Feb 23, 2010 (08:02 AM EST)
Wireless Leads RadioShack To 26% Profit Gain
Read the Original Article at InformationWeek
RadioShack's strategy of beefing up its mobile phone offerings appears to be paying off, as the firm reported a 26% gain in its fourth-quarter earnings.
Drawing on its longtime strength among electronics hobbyists and walk-in consumers, RadioShack has been adding more brand name merchandise to challenge big box retailers like Best Buy and Wal-Mart.
"In 2009, we leveraged our financial and operational strength to relaunch our brand, focusing more clearly on our leadership in the areas of mobility and innovative technology," said Julian Day, RadioShack chairman and CEO, in a statement. "The addition of a third national wireless carrier, T-Mobile, and the Apple iPhone, further strengthen our platform for the future."
RadioShack reported a 4.7% increase in the quarter's sales to $1.32 billion, up from $1.26 billion in the previous year's fourth quarter. Net income was $75.7 million. Revenue and profits for the full year were $4.28 billion and $205 million, respectively.
Day noted that the firm is rebranding its name as The Shack. In addition to deals with T-Mobile and Apple, RadioShack is planning to deploy wireless kiosks in many Target and Sam's Club stores in 2010.
After the financial results were released, RadioShack stock dropped more than 6% in early trading Tuesday as shareholders reacted to negative parts of the quarterly report. The company said there were sales declines in accessories, including GPS products, batteries, digital-to-analog converter boxes, and some video game accessories. The company said there was a $33.5 million decrease in kiosk sales brought about partially by the closure of its Sprint-branded kiosks in August of 2009.