Circuit City remains optimistic, despite 2Q loss

RICHMOND, Va. Circuit City Stores today reported a decline in net sales for its second quarter ended Aug. 31 of 6.2% to $2.64 billion from $2.82 billion in the same period last year. The company said this was driven by a comparable-store sales decline of 7.9%. In the same period last fiscal year, the company posted total sales growth of 11.1% and comparable-store sales growth of 8.5%.

The company reported a loss from continuing operations of 38 cents per diluted share compared with earnings from continuing operations of 7 cents per diluted share in the prior year.

Despite its poor performance in the second quarter, Circuit City remains confident in its turnaround plan.

"While we are not satisfied with the financial performance for the quarter, we made solid progress on our multi-year turnaround plan to increase productivity and to improve the customer experience," said Philip Schoonover, chairman, president and ceo of Circuit City Stores. "We expected the changes to be disruptive in the near-term, but necessary to deliver long-term profitable growth through our four areas of strategic focus - home entertainment, new store openings, multi-channel and digital home services.

The company said it anticipates third quarter results to be weak, but slightly better then the second quarter, with a net loss from continuing operations less than that of the second quarter. The company said the improvement will result from stabilizing performance levels as the pace of change slows in both the stores and the store support center. The company expects to deliver a net profit for the fourth quarter and a full-year net loss from continuing operations.