RadioShack profit misses, revenue up; turnaround expert named interim CFO
Fort Worth, Texas - RadioShack Corp. on Tuesday reported a second-quarter loss that was bigger than analysts expected. However, revenue beat expectations, with the first increase in same-store sales since 2010, and the chain announced it was bringing on consultants to help with its turnaround.
RadioShack said CFO Dorvin Lively, is leaving the company to pursue another business opportunity. (Lively was named CFO at New Hampshire-based Planet Fitness, an operator of 650 health clubs.) It also said it is working with AlixPartners, a global business advisory firm with expertise in corporate turnarounds, and investment banking firm Peter J. Solomon Co. to help with its overhaul. AlixPartners managing director Holly F. Etlin will serve as interim CFO.
The retailer reported a net loss for the three months ended June 30 of $53.1 million, versus a net loss of $21 million last year. Revenue was nearly flat at $844.5 million, above Street projections of $816.1 million. Same-store sales were up 1.3%. And revenue in stores open at least one year rose 1.3%, the first increase in that metric since 2010.
“While the second quarter presented a number of challenges, it is noteworthy that we generated comparable store sales growth for the first time since 2010, and increased sales for the sixth consecutive quarter in our high-margin signature platform of products,” said CEO Joseph C. Magnacca. “In addition, we made progress on the initiatives we outlined last quarter in repositioning our branding, opening a new concept store, streamlining our product assortment, and entering new strategic partnerships.”
Magnacca, who joined the company in February, said he expects the company’s turnaround will take several quarters, and during that time its results may vary from quarter to quarter as its make strategic changes to improve its long-term financial performance.
“We will be guided by the five pillars of our turnaround strategy – repositioning the brand, revamping our product assortment, reinvigorating our stores, operational efficiency and financial flexibility,” he said.
RadioShack said it ended the quarter with total liquidity of $818 million, with total debt of $713 million at June 30.