Call it morbid curiosity, but I couldn't help but take a peek at the RadioShack (RSH) third quarter conference call. I feel have to have respond to various parts of the call. CEO Joe Magnacca stated (my emphasis added),
I want to give you a brief report on the three-day Thanksgiving holiday period, Thursday, Friday and Saturday, because the results underscore the thinking behind our turnaround approach. For holiday, we have good news on three levels. First, over those three days, comparable store sales for U.S. company-operated stores were only down 1%. The reported Black Friday industry numbers were down in the 11% range, therefore our performance was a notably strong result in comparison.
While normally I might be tempted to applaud this effort, what Magnacca failed to mention is that this same-store sales drop of 1% was over three days compared to just two last year. RSH locations were closed last year on Thanksgiving while they were open all day this year. Unless Thanksgiving itself contributed almost no material sales, Black Friday and Saturday was likely in line with the very industry numbers he is comparing to if not worse or even much worse.
I mean, seriously, not to sound unprofessional, but if RSH can't even grow its sales by increasing the number of days open by 50% during the hottest time of the season, what hope does it have for the common shareholder? As it stands, RSH needs a serious and fast positive turnaround like yesterday - literally. What about the same-store sales outside of those three days? The conference call made no mention - and you can bet your behind that if they showed some strength RSH would have reported it.
There was a lot of talk about cost cutting but not a huge amount of talk about how to drive sales. In fact, RSH has cut its marketing and advertising budget. Even its ecommerce site, a notable strength for many retailers, was a lot of talk about what the company plans to do rather than any particular wins regarding sales. Magnacca did note sales were up 20% for the three-day Thanksgiving-Black-Friday-Saturday period which isn't bad, but he also hedged this by reminding everybody it is still a "very small part" of RSH's business.
If anybody can think of a reason to go long RSH, I'm all ears and eyes. I was previously bullish and hopeful on RSH, but I think the shorts win this one. RSH is heading to zero in my opinion.
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