RadioShack calls on mobile category to strengthen business
FORT WORTH, Texas — Comparable-store sales were flat at RadioShack for the second quarter, as the company is still waiting for new strategic initiatives to pay off. The one bright spot is the mobile category, which had a 3.3% comps increase at U.S. RadioShack company-operated stores. Total net sales and operating revenue of $953.2 million, an increase of 1.2% versus last year.
Net loss for the quarter was $21 million, or 21 cents per diluted share, compared with net income of $24.9 million, or 24 cents per diluted share, last year.
Jim Gooch, president and chief executive officer of RadioShack Corp., said, "Overall, our business performed below expectations during the second quarter. We were disappointed in our gross margin rate performance, as the initiatives we have under way have not yet generated enough momentum to improve the trend. However, we were pleased with the sales growth generated in the mobility category of our business. Importantly, we saw incremental improvement throughout the quarter as we successfully connected with our customer base and drove sales growth in this key category through effective promotions and the expansion of our Target Mobile centers. We are also seeing continued stability and improvement in the signature category. Our primary operating focus continues to be on stabilizing gross margins and aggressively managing our cost structure."
While the mobility platform may be a bright spot for the company, the company's core business, consumer electronics, took a 26.5% sales dive, reflecting industry trends.
Despite the tough CE environment, RadioShack remains positive.
"We remain confident that our strategic initiatives will generate sales growth, improve gross margins and drive long-term growth. These initiatives remain on track, and we expect them to drive improvement through the remainder of this year and gain further traction as we enter next year," said Gooch.