UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            -------------------------

                                    FORM 10-Q


[X]      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 For the quarterly period ended November 30, 2004
                                       OR
[  ]     Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 For the transition period from ____to ____

                         Commission file number: 1-5767

                            CIRCUIT CITY STORES, INC.
             (Exact name of registrant as specified in its charter)

                 Virginia                               54-0493875
      (State or other jurisdiction of                (I.R.S. Employer
      incorporation or organization)                Identification No.)

            9950 Mayland Drive
            Richmond, Virginia                             23233
(Address of principal executive offices)                (Zip Code)

                                 (804) 527- 4000
              (Registrant's telephone number, including area code)

                                       N/A
              (Former name, former address, and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes |X| No

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes |X| No ___ 

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

                 Class                        Outstanding at December 31, 2004
      Common Stock, par value $0.50                        191,276,495


A Table of Contents  is  included on Page 2 and an Exhibit  Index is included on
Page 28.






                   CIRCUIT CITY STORES, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

                                                                                                                    Page
                                                                                                                     No.

PART I.  FINANCIAL INFORMATION

                  Item 1.      Financial Statements:

                               Consolidated Statements of Operations -
                               Three Months and Nine Months Ended November 30, 2004 and 2003                          3

                               Consolidated Balance Sheets -
                               November 30, 2004 and February 29, 2004                                                4

                               Consolidated Statements of Cash Flows -
                               Nine Months Ended November 30, 2004 and 2003                                           5

                               Notes to Consolidated Financial Statements                                             6

                  Item 2.      Management's Discussion and Analysis of Financial Condition
                               and Results of Operations                                                             14

                  Item 3.      Quantitative and Qualitative Disclosures about Market Risk                            24

                  Item 4.      Controls and Procedures                                                               24

PART II.          OTHER INFORMATION

                  Item 1.      Legal Proceedings                                                                     24

                  Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds                           25

                  Item 6.      Exhibits                                                                              25

SIGNATURES                                                                                                           27

EXHIBIT INDEX                                                                                                        28


                                  Page 2 of 28


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                   Circuit City Stores, Inc. and Subsidiaries
                Consolidated Statements of Operations (Unaudited)
                  (Amounts in thousands except per share data)

                                                                 Three Months Ended                    Nine Months Ended
                                                                     November 30                          November 30
                                                              2004               2003                2004             2003     
                                                          -------------      ------------       ------------      -------------
Net sales and operating revenues                             $2,493,389      $   2,407,424        $6,905,003         $6,496,444
Cost of sales, buying and warehousing                         1,866,350          1,872,600         5,219,994          5,025,935
                                                          -------------      -------------      ------------      -------------
Gross profit                                                    627,039            534,824         1,685,009          1,470,509

Finance income                                                        -              5,631             5,564             22,418
Selling, general and administrative expenses                    628,841            572,217         1,702,963          1,611,350
Stock-based compensation expense                                  6,442             10,775            20,839             30,421
Interest expense                                                    476                169             1,625              1,479
                                                          -------------      -------------      ------------      -------------
Loss from continuing operations
     before income taxes                                         (8,720)           (42,706)          (34,854)          (150,323)
Income tax benefit                                               (2,820)           (14,651)          (12,304)           (54,868)
                                                          -------------      -------------      ------------      -------------
Net loss from continuing operations                              (5,900)           (28,055)          (22,550)           (95,455)
Net earnings (loss) from discontinued operations                      -             25,546            (1,214)           (83,375)
                                                          -------------      -------------      ------------      -------------
Net loss                                                  $      (5,900)     $      (2,509)     $    (23,764)     $    (178,830)
                                                          =============      =============      ============      =============

