Circuit City, based in Richmond, Va., said same-store sales rose 6.4 percent, while total sales increased 7 percent to $2.07 billion in its first quarter ended May 31.
While the latest same-store sales gain surpassed analysts' expectations of a rise of 1 percent to 4 percent, the company acknowledged results were measured against an especially weak quarter a year ago, when sales slid 10 percent.
Shares of Circuit City, the No. 2 U.S. electronics chain, rose 20 cents, or 1.6 percent, to $12.45 in New York Stock Exchange (search) trade.
Alan McCollough, the chief executive officer, said in a statement that the sales growth reflected ongoing improvements in store operations and increased selling via the Internet.
Alan Rifkin, an analyst at Lehman Brothers, said same-store sales may have been boosted by increased customer traffic through U.S. Memorial Day holiday weekend. But he added that Best Buy still dominated.
"We continue to believe that Best Buy continues to gain share at the expense of Circuit City," he said in a research note.
Circuit City, with more than 600 outlets, is in the midst of relocating unprofitable stores from sub-prime locales to high-traffic areas to stem more than three years of bleeding in market share, mainly to Best Buy.
Best Buy Thursday reported an 8.3 percent jump in quarterly same-store sales on booming sales of CDs, DVD movies, digital cameras and flat-panel televisions. The growth was within its internal estimate of an increase between 7 percent to 9 percent.