RadioShack Beats Street; Sales Drop on Store Closures, Wireless Weakness

RadioShack announced a 2Q net profit of $47 million ($0.34/share), easily beating analysts' average estimate of $0.25/share. Sales fell 15% to $934.8m, missing analysts' forecast of $982.5m. Comparable store sales declined by 8.9%. RadioShack said the post-paid wireless business continued to negatively impact both the comparable store and total sales results. It also closed 481 stores last year. In a press release, CFO Jim Gooch commented, "Against the background of a smaller, but more profitable, sales base our financial performance this quarter marked a continuation in trend. Our continued disciplined management of expenses and working capital allowed us to drive improved profit and produce increased levels of cash on the balance sheet." Gross profit margin increased by over 3% y/y to 50.5%, while operating profit margin improved to 6.9% from less than 0.25% last year. Shares of RadioShack gained 0.4% to $28.80 on Friday.

Sources: Press release, MarketWatch
Commentary: RadioShack Should Rally Into Earnings - Jeffries • The Lessons I Learned From Passing on RadioShack and M & F Worldwide • S&P 500 Stocks With Largest Trailing 12-Month P/E Contractions/Expansions
Stocks/ETFs to watch: RSH. Competitors: BBY, CC. ETFs: RTH, XRT, PMR

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