Tuesday, December 19, 2006
CC - Short Circuit City
It's pretty darned amazing that a company can ring up over $3 bln in sales and still lose over $16 mln, but that's what happened to Circuit City in its 3rd quarter. Even with a same store sales gain of more than 5 percent, Circuit still couldn't make money. Stock down about 20% today at about $19 and hard to believe it traded above $30 earlier in the year. Competition in the flat panel tv realm has been cutthroat, but there's also an element of a slower consumer creeping into the picture as well and let's face it: This is a retailer which hasn't figured out how to outsmart its competition except through cutting prices and losing money - it's on its way to cementing its fate an also-ran. At least Best Buy was able to turn a profit even though it came up short as well. Another thing is clear: As usual, the Wall Street analyst crowd wasn't paying attention since the consensus forecast was for a Circuit City profit of 5c a share. Maybe CC should diversify into the sale of oven mitts?