On April 15, 2014, we issued an updated research report on RadioShack Corp. . Notably, the comparable store sales for the company-operated stores and kiosks (stores and kiosks that have been operational for at least a year) were down 19% in the reported quarter. This is a key retail performance indicator measuring growth from the existing sales locations. Moreover, the company has announced its plans to close nearly 1,100 unprofitable stores.
RadioShack has delivered negatively earnings surprise in all four quarters last year, with an average beat of negative 309.8%. The company reported weak financial results for the fourth quarter of fiscal 2013 wherein both its top and bottom line missed the respective Zacks Consensus Estimate.
RadioShack has recently taken several steps to make a turnaround in its business. The company has introduced several promotional activities in order to drive store sales and launched two fresh concept stores in China and Malaysia. The company also plans to expand its presence in the Asian market by opening stores in the upcoming years.
As part of its recent restructuring strategy, RadioShack is striving to gain more importance as a strategic partner for nationwide wireless operators like Verizon Communication Inc. (VZ - Free Report) , AT&T, Inc. (T - Free Report) and Sprint Corp. (S - Free Report) .
Despite such strategic measures, declining foot traffic has severely affected RadioShack’s business. Nowadays, consumers prefer making online purchases to visiting retail stores and thus RadioShack’s core Consumer Electronics retail business is on a secular downtrend.
The rising trend of shopping through tablets and smartphones is hampering retail industry profits. As a result, the company plans to shut most of its unprofitable outlets. The company is also suffering from costs associated with transition from an adverse product mix toward low-margin smartphones.
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RadioShack currently carries a Zacks Rank #5 (Strong Sell).