Circuit City Stores Inc. (Richmond, Va.) has reported a 6.3 percent increase in net sales and operative revenues for its fiscal year ended Feb. 28, 2005.
Same-store sales gained 0.7 percent in the period.
In the fourth quarter, sales and revenues were up 5.3 percent but sale-store sales fell 1.8 percent.
“We believe that the improving trend in sales since December reflects early improvements in our promotional and advertising effectiveness that translated into increased consumer traffic as the quarter progressed,” said chairman and ceo W. Alan McCollough. “We continue to take steps to move our business forward and are beginning to see initial results from the recent changes we have implemented.”
The company said a decrease in wireless sales, principally driven by a business model change in the third quarter, accounted for approximately 100 basis points of the company’s overall comparable store sales decrease in the fourth quarter. A decrease in digital video service sales, principally driven by a business model change in the second quarter, accounted for approximately 80 basis points of the company’s overall comparable store sales decrease in the fourth quarter.
The company has updated its calculation of comparable store sales to more accurately reflect business trends, including the growing importance of service-related revenues. During the fourth quarter, the company expanded the revenues included in comparable store sales to include extended warranties, installations and other non-merchandise revenues. Previously, revenues included in the comparable store sales calculation were limited to merchandise sales.
Same-store sales for the fourth quarter in the video category were relatively unchanged. Triple-digit comparable store sales growth in flat panel displays, double-digit comparable store sales growth in other digital televisions and single-digit comparable store sales growth in digital imaging and camcorders were offset by double-digit comparable store sales declines in tube televisions, DVD players and digital video services.