Circuit City Issues 3rd-Quarter Warning

Circuit City Group said its fiscal third-quarter loss would be about four times bigger than analysts’ estimates as remodeling hurt sales and increased costs. The electronics retailer said it would report a loss of 31 cents to 33 cents a share for the quarter ending today. Analysts’ average estimate was a loss of 8 cents, according to First Call/Thomson Financial. Circuit City cut prices more than expected to compete with such rivals as Best Buy Co. and gave away DVD players and other goods to woo Thanksgiving weekend shoppers. Even with the promotions, Circuit City’s same-store sales fell 10% in the quarter, while Best Buy’s rose 5.9%. Circuit City has said four times in the last six months that profit would be less than expected. The warnings followed the company’s decision in July to stop selling appliances and focus on big-screen televisions, DVD players and other electronics that have bigger profit margins. Price markdowns on appliances hurt profit by 6 cents a share, the company said. Shares of Richmond, Va.-based Circuit City fell $3.13, or 25%, to close at $9.63 on the New York Stock Exchange. The stock has fallen 71% in the last year.