Circuit City's net sales declined 4.3%, to just less than $2.5 billion, during the quarter, which ended May 31. The company posted a $54.6-million loss, compared to net earnings of $6.4 million during the same year-ago period.
Based on the company's first-quarter performance, management has withdrawn financial guidance for the rest of the fiscal year. "Combined with an uncertain macroeconomic environment, for the time being, it is difficult to project sales and earnings performance," says Philip Schoonover, chairman, president and chief executive officer Circuit City.
However, the company stuck to former store-opening plans of 60 to 65 new domestic units on top of its current portfolio of 643 locations. The new stores will be opened in Circuit City's 20,000-sf format, which is a smaller footprint than its average, 30,000-sf unit. Executives tentatively have 85 to 100 stores on tap for next year.
Part of Circuit's overall strategy going forward is to concentrate less on television sales and more on overall home entertainment and service businesses. The company is also trying to sell its Canadian division, which includes 800 stores under the names the Source by Circuit City and Battery Plus.
The company's tough first-quarter results come in as competitors Best Buy posted disappointing sales earlier this week and Tweeter Home Entertainment filed for bankruptcy last week.
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