RadioShack Corp. (RSH) once again posted dismal quarterly numbers in the third quarter of fiscal 2015 with both the top and the bottom line missing the respective Zacks Consensus Estimate. This marks the company’s eleventh consecutive quarter of earnings and revenue miss. Consequently, RadioShack’s stock has declined more than 7% yesterday.
RadioShack reported adjusted loss per share of $1.23 that widened from the prior-year quarter loss of 90 cents as well as the Zacks Consensus estimate of a loss of $1.07. GAAP net loss from continuing operations in the third quarter stood at $161.1 million or a loss of $1.58 per share compared with a net loss of $135.9 million or a loss of $1.35 per share in the year-ago period.
Meanwhile, total revenue came in at $650.2 million, down 16.1% year over year and considerably below the Zacks Consensus Estimate of $724 million.
Notably, comparable store sales for company-operated stores and kiosks (stores and kiosks that have been operational for at least a year) were down 13.4% in the reported quarter mainly affected by traffic declines and slowdown in the mobility business. This is a key retail performance indicator measuring growth from existing sales locations.
Quarterly gross profit came in at $214.2 million, down 11.2% year over year. Gross margin stood at 32.9% compared with 31.1% in the comparable year-ago quarter. Selling, general, and administrative expenses totaled $313.8 million against $352.8 million in the year-earlier quarter. Operating loss was $114.1 million compared with an operating loss of $128.6 million in the year-ago quarter.
RadioShack consumed $242.9 million cash from operations in the third quarter against cash flow generation of $249.9 million in the prior-year quarter. At the end of the quarter under review, RadioShack had $43.3 million in cash & cash equivalent compared with $296.6 million at the end of Oct 31, 2013. Long term debt, at the end of the reported quarter, stood at $841.4 million versus $613 million as of Feb 1, 2014.
Despite several attempts to turn around business over the last 18 months, RadioShack has not seen much success. RadioShack’s core consumer electronics (including digital TVs, digital music players, and digital cameras) retail business has been on a secular downtrend and is quite unlikely to recover in the near future. Loss of foot traffic is also taking a toll on RadioShack’s mobility business – a platform on which the company had been banking for future growth.
RadioShack currently has a Zacks Rank #4 (Sell).
Other Stocks to Consider
Better-ranked stocks worth considering in this sector include Best Buy Co., Inc. (BBY), Mercadolibre, Inc. (MELI) and Geeknet, Inc. (GKNT). All these stocks holds a Zacks Rank #2 (Buy).
Read the Full Research Report on BBY
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