Weighted average common shares:
    Basic                                                       191,135            206,441           195,321            206,148
                                                           ============      =============      ============      =============
    Diluted                                                     191,135            206,441           195,321            206,148
                                                           ============      =============      ============      =============
Net (loss) earnings per share:
    Basic:
       Continuing operations                               $      (0.03)     $      (0.14)      $      (0.12)     $       (0.46)
       Discontinued operations                                        -              0.12              (0.01)             (0.40)
                                                           ------------      ------------       ------------      -------------
                                                           $      (0.03)     $      (0.01)      $      (0.12)     $       (0.87)
                                                           ============      ============       ============      =============
    Diluted:
       Continuing operations                               $      (0.03)     $      (0.14)      $      (0.12)     $       (0.46)
       Discontinued operations                                        -              0.12              (0.01)             (0.40)
                                                           ------------      ------------       ------------      -------------
                                                           $      (0.03)     $      (0.01)      $      (0.12)     $       (0.87)
                                                           ============      ============       ============      =============


    Cash dividends paid per share                          $     0.0175      $      0.0175      $     0.0525      $      0.0525
                                                           ============      =============      ============      =============

See accompanying notes to consolidated financial statements.




                                  Page 3 of 28


                   Circuit City Stores, Inc. and Subsidiaries
                           Consolidated Balance Sheets
                    (Amounts in thousands except share data)

                                                                                         Nov. 30, 2004         Feb. 29, 2004
                                                                                          (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                                                               $      752,478        $     783,471
Accounts receivable, net of allowance for doubtful accounts
     of $429 and $547                                                                          126,932              154,039
Retained interests in securitized receivables                                                        -              425,678
Merchandise inventory                                                                        2,458,876            1,517,256
Prepaid expenses and other current assets                                                       42,383               38,617
                                                                                          ------------           ----------

Total current assets                                                                         3,380,669            2,919,061

Property and equipment, net                                                                    645,785              585,903
Deferred income taxes                                                                           80,699               98,934
Goodwill                                                                                       223,954                    -
Other intangible assets                                                                         33,559                    -
Other assets                                                                                    15,814               29,102
                                                                                           -----------           ----------

TOTAL ASSETS                                                                                $4,380,480           $3,633,000
                                                                                            ==========           ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                            $1,806,028        $     879,635
Accrued expenses and other current liabilities                                                 213,932              131,512
Accrued income taxes                                                                            23,862               71,163
Deferred income taxes                                                                           18,335               90,210
Short-term debt                                                                                 12,648                    -
Current installments of long-term debt                                                          13,461                1,115
Liabilities of discontinued operation                                                                -                3,068
                                                                                            ----------           ----------

Total current liabilities                                                                    2,088,266            1,176,703

Long-term debt, excluding current installments                                                  11,756               22,691
Accrued straight-line rent                                                                      97,911               98,470
Other liabilities                                                                              127,812              111,175
                                                                                          ------------          -----------

TOTAL LIABILITIES                                                                            2,325,745            1,409,039
                                                                                           -----------           ----------

Stockholders' equity:
Common stock, $0.50 par value;
     525,000,000 shares authorized; 191,249,797 shares
     issued and outstanding at November 30, 2004
     (203,899,395 at February 29, 2004)                                                         95,625              101,950
Capital in excess of par value                                                                 759,406              922,600
Retained earnings                                                                            1,165,149            1,199,411
Accumulated other comprehensive income                                                          34,555                    -
                                                                                           -----------          -----------

TOTAL STOCKHOLDERS' EQUITY                                                                   2,054,735            2,223,961
                                                                                           -----------           ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $4,380,480           $3,633,000
                                                                                            ==========           ==========

See accompanying notes to consolidated financial statements.

