Circuit City Disappointed With Q3 Sales23 Dec, 2004 By: Holly J. Wagner
Circuit City turned in a modest sales gain for its fiscal 2005 third quarter ended Nov. 30, even though comp-store sales slipped.
“We were disappointed with our third-quarter sales and are cautious in our fourth-quarter outlook,” said chairman, president and CEO W. Alan McCollough. “We saw a general sales weakness as the market was more promotional than we anticipated, particularly in the second half of the quarter. Our decision to be less promotional than last year in music and movie software, and business model changes in digital satellite services and wireless phones and related products added to the overall weakness.”
Total sales for the quarter increased 3.6 percent, to $2.49 billion from $2.41 billion for the third quarter ended Nov. 30, 2004, but comp-store merchandise sales slid 4.3 percent.
Third-quarter net loss from continuing operations totaled $5.9 million, or 3 cents per share, compared with a net loss from continuing operations of $28.1 million, or 14 cents per share, for the third quarter of fiscal 2004.
The net loss from continuing operations for the nine months ended Nov. 30, 2004 totaled $22.6 million, or 12 cents per share, compared with a net loss from continuing operations of $95.5 million, or 46 cents per share, for the same period last year.
Through Nov. 30, Circuit City opened 44 of a planned total of 60 superstores for the year. Half are relocations, and half are new stores. The company expects to relocate seven more superstores and open another nine this fiscal year.
Since the beginning of fiscal 2001, the company has relocated 60 stores, of which 39 have been open for more than six months. In their first full six months, those stores averaged sales that were about 31 percent higher than the sales of the balance of the store base, the company said.
The chain also plans to open 30 to 40 stores, half of which will be relocations, for the year ending Feb. 28, 2006.