Investors applauded Circuit City (NYSE: CC) today as it revealed its sales numbers for the first quarter. The electronics retailer said its first-quarter same-store sales increased by 6.4%, a decent upswing that nevertheless is overshadowed by its rival, Best Buy (NYSE: BBY).
Circuit City also said that its total sales in the first quarter increased 7% to $2.07 billion, which included $21.5 million in sales from its recent acquisition of Canada's InterTAN. (The company said it will break out domestic and international sales numbers starting in the second quarter.)
Though surely it was nice to hear of an improving outlook, Circuit City, to its credit, was the first to admit that its improved same-store sales figures looked better, since the first quarter of last year was a soft one. Strong sales in this quarter came from digital, plasma, and LCD TVs, DVD players, and digital imaging products.
However, it's still hard to find the charm in Circuit City when you consider Motley Fool Stock Advisor pick Best Buy. Best Buy said yesterday that its same-store sales were up 8.3%, with overall sales rocketing 17% to $5.47 billion. It said its solid sales came from digital TVs and digital cameras, DVD movies, notebooks, and MP3 players.
Shares of both companies increased in today's trading session, with Circuit City adding on nearly 3%. Circuit City has many fans awaiting a turnaround, and some who glance at the shares at $12.58 per share may think they sound "cheap" for such a classic retailer that many of us may remember from younger days. In reality, the shares are trading at 45 times the forward earnings estimate.
Meanwhile, take into consideration a whole slew of formidable rival forces, not just Best Buy, and it sounds like a pretty risky investment indeed, despite some folks' enthusiasm for the underdog. In other words, it still doesn't seem like time to move into this City.
Are you wrangling with all that electronic stuff you've purchased at Circuit City, Best Buy, or some other retailer? Plug into the Help With This Home Theater board to chat about common problems, only on Fool.com.
Alyce Lomax does not own shares of any of the companies mentioned. She bought her very first stereo components at Circuit City more than 15 years ago, but hasn't set foot in one in recent memory. In fact, she just recently purchased her brand-new TiVo (Nasdaq: TIVO) at Best Buy.
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