To demonstrate just how often I frequent RadioShack
In many respects, the results looked quite decent; earnings of $0.30 matched analyst projections and sales of $949 million beat their expectations. But still, total sales fell 4.4% as same-store sales dropped 4%, the latter of which management attributed to "lower sales in Sprint
CEO Julian Day stated he was "pleased with the overall outcome" of the quarter, as a tough January was followed by better sales and profitability trends in February and March. While selling, general, and administrative (SG&A) expenses fell, a lower gross margin from greater sales of lower margin items and increased promotional activity contributed to the 14% drop in operating income.
As we've been saying for a while now, cutting the fat at company headquarters and reducing overall costs can only take a company so far. Until sales trends improve, its long-term prospects remain hazy at best.
Investor patience appears to be running thin, as the share price has fallen back close to its 52-week low. The only reason I stepped foot into Radio Shack was because I had to replace a battery in a Radio Shack branded phone, leaving me with no other choice. I would have to say that at this point it's caveat emptor for current and prospective shareholders, primarily because I can't see why shoppers would head to RadioShack over rivals like Best Buy
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.