November was a strong sales month for Circuit City and Tandy’s RadioShack operations.
Circuit City said sales at its consumer electronics/appliance outlets for the month rose 6 percent to $963.1 million, to put revenue for the fiscal third quarter at $2.49 billion, up 10 percent. Nine-month sales, at an indicated $7.12 billion, were up 12.8 percent. Same-store sales were up 2 percent for the month and 10 percent on the quarter.
“Comparable store sales were lower than anticipated,” said chairman Richard Sharp, but “business strengthened during the month and over the holiday weekend.” He said Circuit’s computer sales were held back because the chain “elected not to participate” in the promotions that offered buyers $400 rebates for signing an Internet access service contract. But, Sharp said, Circuit is now going national with an offer of a $400 merchandise card for PC buyers agreeing to subscribe to CompuServe 2000 Premier Internet service at $21.95 per month. That commits them to spend $790.20 over three years.
Sharp noted that while the merchandise card must be used to purchase products or services within 90 days, it becomes available instantly, so there is no wait for a mailed rebate check. This, he said, provides “added convenience and ease during the busy holiday shopping season,” and, he added, in market tests, “the initial consumer response to this offer was exceptional.”
As for the month’s sales performance, Sharp said there was continued “strong growth in sales of big-screen televisions and products such as DirecTv, camcorders, DVD and wireless communications, all of which represent newer technologies.”
As for profitability, Sharp indicated Circuit expects to report third quarter net from the retail store operation of about $53 million, after absorbing a share of the loss from the CarMax auto retailing affiliate. That would triple last year’s earnings of $15.9 million. Nine month net would be about $37 million, after absorbing an $88 million net loss on the discontinuation of the Divx DVD business. In the same period last year the operation had net profit of $61.4 million.
During the month Circuit opened 11 new Superstores, including its first in the Bangor, Maine, area, and raised its store count to 615.
Tandy said November sales at RadioShack totaled $379.9 million, up 22 percent, and comparable stores showing a 17 percent rise.
“Our sales momentum this year extended into November, with very strong Thanksgiving weekend sales that continued through the end of the month,” said CEO Len Roberts.
“As we look ahead to the all-important month of December, we remain confident that we have exciting products and promotions in place, and that our stores are fully staffed to take care of our customers. We believe this will produce positive results for our company and shareholders,” he said.