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.

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,

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.

We believe overall sales performance was strong during the final week of the month and that July 4 business likely provided a boost to June results.

Selling is simply the transfer of inthusiasm.

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,