Alan McCollough Quotations

We remain dissatisfied in the overall sales performance of our Circuit City business, ... no new trends on which to base any charges in earnings expectations." ()

Near term, we have seen a softening in our business, coincident with the onset of the war with Iraq. We believe the softening reflects consumer preoccupation with geopolitical events. It is too early, however, to understand the impact these events may have on results for the first quarter." ()

I believe we have made an exciting announcement for the future of our company. It will strategically reposition our company to focus exclusively on consumer, home office and entertainment. I am convinced the time to move forward is now." ()

Our record December sales results are further evidence of the great work being done by Associates throughout our company. More effective advertising, improved inventory in-stock levels and a tightly integrated multi-channel offering helped drive the year-over-year improvement. A strong increase in the average ticket size more than offset a reduction in traffic, compared with the prior year." ()

We believe the December sales performance reflects not only our continued need to update the store base, but also a need to increase the average ticket and to drive more traffic, exposing a broader base of consumers to the new Circuit City,

We view the additional advertising expense during the quarter as an important investment in building the Circuit City brand. Since our retail stores team held labor expense relatively flat on a dollar basis, we were able to gain significant leverage on our higher level of sales as we continued work to optimize the labor model in our stores." ()

We believe our guaranteed express pickup offering, which enabled customers to shop for Christmas gifts over the Web through Christmas Eve, was a competitive advantage during the month." ()

With Circuit City's E-superstore, customers will find convenient and money-saving options not available from Web-only retailers, ... We believe the tight integration of the Circuit City Web site and our superstores gives the customer the best of both worlds." ()

We were obviously dissatisfied with the overall comparable-store sales decline,

Continued strength of the consumer electronics and home office categories and the recent substantial weakness in major appliances accelerated our decision to reformat all existing superstores. The major appliance business carries high fixed costs and tends to be more cyclical than other retail categories." ()

During the second quarter, we moved forward on a number of fronts. We're pleased with returning to second-quarter profitability for the first time in five years." ()

Sales were particularly strong in those categories that were expanded following last year's exit from the appliance business and which seasonally peak in December, ... These categories include video game hardware, software and accessories; digital cameras; personal computer software and accessories; and DVD software." ()

Our thoughts and prayers go out to the people who were affected by Hurricane Katrina. Our donation is part of Circuit City's broader effort to help the victims recover." ()

Although we had anticipated modest sales disruption related to our exit from the appliance business and the partial remodel of all stores, since the end of September, sales have softened significantly in virtually all product categories, including those not affected by the remodeling process," ()

In December we saw strength in a broad number of categories, but we saw significant strength in flat panel televisions, MP3 players and accessories, notebook computers, video game hardware, navigation products and imaging products." ()

The industry trends and our own initiatives resulted in strong sales of new technologies such as digital and thin-panel televisions, portable DVD players, digital satellite systems and portable digital audio,

Although December sales started relatively strong and picked up at the end of the month, we were not able to offset mid-month weakness, ... For the full month, traffic was up slightly, but not at the level of improvement we experienced in November.

The first-quarter comparable stores sales growth was slightly ahead of our expectations, with sales exceeding our outlook early in the quarter, but softening during the final month." ()