An emphasis on mobile products, including a successful wireless kiosk program in Target stores, helped drive $53 million in profits for the second quarter.
RadioShack Corporation reported that its revenues crossed the $1 billion mark in the second quarter and that its pilot wireless kiosk program in Target store locations was so successful that it plans to introduce kiosks in most Target stores by mid-2011.
Radio Shack said its revenues were $1.01 billion and its profits were $53 million versus $965.7 million in revenues and $48.8 million in profits in the second quarter of 2009.
In recent months, Radio Shack changed its focus from being a provider of cables, batteries and other do-it-yourself electronics devices and directed attention to mobile phone offerings. The company, which has 4680 store locations in the U.S., will provide wireless kiosks to most of Target's 1740 stores. The "Bullseye Mobile" offering will begin appearing in the first wave of Target stores in mid-August.
"This quarter we increased our marketing spend to emphasize our mobility focus and we believe the overall results we achieved reflect the success of this strategy," said Jim Gooch, executive vice president and chief financial officer, in a statement. "We also increased our investment in inventory primarily related to the strong growth in our wireless platform."
Radio Shack said $52.5 million increase in sales at its U.S. company-operated stores. Kiosk sales were down $7.9 million due to a decrease in its older kiosks and the closure of Sprint-branded kiosks. The company noted that there were increases in its Sam's Club kiosk revenues.
The company offers post-paid mobile phone plans from AT&T, Sprint and T-Mobile as well as prepaid plans.
Radio Shack reported a sharp decline in sales of digital converter boxes from $54.4 million in 2009 to $8.0 million in the 2010 second quarter. Those sales were associated with the wholesale shift from analog to digital TV transmission throughout the US. Most Americans have moved off analog by purchasing new digital TVs, signing up for cable or satellite TV service, or installing digital converter boxes on their old analog TVs.
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