RICHMOND, Va. -- Circuit City Stores Inc. said its fourth-quarter profit rose 11 percent, even though gross margins slipped because of increased competition and higher computer sales.
For the quarter ended Feb. 28, the Richmond-based electronics and appliances retailer said net income rose to $67.7 million, or 70 cents a share, from $60.8 million, or 63 cents, a year earlier.
Earnings were below a Wall Street estimate of 72 cents a share, according to a survey of 16 analysts by Zacks Investment Service.
Revenue rose 28 percent to $1.41 billion from $1.10 billion a year earlier, while same-store sales rose 9 percent.
Total sales in March rose 32 percent from a year ago and March same-store sales rose 14 percent, largely because of stronger sales in Southern California, the company said.
Circuit City said its gross profit fell to 27.5 percent of revenue from 29.1 percent a year earlier, reflecting increased competition and continued growth in computer sales.
"We expect that competition in our categories will continue to increase in fiscal 1995," said Richard Sharp, Circuit City's president.
Mr. Sharp said expenses related to the company's aggressive expansion plans could hurt fiscal 1995 earnings. Circuit City expects to open 60 superstores in fiscal 1995.
For fiscal 1994, the company said net income rose to $132.4 million, or $1.36 a share, from $110.3 million, or $1.15, a year earlier.
Revenue rose 26 percent to $4.13 billion from $3.27 billion. Same- store sales, or sales at stores open for at least a year, rose 8 percent.