The bleeding has stopped, but electronics retailer RadioShack (NYSE:RSH) is still searching for a way to get consumers to enter its doors.

As with last quarter, turnaround specialist Julian Day continues to deftly cut costs and maximize cash generation through working capital efficiencies as well as the "more prudent allocation of capital expenditures." The financial discipline boiled down to second-quarter earnings of $0.34 after a loss in last year's quarter. The bottom-line improvement also beat analyst expectations, but sales continue to fall, meaning Day has yet to compel customers to increasingly shop at RadioShack.

The former management team had turned to wireless sales, but any benefits proved short-lived, as the space is overly competitive. In addition to big-box giants such as Best Buy (NYSE:BBY) and Circuit City (NYSE:CC), wireless operators such as Sprint (NYSE:S), AT&T (NYSE:T), and Verizon (NYSE:VZ) operate their own stores -- and many of them. So much for product differentiation.

Gross margin did improve during the quarter, suggesting that RadioShack is seeing the benefits from closing underperforming stores. Its merchandise mix is also beginning to improve; the earnings press release cited "improved inventory management and a more profitable product mix," as well as lower selling, general, and administrative costs (thanks to a closer eye on payroll and advertising expenses).

But with a 15% overall drop in sales and a putrid same-store sales decline of 8.9%, management still has quite a ways to go to convince investors and consumers that RadioShack is here to stay. Granted, a lower cost structure and better cash flow generation benefit shareholders, and has worked wonders for Sears (NASDAQ:SHLD). But financial management can only take a company so far -- eventually RadioShack will have to lure more customers into its stores and improve sales to ensure its long-term survival.

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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.