RadioShack reports bigger first-quarter loss as sales continue to decline [Fort Worth Star-Telegram :: ]
(Fort Worth Star-Telegram (TX) Via Acquire Media NewsEdge) June 10--FORT WORTH -- RadioShack Corp. reported another big loss for the first quarter of 2014 as sales declined at double-digit rates.
The Fort Worth-based consumer electronics retailer said today its loss from continuing operations was $98.3 million for the 13 weeks ended May 3, far wider than $23.3 million a year ago.
Net sales declined by 13.2 percent to $736.7 million and comparable store sales, at stores open at least a year, fell 14 percent.
Chief Executive Officer Joseph Magnacca, who has been trying to lead a turnaround since taking the helm early last year, said the disappointing results were affected by "an industry-wide decline in consumer electronics and a soft mobility market" weakened by "lackluster consumer demand" in new cell phones.
The company was also stymied in the first quarter by its lenders' rejection of a plan to close as many as 1,100 of its 4,300 company-owned stores this year. The company now plans to close just 200 stores, its limit under existing loan covenants.
Despite the challenges, Magnacca said he believes that the company is making progress on its turnaround strategy, and is building a pipeline of new products "that will bring differentiation and newness to our stores in the form of high-margin private brand and exclusive items."
The company plans to remodel 100 stores that will adapt designs from a string of concept stores rolled out last year, which have shown "strong sales growth." Magnacca said RadioShack is also looking at ways to reduce expenses, and has "taken steps to lower our corporate headcount, leverage technology, and reduce discretionary expenses."
Last week, the company unveiled a partnership with PCH International, a product development company that works with startups to bring new technology products to market. Under the deal, PCH clients will deliver unique products to RadioShack stores starting this year.
The company said it ended the quarter with total liquidity of $423.7 million, including $61.8 million in cash and cash equivalents.
Executives were scheduled to speak with Wall Street analysts on a conference call this morning.
Steve Kaskovich, 817-390-7773 Twitter: @stevekasko
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