Circuit City reported results for the fourth quarter and fiscal year ended February 28, 2005.
“Our sales and earnings performance showed improvement over the prior year as the company returned to profitability for the fiscal year,” said W. Alan McCollough, chairman and chief executive officer of Circuit City Stores, Inc. “We are pleased that our efforts to first stabilize and then grow gross profit margin generated improvements during the year while we continued to rationalize our cost and expense structure, including closing 19 stores during the fourth quarter. We are making progress in improving operations, but we also recognize that more work remains to improve our relevancy with the customer and unlock shareholder value.”
Sales. Total sales for the fourth quarter ended February 28, 2005, increased 5.3 percent to $3.47 billion from $3.30 billion for the fourth quarter ended February 29, 2004, with comparable store sales decreasing 1.8 percent. Total sales for this year’s fourth quarter include domestic segment sales of $3.30 billion and international segment sales of $173.5 million.
Total sales for the fiscal year ended February 28, 2005, increased 6.2 percent to $10.47 billion from $9.86 billion in the fiscal year ended February 29, 2004, with comparable store sales increasing 0.7 percent. Total sales for this fiscal year include domestic segment sales of $10.02 billion and international segment sales of $454.9 million.
The international segment consists of the operations of InterTAN, Inc., which Circuit City acquired in May 2004. Comparable store sales for all periods of the 2005 fiscal year and total sales for the same periods of the 2004 fiscal year reflect domestic sales only.
Net Earnings (Loss) from Continuing Operations. The fiscal 2005 fourth quarter net earnings from continuing operations totaled $82.5 million, or 43 cents per share, compared with net earnings from continuing operations of $94.7 million, or 46 cents per share, for the fourth quarter of fiscal 2004. The international segment’s results increased the fiscal 2005 fourth quarter net earnings from continuing operations by $10.5 million, or 5 cents per share.
Net earnings from continuing operations for the fiscal year ended February 28, 2005, totaled $59.9 million, or 31 cents per share, compared with a net loss from continuing operations of $787,000, or 0 cents per share, for the fiscal year ended February 29, 2004. The international segment’s results increased net earnings from continuing operations for fiscal year 2005 by $19.7 million, or 10 cents per share.
Net earnings from continuing operations for the fiscal 2005 fourth quarter include the following items: after-tax costs of $30.0 million related primarily to lease terminations, asset write-offs and severance for 19 stores, five regional offices and one distribution center closed during February 2005; an after-tax expense reduction of $4.4 million related to the reversal of costs recorded in prior periods for certain performance-based restricted stock grants; an after-tax expense of $4.2 million for the cumulative impact of a multi-year lease accounting revision; and an after-tax gain of $1.8 million related to the sale of one of the company’s corporate office buildings.
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