Circuit City reports Q1 loss as US shoppers unplug
Sales tumble more than 7%
Ailing US electronics retailer Circuit City yesterday posted a first quarter loss and another slide in revenues.
The Richmond, Virginia-based firm reported that net loss widened to $164.8m, or $1 a share, for the period ended 31 May 2008, compared to $54.6m, or 33 cents, a year earlier.
Sales at Circuit City dropped a painful 7.4 per cent to $2.3bn in Q1.
Meanwhile, stores that have been open for at least 12 months failed to scoop up much needed revs at the firm, with sales falling 11 per cent in the quarter.
Chief exec Phil Scoonover had hoped that adding new Circuit City stores would help get the firm back on its feet and reclaim market share from US rivals Best Buy and WalMart. Yesterday’s numbers tell a different story, however.
The retailer lowered its current quarter forecast and suspended future dividend payments to save cash.
For the year ending early 2009, Circuit City said its forecast was “relatively unchanged.” It expects a Q2 loss before income taxes of $170m to $185m.
The company has been under immense investor pressure in recent months to increase its stock price. In early May Circuit City ran up the white flag by putting itself up for sale. Blockbuster Inc. and billionaire Carl Icahn duly stepped forward to discuss possible offers.
Blockbuster, which has faced less-than-pretty financial results of its own over the past year, had said it may offer as much as $1.35bn for Circuit City. ®