Circuit City Withdraws Earnings Forecast Citing Weak TV Sales
Electronics and entertainment retailer Circuit City Stores said late Monday it will report a loss in its first quarter and is withdrawing its outlook for the first half of the fiscal year.
Circuit City said it now expects a loss from continuing operations before income taxes of $80 million to $90 million for the first quarter of 2008 because of "substantially" lower sales in April of large flat panel and projection television.
Circuit City said it was withdrawing its outlook because of "uncertainties in the current operating environment."
"Although the first half of the fiscal year will be volatile due to the change in the television business, we believe that our transformation efforts will yield positive results for the full fiscal year," said Philip J. Schoonover, the company's chairman, president and chief executive.
The company had said its revenue would grow 5% to 8% -- with comparable-store sales rising 3% to 5%. The company had also anticipated a pretax loss of $40 million to $50 million in the first half of fiscal 2008, largely because of continued restructuring costs.
Circuit City also restated results from the third and fourth quarter of the 2007 fiscal year because of accounting changes.
For the company's third quarter, which ended Nov. 30, the retailer said its net loss is now $20.4 million, or 12 cents a share. The company had reported a third-quarter loss of $16 million, or 9 cents a share.
For the fourth quarter, which ended Feb. 28, Circuit City said its net loss is now $4.3 million, or 3 cents a share. Previously, the company had said it had a loss of $12.2 million, or 7 cents a share.
Circuit City said those changes were necessary because of the timing of revenue being recorded from sales on its Web site.
Because of an increase in vendor allowances, the company also restated its full year 2007 report. The retailer said it had a loss of $8.3 million, or 5 cents a share, in fiscal 2007. Circuit City had said it lost $11.8 million, or 7 cents a share for the fiscal year.
Circuit City shares fell $1.55, or 9.1%, to $15.90 in after-hours trading. During regular trading hours, the shares had fallen 48 cents to close at $17.45 on the New York Stock Exchange. In the last 52 weeks, the stock has ranged from $17.02 to $31.54.