Transcript:
Now looking forward to the back half, as Hubert remarked earlier, industry wide sales are continuing to decline in many of the consumer electronics categories in which we compete. We are also seeing ongoing softness in the mobile phone category ahead of highly anticipated new product launches. Therefore absent any changes in these declining industry trends and with limited visibility to new product launch quantities, we continue to expect comparable sales to decline in the low single digits in both the third and fourth quarter. From an operating income rate perspective in the back half, we are expecting the following business drivers versus last year. One, a similar promotional competitive environment but with better promotional effectiveness internally; two, a greater mix of online revenue that will put pressure on the overall operating income rate; three, continued industry softness and higher promotionality in Canada and China...
Q & A: This is really the first time you have given definitive guidance on your comp outlook for the all-important fourth quarter and you are now saying it will be down low single digits. Where does this number really compare to where your plan was at the beginning of the year and what really has changed if anything in terms of your guidance on the comp for Q4 specifically?
SHARON MCCOLLAM (CFO)
Alan, we certainly believed that early in the year that we would see less softness in those NPD categories. We also were more optimistic about the innovation in mobile and after last year having the Samsung Galaxy other things came out, we had a few exciting things last year. But the fact that the innovation in mobile has been pretty soft this year was different than we had hoped. Now the good news is that we have remained very conservative and you know us. We don't live on our wishes and hopes here. We live on what the data says. So based on the industry data around these categories, it still does not paint a positive picture. If you look at the people who write about this industry, even with a highly anticipated phone, not speaking to any one vendor but one highly anticipated phone launch, the saturation in the mobile phone category makes this complicated to forecast. We think it is exciting and we think the installment billing programs which by the way Hubert also called out, we are seeing an acceleration in that and it is very fast. The disruption of the carriers could be a dynamic that we did not anticipate. What is happening with the carrier plans right now which you are observing I'm sure, we did not anticipate. Now again until we see what that means, we are not going to put that into a forecast. We are looking at economic data just like you, our consumer trending data and this is what it is showing. Now that is the same data I might add that told us to tell you last quarter that Q2 would be negative low single-digit comps which is exactly where we ended up and we still in those NPD categories gained share. So that is what we are using. Could it be better? Yes. Is the acceleration of Ultra High Definition TV happening? There is no question about it.
Comment from an analyst: "If Best Buy’s top line is hurting, particularly in the mobile business, that portends incredibly poorly for RadioShack."
8 comments:
Big day for RSH, huge volume in the stock and options.
Seems like it will follow the same path as APP.
Yeah, right!
APP bonds never traded below 80.
RSH bonds have barely moved from low 40s despite stock doubling in this rally.
Heck of a squeeze then..
Will be interesting to see if they can pull off an equity offering.
Will be interesting to see if they can pull off an equity offering.
What an idiotic idea. No one is going to buy new equity in a company with bonds yielding 30%.
No one will lend more to rsh. Mgmt is rolling the dice: shareholders get diluted if lucky and chapter 11 if not. Both outcomes are negative for shareholders.
chapter 11
What is there to reorganize here?
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