Circuit City Q1 loss triples on lower same-store sales

Lee Stewart · 06-19-2008, 04:48 PM

Circuit City Q1 loss triples on lower same-store sales

Videogame increase dragged by decline in home theater

Quote:

By Danny King -- Video Business, 6/19/2008
JUNE 19 | Circuit City’s fiscal first-quarter loss tripled as same-store sales declines in home-theater installations, video equipment and camcorders dragged down a boost in videogame products and a small increase in flat-screen TV sales.

The company, the subject of a buyout offer from Blockbuster this year, also discontinued its dividend payments and filed for a so-called “shelf registration” with U.S. regulators to allow the company to respond more quickly to acquisition bids.

The net loss for the No. 2 U.S. electronics retailer for the quarter ended May 31 widened to $164.8 million, or $1 a share, from $54.6 million, or 33¢, a year earlier, the company said this morning. Revenue fell 7.4% to $2.3 billion as less foot traffic dropped same-store sales by 11%.

Circuit City has been trying to cut losses amid both an economic downturn in the U.S. and increased competition from U.S. electronics chain-store leader Best Buy and Internet retailers such as Amazon.com. Best Buy this week said fiscal-first-quarter revenue rose 13%, though profit dropped on more sales of lower-margin videogame consoles.

“The economy’s tough,” Circuit City chief financial officer Bruce Besanko said on a conference call with analysts this morning. “It’s not helping us right now.”

The company was expected to lose $1.07 a share on $2.37 billion in sales, the average estimates of analysts in a Thomson Financial survey. Shares fell 1.7% today after Circuit City said its fiscal second-quarter loss would widen by as much as 44%.

Same-store revenue from home-theater installations plunged 16% as many of the company’s bundling promotions a year ago are no longer used because of its efforts to cut costs and boost gross margins, CEO Philip Schoonover said on the call.

Last month, Circuit City hired Goldman Sachs to explore strategic alternatives for the company, four weeks after Blockbuster said it made an unsolicited bid for Circuit City in February. Circuit City questioned whether Blockbuster had the financing for the acquisition, though allowed the company to continue its due diligence.

Circuit City today said it filed for a shelf registration, which facilitates the company’s ability to issue shares. The filing allows Circuit City “maximum flexibility” to respond to offers, said Besanko. None of the company’s executives mentioned the Blockbuster bid on today’s call.

In May, the company also reached an agreement with shareholder and former Hollywood Entertainment founder Mark Wattles, who owns 6.5% of the company and had been critical of the company’s turnaround efforts, by including three of his nominees as candidates for its board.

http://www.videobusiness.com/article...?desc=topstory

bmore · 06-19-2008, 04:54 PM

Hey BobY...notice how they compared year to year sales? Hmm...what a crazy concept! You better alert them to your superior method of comparing back to back weeks as a growth indicator.

**kamspy** · 06-19-2008, 04:56 PM

Videogame increase vs decline in traditional home theater eh?

Do the math

Lee Stewart · 06-19-2008, 05:08 PM

Guess BD isn't saving the day over at Circuit City.

**kamspy** · 06-19-2008, 05:10 PM

Quote:

Originally Posted by Lee Stewart

Guess BD isn't saving the day over at Circuit City.

Hell no their not.

Circuit City charges full MSRP on HDM unless there's a sale.

They don't have to. Wal-Mart doesn't. Meijer doesn't. Amazon doesn't. Hell, even Best Buy takes a little bit off the top.

The only thing I've ever bought from them was my A20, and that was only because they were the only local store that still had any HD DVD hardware. And it was $50 new.

bmore · 06-19-2008, 05:13 PM

Quote:

Originally Posted by Lee Stewart

Guess BD isn't saving the day over at Circuit City.

Guess HD DVD AND upconverters didnt help them either

Lee Stewart · 06-19-2008, 05:21 PM

Quote:

Originally Posted by bmore

Guess HD DVD didnt help them either

Guess you didn't hear that the format war is over and HD DVD is gone.

You know . . I am positive about that one.

bmore · 06-19-2008, 05:24 PM

Quote:

Originally Posted by Lee Stewart

Guess you didn't hear that the format war is over and HD DVD is gone.

