Shares of Circuit City Inc. (NYSE: CC) slumped in Tuesday trading after the retailer predicted a loss for the first quarter of 2008, and withdrew its previously issued outlook for the full year.
The consumer electronics retailer said Monday afternoon that it now expects a loss from continuing operations of $80 million to $90 million for the first quarter of fiscal 2008.
We are moving with increased urgency to accelerate our transformation initiatives, said Philip J. Schoonover, chairman, president and chief executive officer. Although the first half of the fiscal year will be volatile due to the change in the television business, we believe that our transformation efforts will yield positive results for the full fiscal year.â€
Circuit City said that assuming business trends improve and restructuring efforts are effective, it is predicting pre-tax earnings from continuing operations of net sales at the low end of its prior forecast range of 1.4 percent to 1.8 percent for the full-year 2008 period.
Citigroup analyst Bill Sims told clients in a note today that the companyâ€™s full year guidance was â€œoverly optimistic.â€
Without an earnings update until June and with our view that full-year guidance is based on an overly optimistic view on the timing of a rebound in business trends, we cannot recommend buying the shares, Citigroup's Bill Sims told clients
Shares tumbled 93 cents, or 5.33 percent to close at $16.52 the New York Stock Exchange.