pick for 2014
Every year, The Motley Fool's chief investment officer hand-picks 1 stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 10, 2014, at 12:01 PM, awareadams wrote:

    I live in Chicago and and for years have visited some of the many Radio Shack sites on the north side of the city. The sites are located in excellent areas that are readily available for retain customer use and convenience. The Radio Shack employees are always helpful and courteous.

    So what is the problem with this company? The answer is simple and easy: the quality of the items it sells are just a few levels above "junk". The company wastes its sites and good employees by loading then with inferior quality items at relatively high prices. It's almost as if the management wants to "scim" customers with items of inferior quality and less than cheap prices.

    This company and correct its problems by changing its "mindset" and stocking name brands at fair prices. It should look at Wal-Mart and compete with this company: selling quality name brands at fair prices.

    With the advantage of the strategic locations of its many stores, and quality employees, if the comapny stocked name brands at good prices it could do very well.

    The moral: a retail seller cannot fool customers day-in-day-out with junk quality. Ware Adams, Chicago.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2988539, ~/Articles/ArticleHandler.aspx, 10/24/2014 5:25:13 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement