RadioShack misses by $0.49, misses on revs
Reports Q1 (Mar) adj. loss of $0.98 per share, $0.49 worse than the Capital IQ Consensus of ($0.49); revenues fell 13.2% year/year to $736.7 mln vs the $766.92 mln consensus.
- Comparable store sales were down 14% (estimates down ~10%) driven by traffic declines and soft performance in the mobility business. Consolidated gross profit was $268.7 million, or 36.5% of net sales, compared with $340.9 million last year, or 40.2% of net sales. The decline in gross profit and gross margin rate was primarily driven by aggressive price competition in our current postpaid and prepaid handset offerings.
- CASH, LIQUIDITY AND CAPITAL SPENDING
- The Company 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 the 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. Subsequent to the end of the quarter, the Company drew on the 2018 Credit Facility for general corporate purposes. As of June 9th, we had outstanding borrowings of $35.0 million under the 2018 Credit Facility. We expect to further utilize the 2018 Credit Facility during the remainder of the year.
- As previously announced, the co has aligned its fiscal year end to a traditional 52-week retail calendar, with the fiscal year ending on the Saturday closest to January 31st.
- "Overall, our first quarter performance was challenged by an industry-wide decline in consumer electronics and a soft mobility market which impacted traffic trends throughout the quarter. In particular, our mobility business was weak due to lackluster consumer interest in the current handset assortment and increased promotional activities across the industry including the wireless carriers. This resulted in disappointing sales and gross margin performance... Even in this environment, we are making progress on our turnaround strategy."