EmailRadioShack (RSH $7.28 -2.95) issued guidance for the fourth quarter with EPS of $0.11-0.13 versus the $0.36 consensus with revenues of $1.39 billion versus the $1.35 billion consensus. Comparable store sales for company-operated stores increased approximately 2% during the 2011 fourth quarter. Consolidated gross profit as a percent of net sales in the 2011 fourth quarter is expected to be approximately 35%, compared to 41% in the 2010 fourth quarter.
The decrease in gross margin in 4Q11, compared to4Q10, reflects a shift in mix within mobility sales towards certain lower margin smartphones and mobile devices; a higher percentage of mobility sales in the overall revenue mix, largely driven by the company's expansion of Target mobile centers; and the impact of a more promotional holiday season.
The company's results for the fourth quarter are due in large part to the underperformance of the Sprint (S $2.12 -0.04) postpaid wireless business and reflect further unanticipated changes in Sprint's customer and credit models. These changes resulted in fewer new and upgrade activations and a QoQ and YoY decline in Sprint postpaid revs in Q4. In addition, Q4 results reflect a highly promotional holiday season and ongoing pressures on consumer spending. During Q4, the co repurchased $11.9 million, or 930K shares, of its common stock.
