Circuit City Fiscal Q4 Earnings Down, But Yearly Earnings Up12 Apr, 2005 By: Jessica Wolf
Circuit City Stores, Inc. reported a downturn in earnings for its fiscal fourth quarter ended Feb. 28, 2005, but noted a boost for the year overall.
Net earnings for the fourth quarter were $85.4 million, down from $89.6 million in the company's final quarter of the previous year. Revenue increased more than 5 percent, to $3.47 billion. Circuit City closed 19 underperforming stores in its fiscal fourth quarter.
But net earnings for the year stood at $61.7 million, compared to a prior-year loss of $89.3 million. Year-end sales were up 6.2 percent, to $10.47 billion.
“Our sales and earnings performance showed improvement over the prior year as the company returned to profitability for the fiscal year,” said W. Alan McCollough, in the financial statement. “We are pleased that our efforts to first stabilize and then grow gross-profit margin generated improvements during the year while we continued to rationalize our cost and expense structure.”
McCollough also said the company faces more work to “improve relevancy with the customer and unlock shareholder value.”
The company's gross-profit margin increase overall from 23.8 percent to 24.4 percent in fiscal fourth quarter 2005, but the domestic market's gross-profit margin for that time frame dipped due to competitive promotions on products like DVD players, large analog televisions and home-theater-in-a-box systems as well as aggressive year-end clearance efforts, according to the company.