Richmond, Va. Circuit City Stores Inc. said Thursday its loss widened in the first quarter because of a more than 11% drop in sales at established stores.
The company reported a loss of $164.8 million in the three months ended May 31, compared with a loss of $54.6 million a year ago. The company said revenue fell 7% to $2.30 billion from $2.49 billion. Same-store sales dropped 11.3%.
Despite these losses, "We continued to see improvement in many of our operating performance measures," CEO Philip J. Schoonover said in a news release. "We are rebuilding our selling culture and focusing on creating a good first and last impression with the customer."
Schoonover also said that while a review of strategic alternatives to boost shareholder value continues, the board has not yet determined any course of action, according to the Associated Press.
The course of action revolves around the future ownership of the company. Circuit City had opened its books last month to Blockbuster Inc. This move of good faith allowed the video-rental chain to conduct due diligence in its takeover bid of just over $1 billion. The video-rental company has plans to create a huge chain that would sell electronic gadgets and rent movies and games.
In the meantime, Schoonover said Circuit City on Thursday filed a shelf registration statement with the Securities and Exchange Commission for possible issues of stock or debt securities in order to give Circuit City "greater flexibility to respond to strategic opportunities as they arise."
Despite suspending its dividend, the company said it believes it has adequate liquidity to fund the execution of its turnaround efforts, which remains a primary focus.
"The outcome of those efforts will position Circuit City well for the future and help us to capitalize on the anticipated improvement in the macroeconomic climate during the second half of the fiscal year," Schoonover said.
Circuit City said it expects a "gradual recovery" in the second half of fiscal 2009, and reaffirmed its outlook for the year of a mid-single digit decline in domestic same-store sales, according to the Associated Press.