NEW YORK – Circuit City Stores Inc. (CC) Tuesday reported a 2.9 percent gain in quarterly same-store sales but its growth lagged estimates due to a calendar shift and reduced spending through August.
Even though price cuts and the popularity of flat-panel TVs, notebook computers and digital cameras still drew store traffic, Circuit City said purchases had softened in August, a month which also hurt discounters like Wal-Mart Stores Inc. (WMT) as consumers grappled with soaring gasoline prices.
In addition, Circuit City, based in Richmond, Va., said a shift in its fiscal calendar hurt sales because it could not benefit from the Labor Day weekend, sales from which would now be accounted for in September, compared to August in 2003.
Circuit City said it estimates the Labor Day weekend shift reduced second-quarter same-store sales by slightly more than one percentage point.
Chief Executive Officer Alan McCollough said in a statement the latest same-store sales results, nevertheless reflected improvements in store-level execution.
According to Thomson First Call, analysts' had expected on average a 3.5 percent same-store sales growth at Circuit City, which last year reported a 5 percent same-store sales decline.
Total second-quarter sales at Circuit City rose 8.9 percent to $2.35 billion, a company statement said.
Circuit City, with 609 stores in the United States, has posted inconsistent sales growth for the past three years as it tries to regain market share lost mainly to Best Buy (BBY), the top U.S. electronics retailer.
Poor real estate is one of several reasons that have often been cited by analysts as a cause of Circuit City's troubles.
Last week, Minneapolis-based Best Buy reported a 4.3 percent increase in its second-quarter same-store sales, an increase which -- even though it also missed forecasts -- analysts hailed as a sign of continued market-share gains.