Is it time to move into Circuit City (NYSE:CC)? The electronics retailer provided a narrower-than-expected drop in sales last week, but questions remain as it continues to deliver some mixed messages.

On Friday, Circuit City said that its same-store sales for the fourth quarter decreased by 1.8%, a much better result than the 5.7% decrease that analysts were anticipating. Total sales increased 5.3% to $3.47 billion.

The company said that a decrease in wireless sales accounted for 100 basis points of the same-store sales decrease. Meanwhile, digital video accounted for 80 basis points of the drop. Both decreases were due to a business model change, the company said. That's noteworthy, considering how wireless-sales growth has been a strong factor in rival RadioShack's (NYSE:RSH) sales and earnings growth over recent history.

On the other hand, Circuit City highlighted its success in audio products, with portable music players and satellite radio sales delivering double-digit sales growth. It also celebrated triple-digit growth in flat-panel displays, double-digit growth in other digital televisions, and single-digit growth in digital imaging and camcorders.

It's all a bit of a jumble, and most of us know that Circuit City has been struggling in recent months. An unsolicited buyout offer recently came to pass (our own Seth Jayson made comment), and Circuit City discontinued its relationship with online mall Amazon.com (NASDAQ:AMZN). Meanwhile, even with electronics hot-ticket items this past holiday season, Santa seemed to skip Circuit City.

On the other hand, the outlook's been a bit cloudy for electronics retailers in general recently. Best Buy (NYSE:BBY), which, like Circuit City, also pre-announces sales on a regular basis, said last week that earnings may be lower than previously expected.

Electronics retailing is a tough industry, of course, in the competitive sense. Although consumers snap up the gadgets, there's tons of competition -- not just among Circuit City, Best Buy (NYSE:BBY), and RadioShack, but also emanating from Amazon.com, Wal-Mart (NYSE:WMT), and Target (NYSE:TGT).

It wouldn't be surprising if investors saw the better-than-expected sales as a reason to take a second look at Circuit City, and that's a perfectly legitimate response. However, it may very well be easier to argue for taking a position in a traditionally strong performer like Best Buy and ignore short-term machinations. After all, given recent history and continued same-store sales declines, Circuit City still seems to face obstacles in its pursuit of a rosier outlook.

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Alyce Lomax does not own shares of any of the companies mentioned.