RadioShack Goes DownHill, Hits New 52-Week Low - Analyst Blog

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Shares of the struggling American franchise of electronics retail stores, RadioShack Corp. ( RSH ) continued to slide touching a fresh 52-week low of $1.12 yesterday. In the past twelve months, the company's shares have plunged more than 67% owing to dismal quarterly performance in the past few quarters.  

Notably, RadioShack also faces other operational challenges. For instance, it has been experiencing increased competitive pressure from larger retailers in the electronic retail segment, such as Conns Inc. ( CONN ). It has also lost its core customer base of electronics enthusiasts and now sells products which are commonly available at most other retailers.

Although management remains confident about achieving business from Verizon, but believes that the latter's business requires aggressive marketing efforts to enhance consumer awareness. We expect revenues from the Wireless division to remain weak for the rest of 2014.

The company's earnings have missed the Zacks Consensus Estimate in all of the last four quarters, with a huge average miss of 275.6%. In the recently concluded quarter, the company's net loss widened to $98.3 million from a net loss of $23.3 million in the year-ago quarter. Total revenue of $736.7 million was down 15.2% year over year and was also short of the Zacks Consensus Estimate of $761 million.

On the other hand, comparable store sales for company-operated stores and kiosks (stores and kiosks that have been operational for at least a year) were down 14% in the reported quarter. This is a key retail performance indicator measuring growth from the existing sales locations.

Furthermore, RadioShack is facing intense competition from larger rivals like Best Buy Co. Inc. ( BBY ) and Wal-Mart Stores Inc. ( WMT ). RadioShack currently carries a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: WMT , BBY , RSH , CONN

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