It’s Raining Offers for RadioShack Buyers this Holiday Season

Zacks

Beleaguered electronic retailer RadioShack Corp. (RSH) has redesigned its retail website, with new deals in the offing, in an effort to ramp up sales in the upcoming holiday season. Following the development, the company’s shares have jumped nearly 3%.

Starting today, that is Nov 26, RadioShack will provide exciting price offers on modern tech-gadgets available on its website, and will top it up with free shipping for all online purchases. The special holiday offers will be available till Dec 6, 2014.

The company’s Black Friday weekend deals –believed to be the best among competitors – will open today. This will only be a prelude to the upcoming Cyber Week, or Cyber Monday, the preview for which will kick off on Sunday, at 12:01 a.m. EST, on the company’s website. Throughout the week, RadioShack will add new deals every day. For Cyber Monday, the company is providing up to 30% discount on branded tablets and a whopping 50% off on select no-contract phones.

We believe the decision to shower offers of this magnitude on customers this holiday season will reasonably drive revenues higher for RadioShack. Weaker-than-expected performance by the company in the past has resulted in a steep fall in the company’s share price, which has plummeted more than 70% over the past one year. In the last reported quarter, the company’s adjusted loss per share of $1.00 was wider than the Zacks Consensus Estimate of a loss of 59 cents. Moreover, total revenue came in at $673.8 million, down 21.8% year over year and below the Zacks Consensus Estimate of $742 million.

Of late though, RadioShack had undertaken several strategic moves to revive its dwinding business. Management has been focusing on reducing costs, which entailed closing up to 200 stores every year over the next three years; lowering rent expense through negotiations with landlords; reducing compensation expense by optimizing labor hours and store operating hours; and reviewing other expenses to identify cost-reduction opportunities. Unfortunately, none of these methods has been able to lead RadioShack out of the dark.

Meanwhile, intensifying competition from retail giants like Amazon.com Inc. (AMZN), Best Buy Co., Inc. (BBY) and Conns Inc. (CONN) is impeding growth for the company.

RadioShack currently has a Zacks Rank #3 (Hold).

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