Circuit City

(CC) - Get Report

posted a narrowed second-quarter loss on a 10% increase in sales from a year ago and, including a contribution from

CarMax

(KMX) - Get Report

, earned more than analysts were predicting in the period.

Excluding CarMax, the electronics retailer lost $11.2 million, or 5 cents a share, in the quarter ended Aug. 31, vs. a loss of $12.5 million, or 6 cents a share, a year earlier. Sales in the latest quarter rose 10% to $2.22 billion, while same-store sales also rose by 10%.

The latest quarter included remodeling and relocation costs totaling 8 cents a Circuit City Group share, including costs related to the completion of video department remodels and full-store lighting upgrades in about 200 Superstores and the relocation of two Superstores. In last year's second quarter, remodeling and relocation costs totaled 4 cents a Circuit City Group share.

Including its 64% stake in CarMax, Circuit City reported net income of $9.1 million, or 4 cents a share, up from $6.8 million, or 3 cents a share, in the prior year. On that basis, analysts polled by First Call had been predicting the company would break even.

Second-quarter earnings per CarMax Group share were 30 cents this year, compared with 25 cents a year ago.