RadioShack sales, profits down on weak mobile category
FORT WORTH, Texas — Comps were down 7% at RadioShack for the fourth quarter, driven by a decline in the mobility and consumer electronics platforms. Total sales and and operating revenue were $1.3 billion, compared with $1.4 billion last year.
The company reported a fourth-quarter net loss of $63 million, or 63 cents per diluted share, compared with net income of $12 million last year.
Dorvin Lively, executive vice president, chief financial officer and chief administrative officer of RadioShack Corp., said, "Overall, the fourth quarter continued to be impacted by challenges similar to those of the first three quarters of the year. The most significant contributing factor to the decline in our performance was the postpaid wireless business which saw a decline in transaction volume across the year, combined with a lower margin rate. However, I am pleased with the progress we have made in improving other aspects of our business. The gross margin rate for all of our business, excluding mobility, was flat with 2011 with significant improvement in our consumer electronics business. We have improved and strengthened our high-margin signature platform, which generated sales growth in each quarter of 2012. Additionally, our no-contract phone and tablet businesses generated sales and gross profit improvement."
For the full year, the company reported that total net sales and operating revenue were $4.3 billion, compared with $4.4 billion last year. Comparable-store sales were down 3.5%.
Net loss for the year was $139 million, or $1.39 per diluted share, compared with net income of $72 million last year.
Despite the poor performance, Lively is optimistic that the company now has the right leadership in place to strengthen the business.
"Looking ahead, we will be focused on stabilizing the profitability of our business as well as our growth initiatives. Our new CEO, Joe Magnacca, joined RadioShack on February 11. With the addition of Joe and other new senior executives, we now have a strong management team in place focused on rebuilding the business and leading the company into the future."