Shares of the struggling American franchise of electronics
) 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
). 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
Furthermore, RadioShack is facing intense competition from
larger rivals like
Best Buy Co. Inc.
Wal-Mart Stores Inc.
). RadioShack currently carries a Zacks Rank #4 (Sell).
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