Circuit City's Q1 Net Climbs

Richmond, Va.— Spurred by continued progress in the both the high-service and packaged goods arenas, as well as strong sales growth in focus categories such as video and wireless communications, the Circuit City group posted higher net earnings in its fiscal first quarter.

Net earnings for the Circuit City Group in the first three months, ended May 31, climbed to $17.5 million, up from $10.1 million in the same three months last year. These figures include earnings attributed to reserved CarMax Group shares.

Excluding earnings attributed to CarMax Group shares, the Circuit City Group registered a loss of $1.3 million in the first quarter, but this was down substantially from a loss of $9.6 million year over year.

As reported, the Circuit City Group posted a 13 percent increase in fiscal first quarter sales. Sales reached $2.1 billion, up from $1.9 billion in the year-ago period.

Comp-store sales jumped 12 percent, but this figure benefited from the low numbers registered in the same quarter last year, when comps fell 25 percent.

"Our comparable store sales pace strengthened as the first quarter progressed, reflecting the growing consumer response to our customer service initiatives, aggressive promotions in traffic-building categories and in entry-level products, and a stronger inventory position in specific product categories," said Alan McCollough, president/CEO.

Zeroing in on category growth for the three months, the Circuit City Group cited big-screen televisions, DVD players, digital satellite systems, DVD software and video game hardware. The retailer noted improving trends in information technology products, with PC sales growth driven by strong sales of notebook computers. It also emphasized a more competitive promotional stance, compared with the same quarter in 2001.