U.S. Retailer Circuit City Announces Record Sales

Following results from GameStop for the U.S. holiday season, officials from North American retail chain Circuit City have announced record sales for December 2005, with stronger game sales compared to last year particularly cited. Total sales increased 12.1 percent to $1.98 billion, with comparable store sales increasing by 10.8 percent. Sales in the company’s entertainment category during December actually decreased by what is described as a single digit percentage, due to a fall in music sales and DVDs. These decreases were partially offset by a 'double-digit increases' in video games hardware across 'multiple hardware platforms' – with no specific format being mentioned by name, but the Xbox 360 shortage meaning that next-gen sales may not have accounted for all of the increase. "Our record December sales results are further evidence of the great work being done by Associates throughout our company," said chairman and CEO W. Alan McCollough. "They executed an effective holiday season plan, which we believe translated into a superior customer experience in all of our sales channels. More effective advertising, improved inventory in-stock levels and a tightly integrated multi-channel offering helped drive the year-over-year improvement. A strong increase in the average ticket size more than offset a reduction in traffic, compared with the prior year.” “In December we saw strength in a broad number of categories, but we saw significant strength in flat panel televisions, MP3 players and accessories, notebook computers, video game hardware, navigation products and imaging products," added McCollough. As a result of the strong sales the company, has raised its range of expectations for sales growth in the 2006 financial year to 10 to 12 percent, from a previous estimate of 8 to 10 percent. The remainder of the company’s outlook for 2006 remained unchanged, including an operating margin of 1.6 to 2.0 percent.