X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

RICHMOND, VA-Battered by store renovation costs and a decline in sales of DVD players and computers, Circuit City Stores Inc. saw its fiscal first quarter losses more than double in the first quarter of 2006, the electronic retailer said.

Struggling to turn around more than four years of market share losses to rival Best Buy Co. Inc., the nation’s second largest electronic retailer reported operational losses of $13.1 million, or 7 cents a share for the quarter ending May 31 following a $5.2 million, or 3 cent per share, loss in the year earlier. The net loss was greater than the 2 cents per share analysts expected. The retailer blamed the losses on the cost of revamping stores and a decline in sales of personal computers and DVD players. The company said it also lost mobile telephone sales to Bedminster, NJ-based Verizon Wireless after turning over sales of those devices to the mobile phone carrier, which now has counters within Circuit City.

“We understand we will have a lot of work ahead of us,” Circuit City Chief Executive Officer W. Alan McCollough said in a conference call with analysts Friday. “We believe we are making progress.”

The Richmond, VA-based electronics retailer did post higher than expected total sales for the year with sales rising 6.4% to $2.23 billion from $2.09 billion a year earlier due largely to sales of plasma TVs, satellite radios and other digital merchandise. Circuit City, which has more than 600 stores in the United States and 1,000 in Canada said a shortage of notebook and desktop computers caused a 10 percent decline in computer sales. DVD sales also dropped 10 percent while digital music player sales increased. Flat panel television sales also rose, more than doubling after the electronics giant added a larger selection of plasma screen sets to its inventory.

The first quarter results were in sharp contrast to those posted by Best Buy, Circuit City’s man competitor, which reported an 85% jump in quarterly profits earlier in the week. Analysts said the differing results show that Best Buy is continuing to win the battle for market share.

News of the company’s losses drove down Circuit city shares, which fell 4%, or 72 cents to $16.93 on the New York Stock Exchange by the close of business Friday.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.