Circuit City Sold on Flat Screen20 Sep, 2006 By: Erik Gruenwedel
Double-digit sales growth of flat-panel TVs — despite six consecutive quarters of triple-digit growth — didn't stop Circuit City Stores Inc. from posting second-quarter (ended Aug. 31) earnings of $10 million, compared to $1.3 million during the same period last year.
Comparable same-store sales increased 8.3%, which helped the Richmond, Va.-based retail chain post revenue of $2.8 billion, compared to $2.5 billion last year.
In the entertainment category, Circuit City produced a mid-single-digit comparable store sales increase, reflecting a double-digit comp store sales increase in gaming products and PC software and a mid-single-digit increase in movies, partially offset by a double-digit comp store sales decrease in music software.
Following similar initiatives by competitors Best Buy and Fry's Electronics, among others, Circuit City is emphasizing home theater sales and service for the holidays, revamping in-store home entertainment offerings and layout in 500 select stores.
“The flat-panel business is still fundamentally strong,” said Philip Schoonover, chairman, president and CEO of Circuit City, in an investor call. “We see a five-year calculated annual growth rate of about 15%. We expect to capitalize on that in television sales.”