fourth-quarter earnings fell about 4.7% from a year ago, weighed down by a charge for store shutdowns and a 1.8% decline in same-store sales.
The electronics retailer earned $85.4 million, or 45 cents a share, in the quarter, compared with earnings of $89.6 million, or 43 cents a share, last year. Sales rose 5.3% from a year ago to $3.47 billion. Earnings from continuing operations were 43 cents a share in the latest quarter compared with 46 cents a share last year.
Analysts surveyed by Thomson First Call were forecasting revenue of $3.45 billion.
The latest quarter included special items that complicated its comparability to Wall Street earnings estimates. Circuit City said the latest quarter saw a $30 million charge for lease terminations, asset write-offs and severance for store closures; a gain of $4.4 million related to restricted stock grants; a $4.2 million expense related to lease-accounting revisions; and a gain of $1.8 million from the sale of an office building.
Circuit City's gross profit margin was 24.4% in the fourth quarter of 2005 compared with 23.8% a year ago, rising primarily because of overseas results and warranty sales. The domestic gross profit margin narrowed by 29 basis points because of discounting for DVD players, big televisions and home theater, plus year-end clearances.
"We saw traffic trends improve as the fourth quarter progressed as a result of our advertised item and promotional effectiveness initiatives," the company said. "We will continue to focus on increasing the level of associate engagement, improving the customer experience, and increasing the customer-perceived level of inventory in-stock."
For 2006, the company expects year-over-year sales growth of 3% to 6%, with domestic same-store sales growth in the low single-digit range and operating margin of 1.3% to 2.3%.