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RadioShack Q2 Sales Increase 2%

8/06/2001 02:00:00 AM Eastern

Faced with business challenges that result from a slowing economy, as well as "company-specific issues that surfaced in the first half of the year," RadioShack said total sales climbed 2 percent in the second quarter. The company reported revenue of $1.04 billion for the period, compared with $1.02 billion in the same three months in 2000.

Net income for the second quarter ended June 30 was $41.2 million, compared with $75.4 million in the same quarter last year. Earnings in the second quarter, adjusted for additional loss related to the sale of Computer City, were $48.9 million, a 35 percent drop from the $75.4 million reported in the year-ago period.

"We are extremely focused on preserving gross margins and have identified the parts, batteries and accessories category — our highest gross margin and most famous anchor business — as the dominant long-term margin driver," said Leonard Roberts, chairman/CEO.

"Short-term, we're focused on lowering SG&A costs and executing other gross margin enhancement programs that should improve the company's profitability," Roberts said.

RadioShack said its previous earnings-per-share guidance for fiscal 2001 could be at risk due to lower-than-expected sales and gross margins.

For the six months, RadioShack sales climbed 5 percent to $2.18 billion, compared with $2.07 billion in the same six months in 2000.

Net income for the six months was $87.7 million, compared with $145.1 million in the first half of last year. Adjusted for the loss on the sale of Computer City and provision for a loss on an Internet-related investment in the first quarter of 2001, earnings in the first six months reached $114 million, down 21 percent from the $144.5 million recorded in the year-ago first half.

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