Fort Worth, Texas – Continued margin declines in its post-paid mobile business contributed to a $47 million loss in RadioShack’s third quarter.
The chain also reported a $59 million operating loss compared with operating income of $10.6 million last year.
Net sales for the three months, ended Sept. 30, declined 3 percent to $1 billion, and same-store sales slipped 1.6 percent.
In a statement, interim CEO Dorvin Lively said the company is focused on stabilizing the gross margin and profitability of its post-paid mobile business, although improvement won’t come overnight. “We have a focused set of initiatives that we believe will accomplish this goal; however, it will take some time to fully address the challenges this business faces,” he said.
Lively, formerly RadioShack’s chief financial officer, was tapped to serve as interim CEO following last month’s departure of chief executive Jim Gooch after 16 months in the job.
Lively noted that the chain’s accessories and prepaid mobile businesses are improving and growing, and that its balance sheet is strong and its financial position solid, with total liquidity of $938 million, including $175 million of new financing.
Nevertheless, the wider than expected loss, and the management vacuum left by the departures of Gooch and chief merchandising officer Scott Young in June, sent RadioShack’s shares sharply lower in early morning trading.