Weak RadioShack Quarter Reflects Slow Sprint PCS Sales

[TNDan21]

Weak RadioShack Quarter Reflects Slow Sprint PCS Sales
By Wireless Week Staff
January 3, 2003
news@2 direct
Sprint PCS problems with customer activations helped drag down the fourth quarter performance of the nation's biggest independent wireless retailer, RadioShack Corporation, but the store chain sees improving performance up ahead.

RadioShack told financial analysts today that its fourth-quarter earnings per share expectations were for a profit in the range of 58 cents to 60 cents per share, less than its earlier forecasted range of 63 cents to 68 cents. The company pointed to slow sales of accessories related to DVD players and radio controlled toys for the reduction but also fingered weaker than expected sales and gross margins for Sprint PCS products beginning in November.

RadioShack also told analysts that the growth rates for Sprint - which typically gets about 25 percent of its gross subscriber additions through RadioShack - were slowed by a new customer activation process that took longer than expected. Lehman Brothers noted that the timing of the slowdown also coincided with the reinstitution of a deposit requirement for the carrier's ClearPay product, which also had a well-publicized negative impact on Sprint's subscribership in the third quarter.

Lehman noted in a commentary that sales of Verizon Wireless products carried by RadioShack were strong in the fourth quarter, indicating that overall wireless customer demand was evident. However, both Circuit City and Best Buy also have reported weaker than expected sales due partly to the performance of wireless.

Lehman's John Bensche now estimates that Sprint had about 185,000 net subscriber adds in the fourth quarter.

Sprint's PCS tracking shares were down more than 9 percent in mid-day Eastern time trading.

Weak RadioShack Quarter Reflects Slow Sprint PCS Sales

[jmccrane]

I loved when we could sell SPCS without having to activate in the store. Thsi new process is a mistake and it's just unnecessary. It takes too much time away and is hard when (often) I would be with only 1 or 2 other people working at RS at the time.

On a side note, RS's problems aren't all on Sprint sales. The company needs to refocus on its core business (accessories, cables, etc.) and stop trying to be a mini-Best Buy. RadioShack does sell quality stuff in cables, accessories, cordless phones, etc. It's also a good place to buy a cell phone. The problem is that the high-level menagement forgets that RS sells more than just satellite dishes and cell phones.

[ILUVSOCAL]

As a former employee, I can tell you they need to pay their workers a lot more money, and give them commission and salary, not one or the other. They will continue to get non college educated people and inexperienced HS students working there and a high turnover rate as long as they keep this up.

[jmccrane]

Originally posted by: ILUVSOCAL
As a former employee, I can tell you they need to pay their workers a lot more money, and give them commission and salary, not one or the other. They will continue to get non college educated people and inexperienced HS students working there and a high turnover rate as long as they keep this up.

Yes! The current pay system is a joke. With all the commission I made as the top salesmaker in a moderate-volume store I still averaged around $6.50 an hour. I left to start college after this past summer and I won't go back.

To RadioShack customers: It's not a terrible place to shop and generally the employees are treated well (flexible schedule, not overly stressful, etc.), but the company has to pay the employees a better wage.


BTW, if you worked in California you benefitted from a higher minimum wage ($6.50 or $6.75). The rest of us aren't so lucky, and my hourly base was $5.15 (increased to $5.30 before I left), which is standard for the company.

[ILUVSOCAL]

BTW, if you worked in California you benefitted from a higher minimum wage ($6.50 or $6.75)

That's still a joke, the cost of living requires twice that to live.