Circuit City Revises Outlook and Posts Loss

Tuesday, September 30, 2008 9:45

Posted in category Circuit City

Circuit City Stores posted a wider quarterly loss and withdrew its fiscal 2009 outlook Monday amid sluggish sales, poor traffic and heightened competition.

Circuit City, which ranks behind Best Buy among the nation’s consumer electronics retailers, said it lost $239.2 million, or $1.45 a share, compared with a loss of $62.8 million, or 38 cents a share, a year earlier.

Sales in the period, which ended Aug. 31 and was the second quarter if Circuit City’s fiscal year, declined 10 percent, to $2.39 billion, from $2.64 billion. Sales at stores open at least a year fell 13.3 percent.

Analysts surveyed by Thomson Reuters expected a loss of $1.04 a share and $2.53 billion in sales. Circuit City’s stock fell 29 cents, or 21 percent, to $1.08 a share.

“We realize the performance of this company is unacceptable to all of our stakeholders and that it is imperative that we take the right steps to accelerate our turnaround,” James A. Marcum, the acting chief executive, said in a conference call with investors.

Mr. Marcum was named vice chairman and acting president and chief executive last week after the resignation of Philip J. Schoonover, who had been under fire for the last year as financial results weakened.

“We must get back to the basics and, make no mistake, this is all about our customers,” Mr. Marcum said.

The company also said it was “prudent” to withdraw its previous outlook for fiscal 2009 and suspended store openings beginning with fiscal 2010.

In the second quarter, Circuit City’s video sales fell by nearly 10 percent as flat-panel televisions rose slightly, but not enough to offset a sharper decline in tube and projection televisions. Sales of camcorders and DVD hardware fell by more than 10 percent.

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Source: New York Times
Posted by: Geoff Caplan
http://geoff-caplan.com