Circuit City Stores, Inc. Hosts Analyst Conference
RICHMOND, Va., May 24, 2005 -- Circuit City Stores, Inc. announced that it is hosting an analyst conference today, featuring presentations from several of the company's senior executives. A summary of key points from the presentations follows.
The company's strategy for improving its operations, financial performance and shareholder value includes
* upgrading its processes, systems and talent to improve the core
business,
* evolving the core business to generate incremental revenues and profits
and
* innovating to create new businesses, related to our core business, to
produce long-term growth.
Key initiatives to upgrade the core business support our fiscal 2006 financial outlook and include the following:
* Store revitalization program
* Promotional effectiveness
* Product transition management
* Best sourcing
* Inventory management, including improved in-stock levels and reduced
net-owned inventory
* Collaborative vendor relationships
Key initiatives to evolve the core business include the following:
* Portfolio management of merchandise product categories, matching our
investments in merchandise product categories with the strategic intent
of the specific business
* Expanded service offerings, including the company's plan to expand its
technology services offering nationwide, beginning in the second quarter
* Continued investment in Circuit City brand awareness and in Circuit City
Direct marketing, ensuring a consistent multi-channel brand
* Improved customer experience led by associate engagement
* Reduction of performance gap between the best and the poorest performing
stores
Key initiatives to innovate include the following:
* Win in Home Entertainment -- be the retail destination for home
entertainment products and services
* Digital Home Services -- develop breakthrough consumer electronics
service offerings
* Multi-Channel -- move focus from transactions to relationships and
provide solutions to customers wherever they want them
The company reiterated the following guidance for fiscal 2006:
* total sales growth of 3 percent to 6 percent, including domestic
comparable store sales growth in the low single-digit range
* operating margin (earnings from continuing operations before income
taxes as a percent of sales) of 1.3 percent to 2.3 percent
* capital expenditures, net of landlord reimbursements and sale leaseback
transactions, of approximately $205 million
This outlook is based on the following assumptions:
* the inclusion of the international segment for a full year and growth in
that segment
* 30 to 40 new and relocated store openings
* continued growth in our Circuit City Direct business
* more effective advertising and promotions
* an improved customer experience
* enhanced customer perceived in-stock levels and
* leverage in store expenses to be more than offset by investments in
information systems and innovation and the inclusion of the
international segment for the full year
A live Web cast of the presentations will be available on the company's investor information home page at http://investor.circuitcity.com/. Presentations are expected to begin today at 8:30 a.m. EDT. The Web cast will be archived and available for replay at the same location.
About Circuit City Stores, Inc.
Circuit City Stores, Inc. is a leading specialty retailer of consumer electronics throughout the United States and Canada. The company's domestic segment operates through 612 Superstores and five mall-based stores in the United States. The company's international segment operates through nearly 1,000 retail stores, dealers and other outlets in Canada. The company also operates a Web site at http://www.circuitcity.com/.
Forward-Looking Statements
Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which are subject to risks and uncertainties, including without limitation: (1) the company's ability to continue to generate strong sales growth through its Web site, (2) the availability of real estate that meets the company's criteria for new and relocating stores, (3) the cost and timeliness of new store openings and relocations, (4) consumer reaction to new store locations and changes in the company's store design and merchandise, (5) the extent to which customers respond to promotional financing offers and the types of promotional terms the company offers, (6) effectiveness of the company's advertising and marketing programs for increasing consumer traffic and sales, (7) the ultimate outcome of the InterTAN litigation with RadioShack, any associated costs, any change in competitive conditions, or any business disruption resulting from rebranding of InterTAN's RadioShack-branded stores and dealer outlets in Canada, and (8) the accuracy of the assumptions underlying the company's projected 2006 results as discussed in connection with the fiscal 2006 outlook in this release. Discussion of additional factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is set forth under Management's Discussion and Analysis of Results of Operations and Financial Condition in the Circuit City Stores, Inc. Annual Report on Form 10-K for the fiscal year ended February 28, 2005, and in the company's other SEC filings. A copy of the annual report is available on the company's Web site at http://www.circuitcity.com/.
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