Circuit City Posts Loss, Withdraws Earnings Forecast
New York City, Circuit City Stores on Wednesday posted a quarterly loss that it called disappointing and withdrew its earnings forecast, citing a drop in television sales and an uncertain economic environment. The company reported a loss of $54.6 million from net income of $6.4 million for the fiscal first quarter. Net sales declined 4.3% to $2.49 billion from $2.60 billion. Same-store sales slipped 5.6%. In the year-ago period, same-store sales rose nearly 15%. The company said its profit margins fell due to a drop in domestic sales of extended warranties and on increased sales of lower-margin personal computers.
"While I am disappointed with the large net loss for the first quarter, we met our revised guidance while up against our toughest comparable-store sales increase comparison of this fiscal year," Circuit City chief executive Philip J. Schoonover said in a statement. "We made significant and substantial changes to improve Circuit City and position the company to compete while facing economic uncertainty in the near term and new realities in the consumer electronics marketplace over the longer term."
Circuit City said total television comparable store sales decreased sharply, as a significant drop in projection and traditional tube televisions more than offset growth in flat-panel televisions.