Sales down at RadioShack as company reworks wireless offerings
FORT WORTH, Texas — RadioShack reported that total net sales and operating revenues from continuing operations for the 2011 second quarter were $941.9 million, compared with $962.3 million for the 2010 second quarter. According to the company, the decrease in total net sales and operating revenues for the 2011 second quarter was driven by a $76.1 million decrease in sales generated by U.S. company-operated stores.
Net income was $24.9 million, or 24 cents per diluted share, for the 2011 second quarter, compared with $53 million, or 41 cents per diluted share, for the 2010 second quarter. According to RadioShack the decline in income was impacted by costs related to phasing out T-Mobile inventory and with closing its manufacturing plant in China.
While it is phasing out its T-Mobile inventory, the company will be adding Verizon Wireless products and services to 4,300 U.S. stores beginning Sept. 15. Effective Sept. 14, the company will cease offering T-Mobile wireless products and services in its U.S. company-operated stores.
Jim Gooch, president and CEO, said, "Our second-quarter results reflect a number of short-term transitional changes related to our wireless carriers. We are working diligently to position RadioShack for future growth in the wireless space, and our new relationship with Verizon Wireless, the nation's largest wireless provider, is an integral piece of that program. With our new portfolio of carriers, we are delighted to offer customers what we consider to be the best mobile offerings on the market.
Comparable-store sales for company-operated stores and Target Mobile centers decreased 7.8% during the 2011 second quarter. The decline was primarily attributable to the decline in Sprint and T-Mobile postpaid wireless sales, RadioShack reported. Lower sales of digital-to-analog television converter boxes and related television antennas, digital cameras and camcorders, and digital music players also contributed to the decrease in sales, the company said. These decreases were partially offset by higher postpaid wireless sales from AT&T.