Circuit City Stores Inc., the No. 2 U.S. electronics chain, today (June 4) reported quarterly sales at stores open at least a year rose 6.4% as price cuts offset stiff competition from archrival Best
Circuit City Stores Inc., the No. 2 U.S. electronics chain, today (June 4) reported quarterly sales at stores open at least a year rose 6.4% as price cuts offset stiff competition from archrival Best Buy.
Circuit City, based in Richmond, Va., said total sales rose 7.0% to $2.07 billion in the first quarter ended May 31.
While the latest same-store sales gain surpassed some analysts' expectations of a rise of 1% to 4%, the company acknowledged the results measured against an especially weak quarter a year ago, when sales slid 10%.
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 largely by increased customer traffic through U.S. Memorial Day holiday weekend. But he added that Best Buy, the top U.S. consumer electronics chain, 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.
In contrast, Best Buy yesterday reported an 8.3% 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% to 9%.