RadioShack Posts $8M Q1 Loss

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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.


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