May, Circuit City Warn on Earnings
Add two more names to the list of retailers struggling to regain investors’ trust:
* St. Louis-based May Department Stores said Thursday that fiscal third-quarter profit will fall on slow back-to-school sales.
* Richmond, Va.-based Circuit City Group said its quarterly results will be hurt because costs to leave the appliance business were greater than expected.
May’s shares (MAY) fell $1.31 to $22.38 on the NYSE, near a four-year low. Circuit City (CC) lost $1.50 to $26.50 on the NYSE; its shares are down 60% this year.
May said this quarter’s earnings will be 23 cents to 26 cents a share, compared with the 38 cents it earned last year. May was expected to earn about 38 cents this quarter.
To clear excess inventory from summer fashions that didn’t sell, May will slash prices, it said. The company also will sell leftover goods to intermediaries who will send the goods to discount chains.
Meanwhile, May said early sales of fall products are encouraging.
Circuit City said earnings at its consumer-electronics chain will be 21 cents a share for the quarter ended Aug. 31, less than the 23 cents expected. But the company overall will meet earnings expectations thanks to higher profit at its CarMax Group, it said.
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No Spring in May
May Department Stores (ticker symbol: MAY) on Thursday joined the growing list of retailers warning that near-term earnings won’t meet forecasts.
Monthly closes and latest on the NYSE
Thursday: $22.38, down $1.31
Source: Bloomberg News
