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RadioShack Posts $8M Q1 Loss

4/24/2012 09:23:10 AM Eastern

Fort Worth, Texas - RadioShack said early debt retirement and a
mix shift to lower margin smartphones and tablets led to an $8 million loss
during its first fiscal quarter, ended March 31.

Net sales and operating revenues, which include results from Target's
RadioShack-operated mobile centers, slipped 0.9 percent to $1 billion, and
comp-store sales decreased 4.2 percent during the period.

The chain said the sales decline was most pronounced at its
company-operated stores and was partially offset by the addition of 610 Target
mobile centers during the quarter.

The comp-store decline was primarily attributable to lower Sprint
postpaid wireless sales, as well as decreased sales of prepaid wireless
handsets, laptops and home entertainment accessories. The decrease was partially
offset by higher postpaid wireless sales of AT&T, as well as sales of
tablet devices, tablet accessories, headphones and a net increase in Verizon
Wireless postpaid sales at U.S. RadioShack company-operated stores, compared
with its former T-Mobile postpaid business.

In a statement, president/CEO Jim Gooch said, "As we anticipated,
the first quarter was extremely challenging. While our results were
disappointing, we are working quickly to drive top line growth and expand
margins," and are seeing progress from initiatives the company began
implementing last year, including an ongoing shift to mobility; "reclaiming
relevance" and maximizing profits in accessories; and pursuing incremental
growth opportunities domestically and abroad.

Gooch added that the company is "acting decisively" to improve its
marketing with a greater focus on mobility, and will continue to capitalize on its
success in expanding its high-gross margin accessories assortment while pursuing
new "international ventures and relationships."

Broken out by category, mobility sales decreased 5.2 percent,
driven primarily by lower postpaid wireless sales from Sprint. Accessory sales
increased 0.7 percent, a significant improvement in trend, driven by higher
sales of tablet accessories, headphones, wireless accessories and service
agreements, the company said. Expanded product assortments, improved in-store
execution and targeted marketing programs contributed to the sales trend
improvement.

CE sales decreased 24.1 percent in the first quarter due
primarily to "ongoing difficult industry trends in these product categories,"
the company said.