RadioShack Reports Higher Sales, Earnings

TWICE Staff -- TWICE, 7/29/2010

Fort Worth, Texas, - RadioShack, which has been subject of takeover rumors in recent weeks, reported higher net sales and net earnings for the second quarter, ended June 30.

Total net sales and operating revenues for the quarter increased 4.7 percent to $1.01 billion, compared with $965.7 million for the prior year's second quarter.

 Net income for the second quarter increased 8.6 percent to $53 million, compared with net income of $48.8 million reported for the same period last year.

Comp-store sales for company-operated stores and kiosks increased 6.7 percent during quarter, compared with the prior year.

"In the second quarter, we worked hard to continue to strengthen our brand with particular emphasis on the mobility sector," said Julian C. Day, chairman/CEO in a statement.

"This quarter we increased our marketing spend to emphasize our mobility focus, and we believe the overall results we achieved reflect the success of this strategy," said Jim Gooch, executive VP/chief financial officer. "We also increased our investment in inventory primarily related to the strong growth in our wireless platform."

Gooch added that RadioShack recently completed a pilot of wireless kiosk locations inside Target stores and now plans to rollout kiosks in the majority of Target store locations by mid-2011. The full mobile service, known as Bullseye Mobile, will begin rolling out to select Target stores Aug. 15.

RadioShack also said that it entered into an agreement with one of its wireless service providers pertaining to upfront commissions.

The 4.7 percent increase in total net sales and operating revenues for the 2010 second quarter was driven by a $52.5 million or 6.4 percent increase in sales generated by U.S. company-operated stores. This increase was partially offset by a $7.9 million decrease in kiosk sales. The decrease in kiosk sales was attributable to fewer kiosk locations and the closure of Sprint-branded kiosks in August 2009, partially offset by strong comp-store revenue gains in Sam's Club kiosk locations. The increase in other sales of $1.1 million was primarily due to sales growth in company-operated stores in Mexico, the chain said.

The 6.7 percent increase in comp-store sales for company-operated stores and kiosks during the 2010 second quarter was driven by higher postpaid wireless sales, the addition of T-Mobile as a third postpaid wireless carrier in company-operated stores, and higher sales of prepaid wireless handsets and airtime. These increases were partially offset by a decline in sales of digital converter boxes.