RadioShack (RSH) shares fell another 7% Wednesday, adding to yesterday’s 10.4% loss, following another big quarterly loss.
The Fort Worth-based consumer electronics retailer said its net sales for the 13-week period ending May 3 fell 13.2% y/y to $736.7 million, driven by a 14% decline in sales at stores open at least a year.
The struggling company saw its 1Q losses from continuing operation increase to $98.3 million, or $0.98 per share, from $23.3 million, or $0.28 per share, a year ago. Analysts, on average, expected a loss of $0.52 per share on sales of $767.5 million.
RadioShack ‘s stock fell 7.25 percent Wednesday, closing at $1.28 a share. RSH is now down almost 65% on a y/y basis and off about 300% from their Sep 16, 2013 $4.36 52-wk high.
In a conference call with analysts, Chief Executive Officer Joseph Magnacca, who has been trying to lead a turnaround since taking the helm early last year, said that while his company’s disappointing results were affected by “an industry-wide decline in consumer electronics and a soft mobility market”, we have a “clear vision for RadioShack’s future and a detailed strategy to turn the business around.” Magnacca insisted the company is making progress in its turnaround.
Still, some analysts wondered on the validity of his argument.
“We think the odds of a bankruptcy filing are now over 50% and therefore are maintaining our Sell rating and cutting our PT to $0 as we view recovery for the company as unlikely”, analyst Scott Tilghman of B. Riley & Co., said [via BI] in a research note.
“RadioShack has everything moving in the wrong direction”, said [via USATODAY] Wedbush Securities’ Michael Pachter. “Comps are down double digit, gross margins are declining, and operating expenses as a percentage of sales are going up. This is a triple whammy, and it’s pushing them closer to extinction”.