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RadioShack Q2 Net Rises, Sales Off 4%

7/23/2002 09:19:00 AM Eastern

Fort Worth, Texas - Second quarter sales of wireless communications and digital product accessories helped RadioShack generate $51.8 million in net income, up from $41.2 million in the year-ago period.

Excluding unusual items, the retailer's second quarter net income was $53.2 million, compared with $48.9 million in the same quarter in 2001.

However, RadioShack sales in the second quarter dipped 4 percent, down to $998.1 million, compared with $1.04 billion in the second three months last year. Comp-store sales for the second quarter were flat, compared with last year.

'RadioShack's second quarter results reflect the company's successful execution of its strategy,' said Leonard Roberts, chairman/CEO. 'By focusing our resources on wireless communications and digital product accessories, our core anchor businesses, we are selling much more profitably this year and delivering more consistent results.' Second quarter wireless communication sales were up 14 percent, according to the company.

As an indication of its increasing profitability, gross margin climbed 182 basis points in the second three months, ended June 30, to 51.1 percent. Also on the plus side, selling, general and administrative expenses were down 1.7 percent, to $391 million, excluding unusual items, year over year.

For the six months, RadioShack sales reached $2.03 billion, down less than 1 percent from the $2.18 billion reported in the same period in 2001. Net income for the six months jumped to $109.4 million, up from $87.7 million in the prior year.

Looking ahead, RadioShack expects total sales to grow 2 percent to 3 percent in the second half of 2002, with comp-store sales growth anticipated to reach 5 percent to 6 percent in the same period.

Gross margin is expected to increase 100 to 140 basis points for the full year 2002, while the retailer anticipates delivering 13 percent to 15 percent earnings per share growth for the full 12 months.

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