Tags: RadioShack | Earnings | Loss | Sales

RadioShack Expects Cost Cuts to Save $400 Million a Year

Thursday, 11 Dec 2014 08:36 AM

Struggling electronics retailer RadioShack Corp. said it expected its cost cutting to save more than $400 million annually but did not say when that would be achieved.

The company, which reported a bigger-than-expected quarterly loss, said cost savings include $90 million from store closures and asset sales, subject to lender approval.

RadioShack, which warned of bankruptcy in September, has been trying to turn around its business by closing unprofitable stores. It planned to close 1,100 but reduced the target to 600 over three years after lenders objected.

Lenders refused to approve the 1,100 store closures unless the company paid significant fees, prepaid a substantial portion of its debt and agreed to other covenants and concessions RadioShack considered "unreasonable."

Apart from closures and asset sales, the company said on Thursday other cost saving plans included its headquarters and field and store support.

The retailer, once the go-to shops for innovators and engineers, has been left behind by the mobile revolution and its e-commerce strategy lags those of rivals such as Best Buy Co. Inc. and Amazon.com Inc.

Net loss widened to $161.1 million, or $1.58 per share, in the third quarter ended Nov. 1, from $135.9 million, or $1.35 per share, a year earlier.

Same-store sales shrank 13.4 percent, falling for the fifth straight quarter.

Excluding items, the company reported a loss of $1.23 per share from continuing operations.

Net sales fell 16 percent to $650.2 million, its eleventh straight quarterly decline.

Analysts on average expected a loss of $1.04 per share on revenue of $717 million, according to Thomson Reuters I/B/E/S.

Up to Wednesday's close, the company's shares had lost 41 percent of their value since it warned of bankruptcy.

© 2017 Thomson/Reuters. All rights reserved.

 
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Struggling electronics retailer RadioShack Corp. said it expected its cost cutting to save more than $400 million annually but did not say when that would be achieved.
RadioShack, Earnings, Loss, Sales
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2014-36-11
Thursday, 11 Dec 2014 08:36 AM
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