Circuit City posts 2Q loss, withdraws guidance

RICHMOND, Va. Circuit City Stores reported that its second quarter loss from continuing operations before income taxes, excluding $73 million of non-cash asset impairment charges, totaled $162.7 million. This adjusted result was better than the company's guided range of a loss of $170 million to $185 million, which did not anticipate the impairment charges.

"Clearly, the performance of the company is unacceptable to all of our stakeholders, and it is imperative that we take the right steps to accelerate our turnaround," stated James Marcum, vice chairman and acting president and ceo of Circuit City Stores. "The management team and the board of directors are conducting a comprehensive review of all aspects of our business to determine the best methods of delivering substantially improved financial performance and maximizing shareholder value. We recognize that this will require that we intensify our efforts to correct problems in our business. In particular, to be successful, all of our actions must start with improving the customer experience in our stores. As we move forward, we intend to improve how we operate, strengthen our market position and build a stronger future for the company."

For the second quarter net sales decreased 9.6% to $2.39 billion from $2.64 billion in the same period last year, with consolidated comparable-store sales decreasing 13.3%.

Given the initiatives underway and the comprehensive review that the company is undergoing, management believes it is prudent to withdraw its previous fiscal 2009 financial outlook at this time.