RadioShack focuses on future after lackluster Q1
FORT WORTH, Texas — RadioShack's sales and earnings fell in the first quarter, as the company struggles to deliver an effective mix or products and services to its customers.
The company reported that total net sales and operating revenues from continuing operations for the 2012 first quarter decreased 0.9% to $1.01 billion, compared with $1.02 billion for the 2011 first quarter. The decrease in total net sales and operating revenues for the 2012 first quarter was driven by a $61.6 million decrease in sales from U.S. RadioShack company-operated stores, the company said. This decrease was partially offset by a $52.5 million increase in other sales, reflecting an additional 610 Target Mobile centers in operation at March 31, compared with March 31, 2011. Comparable-store sales for company-operated stores and Target Mobile centers decreased 4.2% during the 2012 first quarter, which was primarily attributable to a decline in Sprint postpaid wireless sales, as well as decreased sales of prepaid wireless handsets, laptops and home entertainment accessories. This decrease was partially offset by higher postpaid wireless sales of AT&T, as well as sales of tablet devices, tablet accessories, headphones, and a net increase in sales at U.S. RadioShack company-operated stores of Verizon Wireless postpaid sales compared with T-Mobile postpaid sales in the 2011 first quarter.
Net loss for the 2012 first quarter totaled $8 million, or 8 cents per diluted share, compared with net income of $35.1 million, or 33 cents per diluted share, for the 2011 first quarter.
Jim Gooch, president and CEO of RadioShack Corp., said, "As we anticipated, the first quarter was extremely challenging. While our results were disappointing, we are working quickly to drive top line growth and expand margins. We were pleased to see progress from initiatives we began implementing last year, particularly in our highest gross margin signature platform. We believe these initiatives contributed to monthly sequential improvement in Company performance throughout the quarter that has continued into April."
Gooch continued, "Moreover, we are acting decisively to improve our marketing, with a sharpened mobility message that heightens awareness of our broad mobile offerings, a changed media mix, and a new lead creative agency. We are continuing to capitalize on our successes in expanding product assortments in the signature product platform. And, we are pursuing incremental growth through targeted international ventures and relationships that build on our strengths."
In order to improve sales and profits, the company said it is focused on an ongoing shift to mobility, maximizing profits in its signature platform and pursuing growth opportunities.
Gooch concluded, "As we look to the remainder of 2012, we realize we have a lot of work to do, and we are focused on initiatives that are aligned with the areas of our business where we see the greatest opportunity. Specifically, we are building consumer awareness of our broader and more compelling mobility platform, regaining relevance and continued momentum within our signature business, and pursuing select incremental growth opportunities as we continue our disciplined approach to cash management and work to return value to our shareholders."