RadioShack Misses and Shares Slump
FORT WORTH, Texas (AP) — RadioShack's first-quarter loss widened to $43.3 million as demand for electronics at the beleaguered retailer continues to decline.
Even measured against the diminishing expectations of analysts that follow the company, revenue numbers were particularly bad, and shares slumped more than 7 percent before the opening bell.
CEO Joseph Magnacca said work to revamp stores and revive the brand will be underway within weeks as the company struggles to fend off further raids on customers from online retailers like Amazon.com and eBay.com.
The Fort Worth, Texas, company's loss amounted to 43 cents per share, compared with a loss of $8 million, or 8 cents per share, in the same quarter last year. Excluding losses from the company's Target mobile centers, which all closed by the end of the quarter, RadioShack's loss amounted to 35 cents per share.
Wall Street was actually looking for a profit of 3 cents, and a lot more revenue than the $849 million RadioShack reported Tuesday, which was a 7 percent decline from last year.
Wall Street had expected total revenue of $1.3 billion, according to a poll by FactSet.
Magnacca was brought in late last year after CEO James Gooch stepped down. He announced this month some key hires, a new chief marketing officer and a new senior vice president of store concepts, as the company tries to win back customers who have strayed.
"I know we have some gaps and improvements that need to take place, Magnacca said. "We are rolling out a new brand image, and you will start seeing changes in our branding and advertising soon. For our physical stores, work is underway and will begin with remodeling strategic New York City locations with a new look and feel over the next few weeks."
RadioShack has to do something to head off falling comparable store sales, which declined 5.7 percent this quarter, compared with the same period last year.
That is a troubling sign for any retailer as the measurement removes the volatility of stores that were recently opened or closed. It provides a peek at the overall health of a brand, and trading in company shares before the market opened showed just how much investors did not like what they saw.
Shares of RadioShack Corp. fell 23 cents to $2.91.