Radioshack shares slide on big 1st-quarter loss, declining sales

FORTWORTH, Texas — Shares in RadioShack Corp. sank Tuesday after the chain reported another big loss in the first quarter, as sales declined at double-digit rates. Results were hit hardest by poor cellphone sales because of deals offered exclusively by the big carriers, the company said.

The Fort Worth-based consumer electronics retailer said 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. Comparable store sales, a measure of sales at stores open at least a year, fell 14 percent.

CEO Joseph Magnacca, who has been trying to lead a turnaround since taking the helm early last year, said the disappoint- ing results were affected by “an industrywide decline in consumer electronics and a soft mobility market” weakened by “lackluster consumer demand” in new cellphones.

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 companyowned stores this year. The company now plans to close just 200 stores, its limit under existing loan covenants.

Despite the challenges, Magnacca said Tuesday that he believes 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.”

Later, the CEO told analysts that the new products, including many private-label items, would lead to a 40 percent turn- over in inventory. These goods were being shipped in the second quarter and would be on shelves in the third, said chief financial officer John Feray.

RadioShack also 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 also said that a new in-house repair service, Fix It Here, has gotten a favorable reception. The program has been rolled out in 280 stores, and eventually will be offered at 700. The CEO said that technically inclined workers received 40 hours of training — which minimized cost — to replace screens, change batteries and make other repairs on cell phones and tablets.

The company said it ended the quarter with total liquidity of $ 423.7 million, including $61.8 million in cash and cash equivalents.