Circuit City shares slip as weak sales expected
Mon Jan 3, 2005 01:40 PM ET
NEW YORK, Jan 3 (Reuters) - Shares in Circuit City Stores Inc. (CC.N: Quote, Profile, Research) on Monday fell more than 3 percent amid expectations the No. 2 U.S. electronics retail chain would report weak December sales.
Circuit City, which reports December sales on Wednesday, saw its shares drop 50 cents to $15.14 in afternoon trading on the New York Stock Exchange. They were down from a year high of $17.87 on Nov. 15.
Analysts said the market was negative about the sales trend at Circuit City, which has been losing market share to its bigger rival Best Buy Co. Inc. (BBY.N: Quote, Profile, Research) for several years.
Joseph Feldman, an analyst at SG Cowen, said although prices at the two retailers were similar, Circuit City needed to relocate about one third of its stores to boost its sales.
"Really the best case scenario is that they would have flat comparable sales in December even against easy comparisons a year ago," said Feldman.
On Dec. 6, Circuit City said sales at stores open at least a year -- a key retail gauge known as same-store sales -- fell 4.3 percent in the third quarter. It has expressed caution for the fourth quarter which includes the holiday shopping season.
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