In the era of the Internet, category-killer retail stores, and mega-stores, RadioShack
With the release of RadioShack's fourth-quarter results, it seems customers are looking elsewhere. Sales increased about 5% to $1.67 billion. However, net income was $49.5 million, or $0.36 per share, down from $130.9 million, or $0.81 per share, in the year-ago period.
On the conference call, RadioShack indicated that sales were strong for low-margin products, while sales were weak for high-margin products. This rattled investors, and the stock plunged 8% to $19.08.
In addition, RadioShack wrote off $62 million in inventory in the fourth quarter. This was mostly the result of switching over from Verizon
What's the plan to get things back on track? RadioShack will close anywhere from 400 to 700 stores, along with two distribution centers. Currently, the company has about 7,000 stores.
RadioShack says it will also focus more on "faster-moving merchandise within higher growth categories." Yes, that would be wonderful, but it's eluded the company thus far. Why should we believe that things will be different now?
Besides, the company's CEO, David Edmondson, resigned yesterday. As discussed by my Foolish colleague Rick Munarriz, he lied about his academic background and will also need to appear for a court hearing for a DWI (driving while intoxicated) charge, since he already had two prior charges.
The big question: How does RadioShack stand out? That will certainly be the next CEO's huge challenge, and shareholders' main frustration.
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Fool contributor Tom Taulli does not own shares mentioned in this article.