Circuit City Stores, Inc. Reports Record Sales
4 June 1998
Circuit City Stores, Inc. Reports Record May and First Quarter Sales For the Circuit City Group and the CarMax Group
RICHMOND, Va., June 4 -- Circuit City Stores, Inc. today
reported May 1998 and first quarter sales for the company, the Circuit City
Group and the CarMax Group .
For the month, total sales for Circuit City Stores, Inc. rose 33 percent
to $826.6 million from $621.5 million in May 1997. For the first quarter
ended May 31, 1998, total sales for Circuit City Stores, Inc. rose 22 percent
to $2.26 billion from $1.86 billion in the first quarter of last year.
The Circuit City Group
For the month, total sales for the Circuit City Group were $699.5 million,
which represents a 25 percent increase from May 1997 sales of $561.4 million
and a 12 percent increase in comparable store sales. For the quarter ended
May 31, 1998, total sales for the Circuit City Group were $1.92 billion, which
represents a 14 percent increase from last year's first quarter sales of $1.68
billion and a 4 percent increase in comparable store sales.
"We were pleased with Circuit City's sales performance, which exceeded our
expectations throughout the quarter," said Richard L. Sharp, Circuit City's
chairman and chief executive officer. "Results for May reflect comparable
store sales increases in all product categories, with especially strong growth
in personal computers, big-screen televisions, DSS, major appliances and
music.
"As a result of the higher-than-anticipated sales, we expect that the
Circuit City business will contribute approximately 24 cents per share to the
Circuit City Group's first quarter earnings, exceeding analyst expectations,
which average approximately 19 cents per share," Sharp said. "We expect
earnings per share for the Circuit City Group to be approximately 13 cents,
which includes the impact of the company's investment in Digital Video
Express, LP and the Group's retained interest in the CarMax Group."
During May, Circuit City opened three new Superstores: one each in the
Grand Junction, Col.; Kokomo, Ind.; and New York metropolitan markets.
"We also continue to make progress with Divx," Sharp said. "The first
Divx players and titles will be available to the consumer on June 8. We
expect to begin our two-market launch with approximately 30 titles and to add
about 50 titles per month thereafter."
The CarMax Group
For the month, total sales for the CarMax Group were $127.1 million, which
represents a 111 percent increase from May 1997 sales of $60.1 million and a 5
percent increase in comparable store sales. For the quarter ended May 31,
1998, total sales for the CarMax Group were $345.3 million, which represents a
94 percent increase from last year's first quarter sales of $177.6 million and
a 1 percent decline in comparable store sales.
"Although we were pleased with the improvement in CarMax's comparable
store sales pace, the results for the month and the quarter remained below
expectations," Sharp said. "For the first quarter, we expect a loss for the
CarMax Group of approximately 3 cents per share, which reflects the
disappointing sales results. In addition, we are more cautious in our outlook
for the remainder of the year and believe that we are unlikely to produce a
profit for the full year. This caution stems from the first quarter results
and continued uncertainty about the impact of the intense promotional activity
in the new-car segment. Given the variability in store performance, we will
focus next year on opening a critical mass of six to seven stores in Los
Angeles and a limited number of additional stores, for a total of
approximately 10 used-car store openings.
"Our comparable stores continue to produce exceptionally high volumes when
compared with industry averages and both the Chicago and Washington, D.C.,
markets are off to a good start," Sharp said. "We have produced outstanding
sales in the new-car segment, with our Norcross location generating the
highest retail sales volumes among Chrysler's prestigious Pacesetters Club
members." In May, CarMax opened its third location in Chicago and reached
critical mass in the Dallas market with the addition of a third store.
Circuit City Stores, Inc. is the nation's largest retailer of brand-name
consumer electronics and major appliances and a leading retailer of personal
computers and music software. With headquarters in Richmond, Va., Circuit
City operates 505 Superstores, four consumer electronics-only stores, 52 mall-
based Circuit City Express stores and 21 CarMax Superstores. For more
information, access the Circuit City web site at http://www.circuitcity.com,
the CarMax web site at http://www.carmax.com and the Divx web site at
http://www.divx.com.
This release contains forward-looking statements, which are subject to
risks and uncertainties, including, but not limited to, risks associated with
the development of new business concepts. Additional discussion of factors
that could cause actual results to differ materially from management's
projections, forecasts, estimates and expectations is contained in the
company's SEC filings.