Shares of Circuit City (CC) were last down 31% to $4.60 as of 08:37, after the company posted a worse-than-expected Q3 net loss of $208M, or $1.26/share, against a net loss of $0.12/share last year. Sales were off by 3.1% to $2.96B and comparable store sales fell by 5.6%. Analysts were expecting -$0.31/share on sales of $3.0B. CEO Philip J. Schoonover said the company is "dissatisfied" with its results and said its issues (disruption of its transformation work, reduced higher-margin accessory and services sales, as well as lower extended warranty net sales) are "primarily self-induced" and "within its control to improve." (Earnings call transcript later today).
Circuit City is undergoing a transformation initiative of cost cutting and store remodeling/relocating/closing. The company expects annual expense savings of $150M this year and $200M by fiscal 2009. Circuit City projected a "modest" loss from continuing operations before income taxes for the current quarter, assuming continuation of current sales and margin trends. The company said comparable store sales increased double-digits over the Thanksgiving weekend. Shares of Circuit City were unchanged on Thursday at $6.66. Rival Best Buy (NYSE:BBY) posted better-than-expected earnings on Tuesday (full story).
Additional Reading: CompUSA Closure May Impact Other Electronics Vendors • Circuit City: Management Fails Once Again