Circuit City's Comp-Store Sales Rise 7% In Q1 But Flat For May

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RICHMOND, Va. -- Electronics/appliance sales at Circuit City increased 11 percent to $2.45 billion for the first quarter of the fiscal year ended May 31, with comp-stores sales up 7 percent for the quarter.

The Circuit City Group, consisting of the company's electronics/appliance stores, also reported total sales during May were $812.0 million, a 3 percent increase from $791.4 million in May 1999. However, comparable-store sales for May were unchanged.

The comparable-store sales figures exclude 31 stores where the company began significant remodeling May 1, and these stores will remain out of the comparable-store base from the beginning of the process until remodeling is complete.

"The first-quarter comparable-store sales growth was slightly ahead of our expectations, with sales exceeding our outlook early in the quarter but softening during the final month," said W. Alan McCollough, president and chief operating officer of Circuit City Stores. "Sales in April and May were affected by the shift of a weekend between the months, which added approximately 4 percentage points to the April comparable-store sales growth and reduced May's growth by a similar percentage.

"For the quarter, home office remained our strongest growing category. We also saw continued strength in better-featured products and new technologies, including big-screen televisions, DVD players and digital cameras, and in products such as entertainment software and mobile electronics. We saw a significant slowing in major appliance sales as the quarter progressed."

The percent of first-quarter sales vs. the previous year's performance by product category are: television, 18 percent, down 1 percent; VCR/camcorders, 12 percent, down 1 percent; audio, 14 percent, down 1 percent; home office, 31 percent, up 5 percent; and appliances, 14 percent, down 2 percent. All other category sales were even at 11 percent

For the entire corporation, including its CarMax operation, Circuit City reported an 11 percent increase in sales of its electronics/appliance stores to $2.45 billion for the first quarter of the fiscal year ended May 31, with comp-store sales up 7 percent for the quarter.

CarMax sales during the first quarter increased 14 percent to $3.07 billion from $2.69 billion in the first quarter of the past fiscal year. Total sales rose 6 percent to $1.04 billion in May 2000 from $977.2 million in May 1999. Total sales for the CarMax Group during the first quarter rose 29 percent to $625.3 million from $486.1 million.

Comparable-store sales for the quarter rose 14 percent. For the month of May, total sales were $223.3 million, a 20 percent increase from $185.8 million in May 1999. Comparable-store sales for May rose 10 percent.

"Although Circuit City's first-quarter sales slightly exceeded expectations, we anticipate that the merchandise sales mix will result in lower overall gross profit margins than we initially estimated," said Richard L. Sharp, chairman/CEO of Circuit City Stores. The company expects to report on June 16 complete first-quarter earnings for the company and both groups.


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