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FORT WORTH – RadioShack Corporation (NYSE:RSH) today reported its first quarter results for its fiscal period that finished May 3, 2014, the end of its first quarter for its 2015 fiscal year. Same store sales were down 14 percent. The company said that drastic drop was driven by traffic declines and poor performance in the mobile phone business.
RadioShack's retail network includes some 4,250 company-operated stores in the United States. Loss from continuing operations was $98.3 million compared to a loss from continuing operations of only $23.3 million last year. The company's revenues fell by 13 percent from $848.4 a year earlier.
The company closed 22 of its own stores and expects to close up to 200 stores this year, which will be selected based on location, area demographics, lease life and financial performance. The company originally wanted to close 1,100 stores but its creditors have insisted on only the closure of 200 stores per year for three years.
"Our lenders have worked very closely with us, despite what you've read in the press," states chief executive officer Joseph C. Magnacca during an earnings call to analysts this morning. The CEO spoke optimistically about how RadioShack is executing its turnaround plan. "We are building the pipeline of new products that will bring differentiation and newness to our stores in the form of high-margin private brand and exclusive items, including those from new partnerships like Quirky and PCH," said Mr. Magnacca. "Our concept stores continue to drive strong sales growth, and we have begun to execute our 100-store remodel program to scale the successful components of our concept stores across our network."
Mr. Magnacca added, "We are also successfully reducing our costs, with a particular focus on removing expenses that do not impact the customer experience, and have taken steps to lower our corporate headcount, leverage technology, and reduce discretionary expenses. Our entire team is focused on executing our vision, adapting to the environment, managing our balance sheet, and driving sustainable change."
During the earnings report to analysts, little was said about the chain's dwindling 912 dealers and how the turnaround affects these franchisees.
As the electronics retailer struggles to survive, it still ended the quarter with total liquidity of $423.7 million at May 3, 2014, including $61.8 million in cash and cash equivalents and $361.9 million of availability under a 2018 Credit Agreement. This availability is net of letters of credit totaling $67.8 million outstanding at May 3, 2014. The company's total debt was $614.5 million at May 3, 2014, which matures between 2018 and 2019.