Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=231288
Story Retrieval Date: 4/17/2015 11:16:25 AM CST
RadioShack Corp. stock plummeted 10.4 percent Tuesday on widened losses in its consumer electronics retail business. The retailer, with 36 Chicago locations, saw sales slip for the ninth consecutive quarter, as consumers scour for the best deals among cell phone carriers and retailers.
In the quarter ended May 3, losses for the Fort Worth, Texas-based retailer widened to $98.3 million, or 97 cents per diluted share, compared with $28 million, or 28 cents per diluted share, in the same quarter a year ago. Analysts surveyed by Bloomberg predicted a 52-cent loss.
Sales declined 13.2 percent to $736.7 million from $848.4 million.
RadioShack attributed increased losses to aggressive price competition for handset offerings and soft performance in mobility sales.
In a conference call Tuesday, CEO Joseph Magnacca said the company is vying for ways to attract customers in an increasingly competitive market.
“In particular, our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers,” Magnacca said.
On Tuesday, RadioShack said it would cut costs by leveraging corporate jobs and close 200 stores during the this fiscal year.
In a research note released Wednesday, Analyst Charles Allen of Bloomberg Industries said the company is lacking innovation.
“Consumer electronics inventory is close to being perishable, because of the pace of product development,” Allen said. “Retailers without new products tend to lose customers.”
In New York Stock Exchange trading, RadioShack shares closed at $1.38, down 16 cents.