RadioShack Q2 Loss Widens, Dorvin Lively Steps Down As CFO

(RTTNews) - Consumer electronics retailer RadioShack Corp. (RSH) on Tuesday reported a loss for the second quarter that widened from last year, reflecting the impact of promotional activity and store closures. Loss per share was wider than analysts' estimates. However, the company recorded comparable store sales growth for the first time since 2010.

RadioShack also said that Chief Financial Officer Dorvin Lively has resigned from the company to pursue a new career opportunity. Holly Etlin, managing director at AlixPartners, has been named interim chief financial officer. RadioShack added that it is undertaking a search for a permanent chief financial officer.

The company, which has been posting quarterly losses for sometime now, has said it is rolling out a new brand image, and will see changes in branding and advertising soon.

Commenting on the quarterly results, Joseph Magnacca, chief executive officer of RadioShack, said, "While the second quarter presented a number of challenges, it is noteworthy that we generated comparable store sales growth for the first time since 2010, and increased sales for the sixth consecutive quarter in our high-margin signature platform of products."

RadioShack's second-quarter net loss widened to $53.1 million or $0.53 per share from $21 million or $0.21 per share in the year-ago period. On average, seventeen analysts polled by Thomson Reuters expected the company to report loss of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter was 37.2 percent of net sales, compared to 40.1 percent in the prior-year period. Gross margin performance was negatively impacted by the company's planned promotional strategy this quarter, which included testing different promotions and clearance events.

Net sales and operating revenues for the quarter were $844.5 million, down slightly from $848.6 million in the same period last year. Analysts had a consensus revenue estimate of $815.84 million.

The decline in sales was driven by the impact from closed stores, offset by comparable store sales growth of 1.3 percent.

Net sales and operating revenues at U.S. RadioShack company-operated stores edged down less than 1 percent to $768.7 million, while operating income decreased 45 percent to $39.4 million.

Magnacca added, "Looking ahead, we expect the turnaround to take several quarters, and during that time our results may vary from quarter to quarter as we make strategic changes to improve our long-term financial performance."

In a separate statement, health club franchise Planet Fitness said that Dorvin Lively has been named chief financial officer of the company. He will report directly to Planet Fitness' chief executive officer, Chris Rondeau.

RSH closed Monday's trading at $2.93. In Tuesday's pre-market trades, the stock is up $0.07 or 2.39 percent to $3.88.