Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Circuit City Gets Routed


Brief scrutiny of today's headlines.

Circuit City Stores (CC) reported a wider-than-expected second-quarter loss and withdrew its financial forecast for the year.

The electronics retailer reported a loss of $239.2 million, or $1.45 a share, compared with a loss of $62.8 million, or $0.38, a year ago. Without non-cash asset impairment charges, the loss totaled $1 a share. Analysts expected a loss of $1.04.

Sales fell about 10% to $2.39 billion as lower US sales undercut an increase in international sales. Analysts expected companywide sales to total $2.5 billion.

Same-store sales, or sales at stores open at least a year, declined 13.3%. Sales in TVs, video games and computers also fell.

Bruce H. Besanko, Circuit City's Executive Vice President and CFO, said:

"Our sales were below plan for the quarter, driven by a significant decline in traffic, which we believe reflects the worsened macroeconomic environment, competitive pressures and a weakened brand position...While we have continued to gain traction in key areas, such as improving the close rate trend, rebuilding our selling culture and delivering a better customer experience in our stores, the progress we have made to date has not been sufficient to reverse our overall business results."

Circuit City said it plans to halt new store openings starting with its fiscal year 2010 and will focus on boosting sales. The company faces intense competition from Wal-Mart (WMT) and Best Buy (BBY).

Last week, Circuit City announced the immediate departure of Chairman and CEO Philip Schoonover. The company named James Marcum acting CEO.

In June, Circuit City said it expected sales to be relatively unchanged from last year and looked for earnings to increase one-half, to 1%. The company withdrew the outlook after reporting its second-quarter results.

Actionable ideas, instant analysis. Real-time from bell to bell.
Minyanville's Buzz & Banter - 14 day FREE trial

No Position in Stocks Mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos