A Disconnected Circuit City: Fool by Numbers

On June 20, Circuit City Stores (NYSE: CC  ) released first-quarter earnings for the period ended May 31.

• While comps rose in the double digits for notebook computers, it wasn't enough to offset the declines in most of the other product categories. Overall, comparable sales declined 5.6%.
  
  
• Pricing issues in the flat-panel TV category largely contributed to the $0.33-per-share loss.
  
  
• Margins dipped across the board, because of the decline in warranty sales and a sales mix that shifted toward lower-margin PC hardware.
  
  
• Because of expected volatility during its restructuring process, management withdrew its fiscal guidance for 2008.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q1 2008	Q1 2007	Change
Sales	$2,485.5	$2,596.6	(4.3%)
Net Profit	($54.6)	$6.4	N/A
EPS	($0.33)	$0.04	N/A
Diluted Shares	165.8	176.3	(5.9%)

Get back to basics with the income statement.

Margin Checkup

	Q1 2008	Q1 2007	Change*
	22.5%	24.5%	(1.9)
	(3.6%)	0.1%	(3.6)
	(2.2%)	0.3%	(2.5)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q1 2008	Q1 2007	Change
Cash + ST Invest.	$364.1	$634.3	(42.6%)
Accounts Rec.	$342.2	$211.6	61.8%
Inventory	$1,745.9	$1,931.4	(9.6%)

Liabilities	Q1 2008	Q1 2007	Change
Accounts Payable	$923.0	$995.6	(7.3%)
Long-Term Debt	$49	$50	(2.1%)

The balance sheet reflects the company's health.

Cash Flow Highlights
You can't watch TV without a remote, and you can't do your due diligence without a cash flow statement.

Related Foolishness:

• Circuit City Tunes Up Again
• Before the Call: Bears Roam Circuit City
• Circuit City Cuts Costs, Corners

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