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RICHMOND, VA-Just days after its chief competitor BestBuy posted disappointing financial results, CircuitCity Stores Inc. reports earnings of $1.4 million, or 1 cent ashare, for the quarter ended Aug. 31, compared to aloss of $11.9 million, or 6 cents per share, for thesame period last year. Analysts were expecting a three-cent loss according to Thomson First Call.

It’s the first time Circuit City has achieved asecond-quarter profit in five years, according to thecompany’s earnings press release.

Adding to the positive results, the retailer posted a comparable store sales gain of 5.3% and an 8% sales increase to $2.56 billion in the quarter from $2.38 billion for the same period last year. The increases were driven by double-digit comparable store sales growth for televisions sales and digital imaging. Specifically, flat-panel televisions experienced same-store sales growth in the triple digits.

“While I am proud of the work that we did in thesecond quarter, we still believe that improving thecustomer experience in our stores is our bestopportunity,” said Circuit City president Philip J.Schoonover during the company’s earnings conferencecall.

The retailer has tapped global consulting firm McKinsey& Co. to assist it in re-crafting its customerexperiences. According to Schoonover, the company willwork with McKinsey during the next 100 days to improvethe customer experience within Circuit City stores.

Looking forward, the retailer increased its salesgrowth forecasts from 3% to 6%, to 5% to 8%. Similarly,the company expects its domestic comparable storesales to increase from the low- to mid-single digitrange; previously, the company said it expectedcomparable store sales growth in the low-single digitrange.

The retailer also announced that it would be openingfewer superstores in fiscal 2006 than previouslyexpected. The company’s previous expectation was 30 to40 new and relocated superstore openings, and thecompany now plans to open roughly 25 stores. As ofAugust 31, Circuit City operated 1,712 stores in theUnited States and Canada.

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