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Weak Comps at Circuit City

Poor computer, DVD and video-game sales are to blame.
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Circuit City's


December same-store sales took an unexpected dive due to anemic sales of computers, DVD players and video-game equipment.

The electronics retailer said December comps were off 5.8% from a year ago, while overall sales rose 1.8% to $1.75 billion. Analysts had been expecting roughly flat same-store sales for the month.

"December sales were below our expectations," Circuit City said, citing lower customer traffic. "We recognize that we must find more effective ways to drive store traffic so more consumers can see the improvements we have made in the Circuit City shopping experience."

Circuit City said weakness in computer sales was exacerbated by aggressive discounting among competitors, while DVD sales were soft because of the machines' general ubiquity in American households. Weak video-game hardware and software sales contributed 210 basis points to the overall same-store sales decline, and reflected industrywide hardware shortages.

The company also cited lower wireless sales that reflected a "business model change."

The stock fell 18 cents, or 1.2%, to $14.78 in premarket trading.