Gerald now see what you have done by your post!
CC may end up going the way pf CompUSA.

Circuit City stock plunges on grim losses report

By Andria Cheng, MarketWatch
Last update: 4:27 p.m. EST Dec. 21, 2007Print E-mail RSS Disable Live
Quotes
NEW YORK (MarketWatch) -- Circuit City Stores Inc. on Friday saw its
shares take their biggest plunge in five years after the company
posted a wider-than-expected third-quarter loss from lower sales and
price cuts on flat-panel televisions.
In a sign of continuing struggle and market share loss, the No. 2 U.S.
electronics chainalso said it may post an unexpected fourth-quarter
loss. Fourth quarter is usually when many retailers, including
electronics chains, reaped their biggest profit for the year.
Shares tumbled $1.91, or 29%, to $4.75, their biggest decline since
February 2002.
Circuit City's net loss widened to $207.3 million, or $1.26 a share,
from $20.4 million, or 12 cents a share, a year earlier. Sales in the
quarter ended Nov. 30 fell to $2.94 billion from $3.06 billion, the
Richmond, Va.-based company said.
Excluding a valuation allowance charge of 62 cents a share, Circuit
City would have lost 64 cents. On that basis, analysts, on average,
estimated a loss of 31 cents a share on sales of $3 billion, according
to Thomson Financial.
Sales at stores open at least a year declined 5.6% after lower sales
of traditional tube and projection televisions, camcorders and DVD
players. The company's aggressive Black Friday promotions, while
driving sales and traffic on the day after Thanksgiving, could not be
an ongoing strategy, analysts said. Profit also was hurt by price cuts
on flat-panel televisions and weakness in sales of its more profitable
warranty services.
As part of its strategy to improve results, Circuit City said next
year, it's opening as many as 60 The City, its new store concept, to
help bolster demand and improve customer experience. See full story.
'Best Buy is nimble and responsive. You just don't see that in Circuit
City.'
-- Stacy Widlitz, Pali Research

Circuit City has lost traffic and sales to larger rival Best Buy
Co. ) , which this week raised its full-year profit forecast after
reporting a better than expected 52% rise in its third-quarter profit,
analysts said.
"It's pretty shocking they are not going to make money in the fourth
quarter," said Pali Research analyst Stacey Widlitz, who said the
expected loss in the fourth-quarter would be Circuit City's first in
at least five years. "It's a mess. Best Buy is nimble and responsive.
You just don't see that in Circuit City."
Assuming current sales and margin trends continue for the rest of the
year, Circuit City expects a "modest loss" from continuing operations
before income taxes for the fourth quarter. Analysts had been
estimating a profit of 56 cents a share for the quarter, according to
Thomson Financial.
"There's progress being made, but frankly, with an overabundance of
caution on my part," said Chief Financial Officer Bruce Besanko on a
conference call with analysts.
The company said it would slow the rate of change in its business
after its announcement in March to eliminate 3,400 highly paid workers
who investors said were better at pushing higher margin sales and
services.
"We are very dissatisfied with our third-quarter results," said Chief
Executive Philip Schoonover in a statement. The company's problems
"are primarily self-induced and are within our control to improve."
While Best Buy opened up more registers when store managers noticed a
big line, Circuit City would have just one register open even if there
was a line of customers waiting, Widlitz noted from her store tours.
Circuit City was also late compared to Best Buy to have a standard
procedure to train its employees on how to sell higher-margin warranty
services, she said.
Gross margins, or the percentage of sales left after subtracting the
cost of goods sold, narrowed to 19.1% from 22.1%, also missing
analysts' estimates.
U.S. extended warranty sales fell to 2.4% of U.S. segment sales from
3.6% a year earlier.
Comparable-store sales, a retail industry performance measure that
excludes results from new and closed locations, dropped 5.8% in the
U.S., after declines also in desktop computers. They fell 1.1%
excluding the impact of currency translations in the international
markets.
Circuit City said in a regulatory filing Wednesday that its board
approved a special cash retention award program for its top executives
including Chief Financial Officer Bruce Besanko and a long-term
incentive plan for CEO Schoonover and other top executives.
"It seems like the top executives are paid more for poor performance,"
Merrill Lynch analyst Danielle Fox posed the question for management
on the call. She asked what kind of incentive plans the company had
for its rank and file employees instead.