Circuit City Sales Better Than Expected, Trail Best Buy's
{{#rendered}} {{/rendered}}
Circuit City Stores Inc. (CC) on Friday reported a better-than-expected gain in quarterly sales but still trailed No. 1 electronics chain Best Buy Co. Inc. (BBY).
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.
{{#rendered}} {{/rendered}}
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.
{{#rendered}} {{/rendered}}
"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.