This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

RadioShack's Earnings Miss Sees Sales Ebbing at Its Tired Stores

NEW YORK ( TheStreet) --  RadioShack (RSH) continues its spiral into obscurity as it posted a larger-than-expected quarterly loss Tuesday.

The U.S. electronics retailer reported a net loss of $98.3 million, declining from a $28.0 million loss in the same period a year earlier.

RadioShack's sales have been on a steady decline since 2010 as competition mounts from the likes of Best Buy (BBY), (AMZN) and Wal-Mart Stores (WMT), who offer wider selections for lower prices.

The company's stock price opened 15% lower on the news, falling from $1.54 to as low as 1.32 in morning trade. Shares pulled up to $1.36 in mid-afternoon trading.

RadioShack shareholders voiced their disgust with the direction of the company last week by rejecting the executive compensation package for a second year in a row.

Nearly 55% of votes were cast against the compensation plan in a nonbinding referendum at the shareholder meeting, up from 53% a year earlier.

"There's nothing that [Chief Executive Officer Joe Magnacca] has done that leads anybody to believe that he's the right guy to turn this business around," Anthony Chukumba, a New York-based analyst at BB&T, told Bloomberg.

The company currently faces a bevy of structural issues that are creating a divide between the retailer and customers.

For one, the stores are severely outdated. As consumers have migrated online, RadioShack continues to operate like a museum for vintage consumer electronics that were left behind in the 1990s. Consumers enjoy new, shiny objects to play with, a complete contrast to RadioShack, a store analysts have called "tired looking."

With regards to the actual merchandise, RadioShack mostly sells cell phones, which is becoming a dangerously saturated category. The company's lack of aggressive expansion into tablets or even Internet radio is another testament to its failure to adapt in the post-Y2K environment.

RadioShack announced plans in March to close up to 1,100 underperforming stores, which could be a small fraction of the closings to come if the electronic retailer doesn't make meaningful adjustments, fast.

RSH Chart
RSH data by YCharts

At the time of publication, the author had no position in any of the funds mentioned.

Follow @macroinsights

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
RSH $0.31 12.76%
AAPL $109.50 -1.16%
FB $92.47 0.08%
GOOG $638.31 -0.63%
TSLA $226.00 -2.60%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs