On Dec. 19, electronics retailer CircuitCity
- Sales grew 6.9% to $3.1 billion, and same-store sales grew 5.1%.
- Circuit City posted an unexpected bottom-line loss as gross margin fell on account of cutthroat price competition for flat-panel TVs, PCs, and entertainment software. SG&A also increased from higher information-technology investments.
- For 2007, management is projecting further sales growth, but continued gross margin pressure, as competition keeps prices low in key product areas.
(Figures in thousands, except per-share data)
Income Statement Highlights
|
Q3 2006 |
Q3 2005 |
Change |
|
|---|---|---|---|
|
Sales |
$3,102,299 |
$2,901,385 |
6.9% |
|
Net Profit |
($15,990) |
$10,142 |
N/A |
|
EPS |
($0.09) |
$0.06 |
N/A |
|
Diluted Shares |
171,063 |
177,509 |
(3.6%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q3 2006 |
Q3 2005 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
22.2% |
24.1% |
(1.9) |
|
Operating Margin |
(1%) |
0.5% |
(1.5) |
|
Net Margin |
(0.5%) |
0.4% |
(0.9) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$897,887 |
$550,276 |
63.2% |
|
Accounts Rec. |
$420,876 |
$298,182 |
41.1% |
|
Inventory |
$2,531,486 |
$2,676,695 |
(5.4%) |
|
Liabilities |
Q3 2006 |
Q3 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$2,283,227 |
$1,962,030 |
16.4% |
|
Long-Term Debt |
$47,479 |
$38,410 |
23.6% |
Learn the ways of the balance sheet.
Cash Flow Highlights
Fools will have to wait until Circuit City files its 10-Q for juicy cash flow details.
Find out why Fools always follow the money.
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Related Foolishness:
- Foolish Fundamentals: Margins
- Foolish Fundamentals: Free Cash Flow
- Foolish Fundamentals: Return on Invested Capital
- Foolish Fundamentals: The Cash Flow Statement
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. The Fool has an ironclad disclosure policy. Feel free to email him with feedback or to discuss any companies mentioned further.
