RadioShack Corp.'s (RSH) second-quarter profit rose 18% amid a
year-earlier charge as earnings topped expectations while the
consumer-electronics retailer dealt with falling margins.
The company has been seeking a way to stay relevant as companies
such as Best Buy Co. (BBY) and Wal-Mart Stores Inc. (WMT) take
increasing market share in the consumer-electronics space.
RadioShack is renovating most company-owned stores and taking steps
such as having an electronics trade-in program in those
locations.
It posted income of $48.8 million, or 39 cents a share, up from
$41.4 million, or 32 cents a share, a year earlier. The prior
year's results included a $4.3 million charge related to the
amendment of its headquarters lease, which was partly offset by a
state sales-tax settlement.
Revenue decreased 2.9% to $965.7 million as same-store sales
fell 4%. Online sales rose 24%.
Analysts polled by Thomson Reuters expected earnings of 28 cents
and revenue of $977 million.
Gross margin fell to 46.1% from 47.2%, hurt by a change in sales
mix toward lower-margin products such as digital televisions and
netbooks.
Earlier this month, the company said it will offer in its stores
products and services from Deutsche Telekom AG's (DT) T-Mobile
cellphone unit, giving it another way to lure cellphone
customers.
Cash levels rose 61% while inventories dropped 7.7%.
RadioShack's shares closed Friday at $16.06 and haven't traded
premarket. The stock is up 35% this year.
-By Kerry Grace Benn, Dow Jones Newswires; 212-416-2353;
kerry.benn@dowjones.com