Retail
Circuit City Results & Comments Show Incompetence (CC, BBY)
Published:
Last Updated:
Circuit City (NYSE: CC) has just posted its earnings, or at least its results. The company posted a loss of $140 million from operations.
Quarterly net sales decreased 3.1 percent to $2.96 billion from $3.06 billion in the same period last year, with consolidated comparable store sales decreasing 5.6 percent. Excluding the charges, the company lost $0.64 on an EPS basis. First Call had estimates at -$0.31 EPS on revenues of $3 Billion.
We named Philip Schoonover as a CEO that needs to go, and the board should revolt after you read further down here on the outlook. Cherkasky is out at Marsh-Mac, and Circuit City needs to follow the same path.
It did announce a new $1.3 Billion credit facility, but it also recorded a non-cash tax expense of $102.8 million to establish a full valuation allowance against its deferred tax assets in the domestic segment.
Philip J. Schoonover, chairman, president and chief executive officer, said: "We are very dissatisfied with our third quarter results. We underestimated the financial impact from the disruption of our transformation work…..………. "We believe that these issues are primarily self-induced……" What a dope.
But the outlook is for a loss, as well even though First Call had been looking for the retailer to post a gain in the Christmas quarter: "Assuming that current sales and margin trends continue for the balance of the fourth quarter of the fiscal year, the company expects to deliver a modest loss from continuing operations before income taxes for the quarter." That is unacceptable for a retailer, even if you have a bozo CEO. Best Buy (NYSE: BBY) is obviously kicking these guys in the teeth, and if you have been to a both stores back to back you’ll know why.
Shares are down about 15% at $5.65 pre-market and the 52-week trading range is $5.35 to $22.02. With a $6.66 closing price yesterday you have to wonder if it was an Omen? It’s a cold winter in the board room this morning.
Jon C. Ogg
December 21, 2007
Join our free email distribution list to hear about other special situations, IPO previews, reorganizations, break-ups and more.
The thought of burdening your family with a financial disaster is most Americans’ nightmare. However, recent studies show that over 100 million Americans still don’t have proper life insurance in the event they pass away.
Life insurance can bring peace of mind – ensuring your loved ones are safeguarded against unforeseen expenses and debts. With premiums often lower than expected and a variety of plans tailored to different life stages and health conditions, securing a policy is more accessible than ever.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. Life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to learn how to get a quote in just a few minutes.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.