The struggling American franchise of electronics retail
), is offering customers a $50 discount for in-store Samsung
Galaxy S 5 pre-orders. The company will fill in the pre-orders
for Samsung Galaxy S 5 from mid-April.
To sweeten the deal in favor of its customers, RadioShack is
offering an additional concession of $75-$300 in its Trade and
Save program. Notably, the upcoming Galaxy S 5 accessories and
Samsung GEAR smartwatches will also be available in the
The company's core Consumer Electronics retail business is on
a secular downtrend as the rising trend of shopping through
tablets and smartphones is lowering profits of the retail
industry. We believe that the pre-order and Trade and Save
program announced by RadioShack will particularly attract
customers who prefer making online purchases over visiting retail
Recently, RadioShack announced its intent to close 1,100
unprofitable outlets after it reported dismal numbers for the
eighth consecutive quarter. This decision is part of its strategy
to spur growth.
After shutting down nearly 20% of its outlets, the company's
operating expenses are likely to reduce. However, until the
comparable store sales improve, a drastic turnaround in its
business is impossible. RadioShack is facing stiff competition
from retail giants like
Best Buy Co. Inc.
In the recently concluded quarter, the company's top and
bottom line missed the respective Zacks Consensus Estimate. More
importantly, the company's comparable store sales for the
operated stores and kiosks (stores and kiosks that have been
operational for at least a year) declined 19%.
RadioShack currently has a Zacks Rank #4 (Sell).
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