Emerson Radio tanks after Wal-Mart snub
NEW YORK (AP) — Shares of Emerson Radio Corp. took a hit on Monday after the consumer electronics seller disclosed that Wal-Mart Stores Inc., the world's biggest retailer, will stop selling two of its microwave ovens that account 31 percent of Emerson's revenue.
THE SPARK: Emerson said in a regulatory filing Monday that it was informed by Wal-Mart that the company will stop selling the microwaves in the spring. The company said they accounted for about $48.4 million of its revenue. It expects to see the full effect of Wal-Mart's decision in its fiscal 2014, which begins on April 1. Emerson said the reduction in business with a key customer like Wal-Mart will have a "material adverse effect" on its operations.
Emerson added that it is reviewing its options, including "a complete analysis of its current and prospective product lines."
BACKGROUND: Emerson sells and licenses housewares and consumer electronics. Its products include microwave ovens, refrigerators and wine coolers. It also sells digital clock radios, portable stereos and other items.
SHARE ACTION: Shares of Moonachie, N.J.-based Emerson Radio fell 42 cents, or 19.7 percent, to $1.71 in afternoon trading. The stock has traded between $1.54 and $2.17 in the past 52 weeks.