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Circuit City Posts 2Q Loss


Atlanta, Circuit City Stores reported a wider-than-expected second-quarter loss on Thursday, as sales sagged for desktop computers, projection and tube TVs.

The retailer, which is cutting jobs and changing store procedures in a bid to turn business around, said it expected a loss from continuing operations for the third quarter and full year, but forecast a profit for the fourth quarter that includes the Christmas holiday.

The loss came to $62.8 million for the second quarter that ended Aug. 31, compared with a profit of $10 million a year earlier. Sales fell 6.2% to $2.64 billion, while same-store sales fell 7.9%.

In the United States, same-store sales fell 8%. Circuit City said U.S. Web and other direct-channel sales rose 20%, while computer-service and home-theater installation revenue rose 22%.

Company officials still plan to open 60 to 65 new and relocated U.S. superstores in fiscal 2008, and two-thirds of the openings will be 20,000-sq.-ft. stores. The results came two days after larger rival Best Buy reported an 8.7% profit increase on revenue of $8.75 billion, beating analysts’ expectations. Best Buy also offered a bullish forecast for the rest of the fiscal year.

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