After announcing significant layoffs last week, Circuit City Stores Inc. followed this week with disappointing fourth-quarter and fiscal-year results. One area of strength, however, came from the company’s direct sales business, which it is pinning its hopes on to help buoy the brand this year.
Richmond, VA-based Circuit City said net sales increased 1.2 percent for the fourth quarter ended Feb. 28 to $3.93 billion. Same-store sales decreased 0.5 percent during the same period. However, Web-originated sales in Circuit City’s domestic segment grew 25 percent, services revenues 59 percent and call center sales 51 percent over last year.
Net sales for the fiscal year increased 8 percent for a total of $12.43 billion; same-store sales increased 5.8 percent. For fiscal 2007, Web-originated sales grew more than 50 percent to $1 billion.
Circuit City cited changes in the TV and PC categories as the primary cause of its disappointing results.
“We are responding to these market conditions by accelerating our strategy to transform Circuit City into a world-class, multichannel consumer electronics retailer,” said Philip J. Schoonover, chairman and president/CEO of Circuit City, in a statement. He said the company expects sales from Circuit City’s Web site and call centers to grow between 30 and 40 percent in fiscal 2008.
Circuit City also reported a fourth-quarter net loss from continuing operations totaling $15.2 million, or 9 cents per share, compared with net earnings of $148 million, or 84 cents per share, for fourth quarter 2006.
The net loss from continuing operations for the fiscal year totaled $13.7 million, or 8 cents per share, compared with net earnings of $147.4 million, or 82 cents per share, in the prior year.
