Circuit City Stores Inc. warned that April sales were "substantially below plan" and pulled its financial guidance for the first-half of the year. Shares fell 8% in late trading.
The consumer electronics retailer, which is in the midst of restructuring and faces intense competition in the television market, cited weak sales of large flat-panel and projection-televisions. The company previously anticipated a pretax loss of $40 million to $50 million in the first half of the year.
Circuit City shares closed the regular trading session on the New York Stock Exchange down 2.7% at $17.45. In after-hours trading, the stock was recently at $16, down 8.3%.
I looked for similar announcements from Best Buy and couldn't find any. Therefore, this may be company specific information.
However, it may also be a sign of a broader consumer slowdown. Yesterday the BEA announced that consumer purchases dropped .2% in March after adjusting for inflation. This may be a single data point in time which will rebound in the future.
However, it may not. Therefore, it's important to watch retailers' announcements for clues about future consumer behavior.
3 comments:
Last month CC fired all of their higher cost experienced sales people. What a surprise that sales are substantially below plan.
If you are dumber than CC management you are probably dead.
Circuit City sucks. It's a company that deserves to market processed. We have a local CC and BB near one another, and we comparison shop for most electronics. BB usually wins on having the item in stock, often wins on price, and almost always wins on customer service.
I enjoy online shopping while I shop at Circuit-City store through Couponalbum.com which provides thousands of free gifts, deals & huge discount...!
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