Circuit City's Q2 Sales Rise 9%
By Alan Wolf -- TWICE, 9/20/2004
Richmond, Va — Richmond, Va. — Better store-level execution, strong Web-generated sales and the acquisition of Canada's InterTAN retail group in May helped propel Circuit City's total second fiscal-quarter sales 8.9 percent to $2.4 billion.
Absent the acquisition, the chain's total sales for the three months, ended Aug. 31, rose 3.4 percent to $2.2 billion, including $6.6 million in credit revenues from Circuit City's new private label and co-branded credit card arrangement with Chase Card Services.
Same store sales edged up 2.9 percent for the period.
“We believe that the second-quarter sales results reflect improvements in store-level execution and congratulate our store operations team for its focus on improving the shopping experience for Circuit City customers,” said president/CEO Alan McCollough.
McCollough noted that the shift of Labor Day weekend into September — and out of the chain's second fiscal quarter — reduced reported comp sales by more than one percentage point. Results were also impacted by softer sales in August, which “reflect a generally softer retail climate in that month,” he said.
Broken out by category, the chain enjoyed a single-digit comp sales increase in video, led by triple-digit hikes in plasma and LCD TVs and double-digit growth in DTVs and digital imaging. Those gains were offset by double-digit declines in sales of direct view TVs and DVD players, and a single-digit decline in camcorder revenue.
In audio, which was relatively flat, double-digit declines in home audio were offset by double-digit increases in portable audio, especially MP3 players, and single-digit growth in mobile audio, particularly satellite radio.
In PCs, double-digit growth in notebook models was partly offset by double-digit declines in desktops and single-digit declines in printers.
In software, video games saw double-digit declines while pre-recorded music enjoyed single-digit gains and video software was flat.
On the store front, the company opened two new locations (in Houston and here), and relocated nine units during the second quarter. It plans to open 18 additional stores, relocate another 12 and fully remodel one unit in the third quarter.
The chain was scheduled to announce its second quarter earnings results last Friday.
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