4/28 - "...profit improvement came only from the corporate level; unit-level operating profits per store actually fell (6%), similar to the (7%) decline in the fourth quarter. Mere stabilization in store-level profits would enable us to pay a more respectable multiple for the stock, but the firm needs to tackle the challenge of sustaining its top-line profitably to get there."
"We are trimming our forecasts to reflect the 1Q shortfall; a more subdued margin outlook, particularly for 2Q2008; and, a slower rate of buybacks, given management’s hesitancy to repurchase stock aggressively in the...
4/29 - "Excluding a $2.9mn tax credit, adjusted 1Q08 EPS was $0.28 vs. our $0.30 estimate. 1Q was the last quarter RSH will profit from (headquarter) cuts in 2007. We continue to believe 2007 margin expansion was a one-off, and margins and earnings will fall in 2008. We expect EPS to fall to $1.45 in 2008 when RSH anniversaries the cost reductions of 2007."
"Gross profit dollars decreased $32mn or 7% in Q1 on an adjusted basis vs. the reported GAAP decline of $46mn. The decrease was mostly due to aggressive pricing in an increasingly competitive environment and a continued mix shift toward...
4/28 - "Part of my thesis for RadioShack is that declines are already priced in...Still, my cautious side has limited my willingness to accept exposure to the stock...I’ve said I’d accept a return in line with that of RadioShack debt – which reflects the company’s relative risk and allows for a modest premium based on the more favorable tax treatment of equity returns."
"After the article (which was positive on RadioShack) I bought the April puts for an effective price of $0.60 per share, and they expired worthless. I reloaded that position by writing May puts at the same $0.60, and time ...
3/4 - "Our thesis on RSH remains the same. Without top-line growth, margins will decline despite very impressive cost cutting and controls. Further, achieving growth is difficult to do without giving up gross margin. Given recent deterioration in the retail environment and accelerating problems with one of RSH’s most important business partners (Sprint), we do not see top-line issues being resolved this year."
"We are leaving our 2008 EPS forecast unchanged at $1.35, still well below the consensus average at $1.62. We are reducing our 2009 EPS forecast to $1.30 from $1.35 and initiating a ...
3/7 - "We continue to believe that RSH margins will fall starting in 2Q 2008. The 2007 margin expansion story played out, and 4Q was no exception. However, gross margin dollars continue to fall and the company will cycle SG&A cuts after 1Q08...FCF improved in 2007 to $300mn; we don’t think this is sustainable. We expect FCF to fall back to $200mn...Capex fell to $45mn in 2007, the lowest level since at least 1985. We have argued this is not sustainable and management appears to agree. Capex will double in 2008 to $80mn-$100mn."
"Our thesis remains that RSH is a decaying business model wher...
2/28 - "Mostly selling accessories, batteries and other gadgets for wireless products, RSH said net income rose to $101 million, or 77 cents a share, from $84.5 million, or 62 cents a share, a year earlier. Net Income was favorably impacted by improved gross margin, a reduction in SG&A, and reduced interest expense when compared to the prior year."Analysts" had expected 72 cents a share.
Revenue fell 6.4% to $1.36 billion, as same-store sales dropped 6.7% on lower wireless and satellite-radio sales."
"The best number was that the chain generated $300.9 million in free cash flow through th...
3/17 - "The valuation is certainly cheap, at ten or eleven times earnings. My preferred measure, the free cash flow yield, is a downright juicy 14.3%. With that kind of cash flow yield, RSH could generate double-digit returns even if cash flow declined 4.3% per year...the rally following the latest earnings report has given the shares some fragile support. Given the state of the economy and particularly RadioShack’s wireless exposure, I think the company will eventually stem the bleeding to within my acceptable range, but probably not this year."
"I think the doubt can be addressed by usin...
But it should be worth buying as long as they can limit their cash flow declines to 5% or so annually.
Combined with a put-write strategy, it looks even better.
RadioShack (RSH) is a company investors love to hate, and it isn’t hard to see why. Stocked full of stuff you occasionally need but often find elsewhere, it represents the unsexy part of consumer technology – wires, batteries and cables that you forgot to pick up when you got the HDTV or game console at your local Circuit City (CC) or (more li
When it was first announced back in July of 06 that Julian Day would be the new CEO of Radioshack (RSH), the stock went from $13 and change to $17 in one day! I was saying to myself, "that's a lot of hype. Can one person make a difference in a company? " Granted, he was part of the miraculous recovery helping Eddie Lampert revive Kmart to become Sears Holdings. Fast forward to now and it
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About RadioShack Corp
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