RadioShack Corporation (NYSE:RSH) released its fourth quarter earnings report before opening bell, posting losses which were much greater than expected. The retail chain posted non-GAAP losses of $1.29 per share on revenue of $935.4 million. GAAP net losses were $1.90 per share. Analysts had been expecting losses of 14 cents per share on revenue of $1.12 billion in revenue.
RadioShack reports lower holiday traffic
In the same quarter a year ago, RadioShack Corporation (NYSE:RSH) reported net sales of $1.17 billion. Comparable store sales fell 19% year over year due to declines in traffic and soft mobility sales. Consolidated gross profits were $278.4 million or 29.8% of net sales. That’s compared to $419.3 million or 35.8% of net sales in the same quarter a year ago. Excluding one-time inventory reserves, gross profit was $288.5 million or 30.8% of net sales.
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“Our fourth quarter financial results were driven by a holiday season characterized by lower store traffic, intense promotional activity particularly in consumer electronics, a very soft mobility marketplace and a few operational issues,” said CEO Joseph C. Magnacca in a statement. “Even in this environment, we’re continuing to make progress on the five pillars of our turnaround plan: repositioning the brand, revamping the product assortment, reinvigorating the stores, operational efficiency and financial flexibility.”
For the full year, RadioShack Corporation (NYSE:RSH) reported total net sales and operating revenue of $3.43 billion, compared to $3.83 billion in the previous year. Comparable store sales fell 8.8%. Consolidated gross profits were $1.17 billion or 34.1% of net sales, compared to $1.47 billion or 38.4% o net sales in the previous year.
Perhaps the one bright area in this morning’s earnings report was the “strong sales growth” noted in the company’s Concept Stores.
RadioShack to close stores
The retailer finished new financing of $835 imllion, which includes a $585 million asset-based credit agreement. RadioShack Corporation (NYSE:RSH) said it plans to close up to 1,100 stores this year, which the company selected based on location, area demographics, lease life and financial performance. The program will be subject to the consent of the company’s lenders under its 2018 credit agreement and term loan.
RadioShack Corporation (NYSE:RSH) ended the fourth quarter with liquidity of $554.3 million, which includes $179.8 million in cash and cash equivalents and $374.5 million of availability under the credit agreement.
The retail chain also said it adopted a new financial calendar so that it will be aligned to a traditional 52-week retail calendar. Because of the change, RadioShack Corporation (NYSE:RSH) will have a “stub period” between Jan. 1, 2014 and Feb. 1, 2014, which will be identified as fiscal year 2014 and reported separately in the 10-Q filing for the first quarter of the 2015 fiscal year, which will run from Feb. 2, 2014 through Jan. 31, 2015.