Circuit City December Sales No Gift9 Jan, 2008 By: Erik Gruenwedel
Circuit City Stores Inc. December 2007 net sales, as expected, disappointed, dropping 8.9% to $1.92 billion, compared to $2.1 billion during the same period last year.
The Richmond, Va.-based No. 2 consumer electronics retailer said same-store sales (open at least 12 months) declined 12.2% in the United States to $1.81 billion, while international comp sales increased 6.5% to $110 million, from $90 million, due primarily to the weakening dollar.
“Our sales performance, while disappointing, was in line with our expectations,” said Philip Schoonover, chairman, president and CEO, in a statement.
Primary culprits included double-digit sales declines in hardware (televisions, DVD players, satellite radio, digital imaging and camcorders) offset by sales increases in flat panel TVs.
Packaged media sales, led by music CDs and DVD, declined by a “high single-digit” percentage while video game sales increased by double digits.
Service-based revenue, which included the Firedog in-home service and home theater installations, jumped 15% to $28.7 million, from $25 million last year.
Circuit City, which posted a loss of $207.3 million for the third quarter (ended Nov. 30), projected a “moderate” loss for the fourth quarter.
The CEO said the company would continue attempts to build margins by ongoing training of its sales force, marketing and pricing discipline, and achieving targeted cost reductions, among other measures.
“Our efforts to turn around the business have led to greater disruption than we anticipated,” Schoonover said. “We continue to believe that we are on the right path to return to sustainable, profitable growth.”He said he was pleased by sales over the last two weeks of the month, which, in a sense, is to wish for Christmas year round.