RadioShack: Profits Up, Sales Down

We’ve read the satirical take on RadioShack. Now let’s read about the actual take on RadioShack. The company released its Q1’07 financials yesterday and reported:

• Net sales fell 14.5% as same-store sales struggled, falling 9.2% due to "the highly promotional nature of our business in the first quarter last year."

• Profitability jumped as new management focused on cost-cutting and better inventory management to stem the sales slide.

• Because of increased financial discipline, RadioShack was also able to increase cash on hand, reduce debt, buy back shares, and improve cash flow.

SOURCE: Motley Fool article.

Comments

[Joe Wikert]

Was that really satire?;-) I too wonder what keeps RadioShack afloat. I've been to a RadioShack store exactly once in the past 2 years. I remember distinctly because I was looking for a specialty item and I figured they'd likely carry it. I was right, they had it, but how many people use them the same way I do?

With all their retail outlets it would seem like the chain has upside potential. The key would be figuring out what their brand means and stands for. If it's still the crystal radio hobbyist, good luck! But with all the do-it-yourself activities taking place these days, I've got to believe there's a segment and a spin they could take advantage of...

[Adelino de Almeida]

Cost cutting is not a sustainable strategy for growth. I wonder if life is not imitating satire in this case.

[Kevin Hillstrom]

What would you advocate Radio Shack do to revitalize themselves?