The troubles are deepening at electronics retailer Circuit City (CC).
The company this morning posted revenue for its fiscal second quarter ended August 31 of $2.39 billion, well short of the Street consensus of $2.53 billion. The company lost $239.2 million, or $1.45 a share in the quarter, including a $73 million asset impairment charge. Circuit City notes that the loss before the charge was actually a little lower than expected. But that’s irrelevant: The business clearly is getting into even deeper trouble.
In a statement, CFO Bruce Besanko noted that sales were below plan, with a “significant decline” in store traffic, reflecting “the worsened macroeconomic environment, competitive pressures and a weakened brand position.”
Circuit City noted that its cash position is down to $92.5 million, from $424.4 million a year earlier.
Comp store sales in the quarter were down a disastrous 13.3%.
Also troubling is this: Back in May, the company announced that it is exploring strategic alternatives. But now it appears it may not have many to choose from. “Given market conditions, it is prudent to focus internally on improving the company’s performance in order to operate as a standalone business,” the company said this morning. Which basically suggests that there will be no rescue for Circuit City; the company is going to have crawl out of its current hole on its own.
Meanwhile, the company gave the usual rundown on various product segments, and the news is not so good:
- Video: High-single digit comp stores decrease; flat-panel TVs up by “a low single digit percentage. Digital imaging products, camcorders and DVD hardware were down double digits.
- IT products: Down double digits. Sales of notebooks and desktop PCs were down double digits.
- Audio: Down double digits. Sales of mobile, portable audio and home audio products were down double digits. Navigation products were down high single digits.
- Entertainment: Down double digits, with low-single-digit decline in video gaming products, and double-digit declines for video and music software.
Circuit City today is down 15 cents, or 10.95%, to $1.22.