All is certainly not well at RadioShack
At the end of 2008, in the darkest hour of the financial meltdown, I picked RadioShack, Pier 1 Imports
I'm still not terribly impressed by RadioShack's progress, and neither are you, if its unwavering one-star CAPS rating is any indication. This week's fourth-quarter report showed a 4.7% rise in year-over-year sales, to $1.32 billion. Earnings expanded 26%, to $0.60 per share. But a lack of sales in the attractive personal-electronics and accessory segments made Mr. Market throw a fit over the results, and RadioShack traded down more than 7% following the news. Even a U.S. same-store sales gain of 6.1%, and 56% sales growth in its wireless segment, weren't enough to curry favor with the market.
In the end, things have to change at RadioShack -- and management knows it. CEO Julian Day took pains to explain how the company is rebranding itself as The Shack, and a 100-store trial of putting RadioShack kiosks inside Target
RadioShack sports way higher gross margins than either Wal-Mart
So I was wrong about RadioShack a year ago, and it looks like The Shack will be standing for a while longer. But if there's another big share-price move coming, I imagine it'll be a backlash from this 79% one-year gain, although RadioShack's P/E of 12 is not exactly luxury-priced. Still, dropping "Radio" from the name isn't a radical enough makeover to make it cool, and the company will have to show investors that it can continue to improve earnings.
Will RadioShack ever go the way of the dodo bird, or will it forever haunt your local mall? Discuss in the comments box below.
Fool contributor Anders Bylund wouldn't be caught dead holding a position in most of the companies discussed here, and he holds none at the moment. Best Buy and Wal-Mart Stores are Motley Fool Inside Value recommendations. Best Buy and Apple are Stock Advisor selections. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.