Circuit City's Losses Widen



Circuit City's woes continue. Here's the Associated Press report on its earnings:

RICHMOND, Va. -- Electronics retailer Circuit City Stores Inc. on Friday reported a wider-than-expected loss for the third quarter, driven by lower extended warranty sales and restructuring costs.

Circuit City shares fell 21 percent to $5.30 in premarket trading, having closed Thursday at $6.66.

For the three months ended Nov. 30, losses ballooned to $207.3 million, or $1.26 per share, from $20.4 million, or 12 cents per share, a year ago. Excluding tax-related accounting items, losses totaled 64 cents per share in the latest period.

Sales slipped 3 percent to $2.96 billion from $3.06 billion a year earlier, with sales at stores open at least a year falling 5.6 percent.

The results missed consensus estimates of analysts polled by Thomson Financial, who predicted a loss of 31 cents per share on revenue of $3 billion.

"We are very dissatisfied with our third-quarter results," said Philip J. Schoonover, chairman, president and chief executive, in a statement. Schoonover said he believes the issues are "primarily self-induced" and within the company's control to improve.

Looking ahead, the company said that assuming current sales and margin trends continue for the rest of the fourth quarter, it will report a "modest" pretax loss from continuing operations for the quarter.

Here's the full press release on their earnings report.

By Dan Beyers  |  December 21, 2007; 8:19 AM ET  | Category:  Retail
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Comments

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"...driven by lower extended warranty sales..."

Their extended warranty sales are down because they don't honor their agreements. I'll be glad to see them start closing stores.

Posted by: PowerBoater69 | December 21, 2007 9:21 AM

Circuit City's failures are self-inflicted and well-deserved, even the CEO admitted that they are "self-induced." A good question would be why?

More than once recently I've gone to my nearby, very convenient Circuit City store to attempt to purchase items in their weekly ad--and left empty-handed.

It's not that I was too late to buy a very popular item. There seem to be two standard excuses: that they didn't receive the item, or that they haven't unpacked the shipment yet.

Most recently I found the items at a more distant, less convenient Circuit City store, but going there is a hassle and waste of time.

When I wrote to Circuit City about my latest experience, I received one of the lamest, most useless responses I've ever seen--a response that failed completely to address my specific complaints.

I haven't been back, and I'm now much more likely to drive 18 miles to Best Buy than less than half a mile to Circuit City. Not because the prices are better, but because Best Buy seems more willing to stack what they advetise and sell what I want.

It seems to me that it should be obvious that Circuit City sales will go down when they don't have stock to sell, but I'm just a dumb customer, not one of the whizzes driving the company downhill, so what do I know?

Posted by: John M. Scroggins | December 21, 2007 12:56 PM

Compusa failures are self-inflicted and... oh, I sorry I thought I was commenting on Compusa electronics store that is going down the tubes. It sounds so familiar, lousy service, no merchandise and no clue as what to do to turn around the business.

Posted by: Behr22 | January 8, 2008 6:42 PM

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