Circuit City reports loss of $62.8 million in 2nd quarter
Electronics retailer Circuit City Stores Inc. said Thursday that it lost $62.8 million in its fiscal second quarter on lower overall sales and continued restructuring activity.
For the quarter ended Aug. 31, the nation’s No. 2 consumer-electronics chain lost 38 cents a share, compared with a profit of $10 million, or 6 cents, a year earlier.
Richmond, Va.-based Circuit City’s revenue was $2.64 billion, down 6% from $2.82 billion in the year-earlier period. Sales at stores open at least a year, known as same-store sales, slipped nearly 8%. A year earlier, same-store sales rose 8%.
Analysts surveyed by Thomson Financial had expected a loss of 12 cents a share on revenue of $2.78 billion.
Circuit City shares fell $1.90, or 18%, to $8.67 on Thursday after sinking to a 52-week low of $8.46 earlier in the day.
“While we are not satisfied with the financial performance for the quarter, we made solid progress on our multiyear turnaround plan to increase productivity and to improve the customer experience,” Chief Executive Philip J. Schoonover said.
Schoonover said Circuit City saw a “major disruption” in the second quarter as it adopted new retail operating procedures in more than 650 stores. It also revised its management structure and modified how it evaluated employee performance. The company also opened nine stores and relocated four others during the period.
“Most of the change is now behind us” as Circuit City looks to the all-important holiday selling season, Schoonover said.
However, the CEO didn’t rule out a private acquisition of Circuit City, citing overtures by Mexican financier Carlos Slim Helu in 2003 and Highfields Capital Management in 2005.