FORT WORTH, TX - RadioShack plans to close up to 1,100 of its underperforming stores in the U.S. and reported a wider loss for its fourth quarter as customer traffic slowed during the critical holiday season.
Its stock tumbled almost 21 percent in premarket trading Tuesday.
CEO Joseph Magnacca said in statement that the planned store closings would leave RadioShack with more than 4,000 U.S. stores, including more than 900 dealer franchise locations. The company didn't immediately identify what stores are being closed.
The electronics retailer said that the stores to be closed are being selected based on location, area demographics, lease duration and financial performance.
Magnacca said the latest quarter's performance was also hurt by increased promotional activity — particularly in consumer electronics; a very soft mobility marketplace and a few operational issues.
For the period ended Dec. 31, RadioShack Corp. lost $191.4 million, or $1.90 per share. That compares with a loss of $63.3 million, or 63 cents per share, a year earlier.
Excluding certain items, the Fort Worth, Texas, company lost $1.29 per share. Analysts surveyed by FactSet expected a loss of 16 cents per share.
Revenue declined to $935.4 million from $1.17 billion. Wall Street was looking for higher revenue of $1.12 billion.
Sales at stores open at least a year fell 19 percent on weaker traffic and the soft performance of its mobility business.
This figure is a key gauge of a retailer's health because it excludes results from locations recently opened or closed.
RadioShack reported a full-year loss of $400.2 million, or $3.97 per share. In the prior year it lost $139.4 million, or $1.39 per share.
Its adjusted loss was $3.04 per share. Annual revenue declined 10 percent to $3.43 billion from $3.83 billion.
Shares of RadioShack fell 57 cents, or 21 percent, to $2.15 in premarket trading about 90 minutes before the market open.