You know . . I am positive about that one.

updated it.

MikeRox · 06-19-2008, 05:35 PM

Quote:

Originally Posted by bmore

Guess HD DVD AND upconverters didnt help them either

They shouldn't have dropped HD DVD

their profits would have trebled if they'd stuck that out

hatt · 06-19-2008, 05:54 PM

Does this mean BD is finished because Circuit Chitty is losing money since people have figured out they suck?

MikeRox · 06-19-2008, 05:58 PM

BD is the whole reason for this, can't you see? They were only losing 33% as much money when they had HD DVD on shelves

now that HD DVD has gone, it's got worse

hatt · 06-19-2008, 06:04 PM

Quote:

Originally Posted by MikeRox

BD is the whole reason for this, can't you see? They were only losing 33% as much money when they had HD DVD on shelves

now that HD DVD has gone, it's got worse

Barring them from getting the exclusive rights to sell a machine that prints money, I really can't see how they will ever make money. I went there awhile back to demo the new at the time Onkyo recievers and they didn't even have em hooked up.

MikeRox · 06-19-2008, 06:06 PM

Circuit City are buying Nintendo? o_O

**kamspy** · 06-19-2008, 06:07 PM

Quote:

Originally Posted by hatt

Barring them from getting the exclusive rights to sell a machine that prints money, I really can't see how they will ever make money. I went there awhile back to demo the new at the time Onkyo recievers and they didn't even have em hooked up.

Quote:

Originally Posted by MikeRox

Circuit City are buying Nintendo? o_O

Or possibly the exclusive rights to sell HDMI DVD players.

hatt · 06-19-2008, 06:08 PM

Quote:

Originally Posted by MikeRox

Circuit City are buying Nintendo? o_O

No, I mean a machine that you put cotton paper in one side and $100 bills come out the other. In other words, close to Nintendo but a little better.

06-19-2008, 05:58 PM	#11
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	BD is the whole reason for this, can't you see? They were only losing 33% as much money when they had HD DVD on shelves now that HD DVD has gone, it's got worse __________________ REGION B 4TW! Latest HD additions - I Love You Man - 17 Again - Born on the 4th of July - Paul Blart: Mall Cop - Monsters, Inc. HD Movies - Um... Lost count >_< bout 250 Latest Gaming Additions - Mirrors Edge - Scene It BOS - Wartech: Senko No Ronde - Lego Indiana Jones/Kung Fu Panda 2 pack - Silent Hill

06-19-2008, 06:06 PM	#13
MikeRox Blu Blu Skies! :D Join Date: May 2007 Location: Huddersfield, United Kingdom Posts: 12,416	Circuit City are buying Nintendo? o_O __________________ REGION B 4TW! Latest HD additions - I Love You Man - 17 Again - Born on the 4th of July - Paul Blart: Mall Cop - Monsters, Inc. HD Movies - Um... Lost count >_< bout 250 Latest Gaming Additions - Mirrors Edge - Scene It BOS - Wartech: Senko No Ronde - Lego Indiana Jones/Kung Fu Panda 2 pack - Silent Hill

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06-19-2008, 04:54 PM	#2
bmore ___ Join Date: Apr 2008 Posts: 2,173	Hey BobY...notice how they compared year to year sales? Hmm...what a crazy concept! You better alert them to your superior method of comparing back to back weeks as a growth indicator.

06-19-2008, 04:56 PM	#3
kamspy Esteban Moderatoro Join Date: Dec 2007 Location: Cincinnati,OH Good Posts: 12 Posts: 13,048	Videogame increase vs decline in traditional home theater eh? Do the math

06-19-2008, 05:08 PM	#4
Lee Stewart Behold - the future! Join Date: Jan 2007 Location: Albuquerque, NM Age: 58 Posts: 25,190	Guess BD isn't saving the day over at Circuit City.

06-19-2008, 05:54 PM	#10
hatt HD Elitist Join Date: Jan 2008 Location: FL Age: 34 Posts: 4,921	Does this mean BD is finished because Circuit Chitty is losing money since people have figured out they suck?