This is a partial transcript from Your World with Neil Cavuto, July 22, 2003, that was edited for clarity. Click here for complete access to all of Neil Cavuto's CEO interviews.
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NEIL CAVUTO, HOST: Shares of Radio Shack are moving up slightly today, up 1.5 percent, but take a look at this chart. The stock soaring 39 percent from a year ago. The electronics giant posting higher second- quarter profits, helped by strong demand for its wireless products.
Another sign that consumers are back? Let's ask Leonard Roberts. He's the man who runs Radio Shack.
Leonard, welcome. Congratulations.
LEONARD ROBERTS, RADIO SHACK CHMN. & CEO: Thanks, Neil. It's always great to be on your show.
CAVUTO: Wireless is big, isn't it? I'm surprised how big.
ROBERTS: Well, it is. We had a very, very strong quarter, 14 percent growth in this sort of weak retail environment. It's a product line, of course, that we do very well at.
We always like to remind folks that we sell more wireless phones or activate more wireless phones than all of our retail competitors combined. So it's a big business for us, and it's growing.
CAVUTO: Do you see any problem on the other side, home entertainment and accessories, that didn't do as well? Are you going to shift your focus going forward?
ROBERTS: Yes. Our focus is really on what we call our routine electronic businesses, which are the batteries and accessories and wireless and unique and innovative nichey kind of products that we're known for. We're concentrating more on those and somewhat de-emphasizing some of our home-entertainment lines.
But yes, our growth in wireless and our growth in toys, in personal electronics were, of course, offset by some weakness in the home entertainment area.
CAVUTO: Leonard, I know it's too early to tell, but beginning July 1 onward, a lot of people have seen more take-home pay in their checks. Are you noticing more foot traffic in your stores as a result?
ROBERTS: Well, in the second quarter, which was again a solid quarter for us in a very, very tough retail environment, traffic was really flat.
People are spending more, so we're happy about that. But traffic is flat with us. We have not seen any increase in traffic, although the first quarter, we did see some increase in traffic.
So we're cautiously optimistic that, if we do get the traffic increase and we have our core customer spending more with us, that bodes well for us for the third or fourth quarter.
CAVUTO: Anything you're worried about?
ROBERTS: In the retail business, you worry about every single day. We worry about unemployment. I think that this recovery looks like it's happening. If unemployment does not improve, then, you know, that's a concern for us.
But, other than that, I think we're playing our business where we're saying to ourselves that the economic environment is really not going to be a catalyst for our growth. We've got to take care what we control ourselves, and that's why we're highly focused today on the businesses that we do well at, and they're responding to our focus.
CAVUTO: And you think consumers are in general more prone to spend now?
ROBERTS: Well, they're spending with us. Again, our traffic is flat, and they're spending. Wireless phones is one of the higher-ticket items for us, so they're interested in upgrading their phones. They're interested in getting some new technology and camera phones.
And, of course, we have a whole new well-care line that they're responding to, Environizer and things — you worry about your blood pressure and better air you breath. And Zip Zaps. You couldn't even get a Zip Zap...
CAVUTO: That's right.
ROBERTS: ... last year, but Zip Zaps are very, very strong.
CAVUTO: Another big, big, big.
ROBERTS: They're still big for us...
CAVUTO: All right. Leonard Roberts, the man who runs RadioShack. Big comeback story today.
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