UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 8, 2005
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CIRCUIT CITY STORES, INC.
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(Exact name of registrant as specified in its charter)
Virginia
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(State or other jurisdiction of
incorporation or organization)
001-05767 54-0493875
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(Commission (I.R.S. Employer
File No.) Identification No.)
9950 Mayland Drive, Richmond, Virginia 23233
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(Address of principal executive offices) (Zip Code)
(804) 527-4000
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 7 - REGULATION FD
Item 7.01. Regulation FD Disclosure.
Comparable Store Sales Calculation Change. The company has updated its
calculation of comparable store sales to more accurately reflect business
trends, including the growing importance of service-related revenues.
During the fourth quarter ended February 28, 2005, the company expanded the
revenues included in comparable store sales to include extended warranties,
installations and other non-merchandise revenues. Previously, revenues included
in the comparable store sales calculation were limited to merchandise sales.
A summary of the comparable store sales changes for fiscal 2005 were disclosed
in the fiscal year 2005 sales release dated March 4, 2005 and in the Form 8-K
filed the same day. A summary of comparable store sales changes under the
previous methodology compared to comparable store sales changes for those
periods of fiscal 2004 using the current methodology follows.
Previous Current
Fiscal 2004 Methodology Methodology
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First Quarter....................... (9.6)% (10.5)%
Second Quarter...................... (4.6)% (3.3)%
Third Quarter....................... (0.7)% (1.7)%
December............................ (2.0)% (2.0)%
Fourth Quarter...................... 1.1% 1.3%
Fiscal Year......................... (2.9)% (1.2)%
Reclassification of Certain Revenues, Costs and Expenses. The company has
reclassified certain revenues, costs and expenses relating primarily to mobile
audio installations. These items, which were previously presented on a net basis
as an offset to selling, general and administrative expense, will now be
presented on a gross basis. Consolidated statements of operations that reflect
the reclassifications for the first three quarters of fiscal 2005 and the four
quarters of fiscal 2004 were included in the fiscal year 2005 sales release
dated March 4, 2005 and in the Form 8-K filed the same day.
The selling, general and administrative expenses for the first three quarters of
fiscal 2005 are as follows:
Selling, General and Administrative Expenses
Three Months Ended
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May 31, 2004 Aug. 31, 2004 Nov. 30, 2004
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% of % of % of
(Dollar amounts in millions) $(a) Sales $(b) Sales $(c) Sales
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Store expense........................ $457.6 21.9% $526.3 22.1% $559.4 22.1%
General and administrative expenses.. 43.9 2.0 56.6 2.4 61.0 2.4
Remodel expenses..................... 0.1 - - - 0.2 -
Relocation expenses.................. 1.9 0.1 16.5 0.7 14.9 0.6
Pre-opening expenses................. 0.8 - 3.6 0.1 7.5 0.3
Interest income...................... (2.1) (0.1) (3.2) (0.1) (3.4) (0.1)
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Total............................... $502.2 23.9% $599.8 25.2% $639.6 25.3%
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(a) Includes international segment store expenses of $6.6 and general and
administrative expenses of $1.4 million.
(b) Includes international segment store expenses of $32.1 and general and
administrative expenses of $8.2 million.
(c) Includes international segment store expenses of $38.2 and general and
administrative expenses of $8.4 million.
The selling, general and administrative expenses by quarter for fiscal 2004 are
as follows:
Selling, General and Administrative Expenses
Three Months Ended
--------------------------------------------------------------------- Fiscal Year Ended
May 31, 2003 Aug. 31, 2003 Nov. 30, 2003 Feb. 29, 2004 Feb. 29, 2004
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% of % of % of % of % of
(Dollar amounts in millions) $ Sales $ Sales $ Sales $ Sales $ Sales
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Store expense.................. $447.4 22.9% $485.5 22.3% $521.3 21.5% $564.6 17.1% $2,018.8 20.5%
General and administrative
expenses..................... 42.1 2.1 48.0 2.2 46.6 1.9 65.4 2.0 202.3 2.1
Remodel expenses............... 11.4 0.6 18.2 0.8 0.3 - (5.9) (0.2) 23.9 0.2
Relocation expenses............ 5.1 0.2 4.0 0.2 9.8 0.4 11.6 0.4 30.5 0.3
Pre-opening expenses........... 1.7 0.1 1.4 0.1 4.2 0.2 1.3 - 8.6 0.1
Interest income................ (2.4) (0.1) (1.7) (0.1) (1.2) (0.1) (1.2) - (6.6) (0.1)
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Total.......................... $505.3 25.8% $555.4 25.5% $581.0 23.9% $635.8 19.3% $2,277.5 23.1%
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The change in the comparable store sales calculation and the reclassifications
have no impact on historical or future earnings or loss before taxes, net
earnings or loss, or cash flows.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CIRCUIT CITY STORES, INC.
By: /s/Philip J. Dunn
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Philip J. Dunn
Senior Vice President, Treasurer,
Corporate Controller and
Chief Accounting Officer
Date: April 8, 2005