Same store sales were up 2%, but gross margin in the period should come in at 35%, down from the 41% reported last year. The decline in margin comes from a change in the mobility products being sold as buyers gravitated toward lower margin smartphones and mobile devices. Besides blaming Sprint's post-paid business, Radio Shack also noted that "further unanticipated changes in Sprint’s customer and credit models" had an impact on revenue.
Radio Shack isn't passing the hat around just yet. At the end of the quarter, it had $590 million in cash, up $21 million from the 2010 quarter. It also has $421 million available to draw down on a $450 million revolving credit facility. Still, in order to continue paying dividends and invest in the business, Radio Shack will stop share repurchases.
Radio Shack shares are down 20% after-hours to $8.21.