RadioShack Posts Wider Q1 Loss As Comps Plunge

(RTTNews) - Consumer electronic goods retailer RadioShack Corp. (RSH) reported Tuesday a wider net loss in its first quarter as comparable-store sales fell 14 percent, hurt by traffic declines and soft performance in the mobility business.

In pre-market activity, RadioShack shares are losing $0.29 or 18.83 percent, and trading at $1.25.

For the first quarter, net loss was $98.3 million or $0.97 per share. In the prior year, the company's net loss was $28 million or $0.28 per share, and loss from continuing operations was $23.3 million or $0.23 per share.

On an adjusted basis, loss was $99.3 million or $0.98 per share, compared to prior year's adjusted loss from continuing operations of $26.5 million or $0.26 per share. On average, 13 analysts polled by Thomson Reuters expected loss per share of $0.52 for the quarter. Analysts' estimates typically exclude one-time items.

Operating loss for the quarter widened significantly to $81 million from $10.3 million last year. Adjusted operating loss was $82 million, excluding certain non-cash and one-time reserves on inventory and impairments of fixed assets, compared to $11.3 million last year.

Consolidated gross profit fell to $268.7 million or 36.5 percent of net sales, from prior year's $340.9 million or 40.2 percent of net sales. The company attributed the decline in gross profit and gross margin rate primarily to aggressive price competition in current postpaid and prepaid handset offerings.

Quarterly total net sales and operating revenues were $736.7 million, down from $848.4 million reported a year ago. Analysts estimated revenues of $767.45 million for the quarter.

Chief Executive Officer Joseph Magnacca stated, "Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter. In particular, 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. This resulted in disappointing sales and gross margin performance."

The company said it closed 22 stores in fiscal 2015, and expects to close up to 200 stores.