                                  Page 4 of 28


                   Circuit City Stores, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
                             (Amounts in thousands)
                                                                                                  Nine Months Ended
                                                                                                     November 30
                                                                                             2004                  2003    
                                                                                       ---------------        -------------
Operating Activities:
Net loss                                                                                 $     (23,764)       $    (178,830)
Adjustments to reconcile net loss to net cash provided by (used in)
    operating activities of continuing operations:
    Net loss from discontinued operations                                                        1,214               83,375
    Depreciation and amortization                                                              113,559              143,078
    Stock option expense                                                                        14,271               18,287
    Amortization of restricted stock awards                                                      5,942               11,312
    Loss on dispositions of property and equipment                                               2,262                  549
    Provision for deferred income taxes                                                        (82,063)               3,107
    Changes in operating assets and liabilities:
       Increase in accounts receivable, net                                                    (35,997)             (33,299)
       Decrease (increase) in retained interests in securitized receivables                     32,867              (98,732)
       Increase in merchandise inventory                                                      (832,085)          (1,241,342)
       Increase in prepaid expenses and other current assets                                    (7,078)             (66,780)
       Decrease in other assets                                                                 14,939                9,443
       Increase in accounts payable                                                            896,417              830,165
       Decrease in accrued expenses and other current liabilities,
           and accrued income taxes                                                             (7,327)             (37,483)
       (Decrease) increase in accrued straight-line rent and other liabilities                  (2,542)              10,460
                                                                                         -------------       --------------
Net cash provided by (used in) operating activities of
    continuing operations                                                                       90,615             (546,690)
                                                                                         -------------       --------------
Investing Activities:
--------------------
Proceeds from the sale of the private-label finance operation                                  475,857                    -
Acquisitions, net of cash acquired of $30,615                                                 (268,668)                   -
Purchases of property and equipment                                                           (207,755)            (134,251)
Proceeds from sales of property and equipment                                                   86,490               21,257
                                                                                         -------------       --------------
Net cash provided by (used in) investing activities of
    continuing operations                                                                       85,924             (112,994)
                                                                                          ------------        --------------
Financing Activities:
--------------------
Proceeds from short-term debt, net                                                              10,183                    -
Principal payments on long-term debt                                                           (15,081)              (1,024)
Repurchase and retirement of common stock                                                     (210,052)             (13,941)
Issuances of common stock, net                                                                  20,849                9,610
Dividends paid                                                                                 (10,498)             (10,968) 
                                                                                         -------------       --------------
Net cash used in financing activities of continuing operations                                (204,599)             (16,323)
                                                                                         -------------       --------------
Net cash (used in) provided by discontinued bankcard finance operation                          (4,282)             246,680
Effect of exchange rate changes on cash                                                          1,349                    -
                                                                                         -------------       --------------
Decrease in cash and cash equivalents                                                          (30,993)            (429,327)
Cash and cash equivalents at beginning of year                                                 783,471              884,670
                                                                                         -------------       --------------
Cash and cash equivalents at end of period                                               $     752,478       $      455,343
                                                                                         =============       ==============

See accompanying notes to consolidated financial statements. See Note 13 for
supplemental cash flow information.


                                  Page 5 of 28



                   CIRCUIT CITY STORES, INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

1.   Basis of Presentation

     The consolidated  financial statements of the company conform to accounting
     principles  generally  accepted  in the United  States of  America.  In the
     opinion of management,  the  accompanying  unaudited  financial  statements
     contain  all   adjustments,   which  consist  only  of  normal,   recurring
     adjustments,  necessary for a fair presentation. Due to the seasonal nature
     of the company's  business,  interim  results are not indicative of results
     for the entire fiscal year. The company's consolidated financial statements
     included in this report should be read in conjunction with the notes to the
     audited  financial  statements  incorporated  by reference in the company's
     fiscal 2004 Annual Report on Form 10-K.

     On May 12, 2004, the company  acquired a controlling  interest in InterTAN,
     Inc. and on May 19, 2004,  completed its  acquisition of 100 percent of the
     common stock of InterTAN for cash  consideration  of $259.3 million,  which
     includes  transaction  costs and is net of cash acquired of $30.6  million.
     InterTAN is a leading consumer  electronics  retailer of both private-label
     and internationally  branded products with headquarters in Barrie, Ontario,
     Canada.  InterTAN  operates  through  retail  stores and dealer  outlets in
     Canada  under the trade  names  RadioShack(R),  Roger  Plus(R)  and Battery
     Plus(R). In addition to enabling Circuit City to accelerate the offering of
     private-label  merchandise  to its customers,  the  acquisition of InterTAN
     gives Circuit City its first  presence in the Canadian  market.  See Note 3
     for additional discussion of the acquisition.

     On May 25,  2004,  the  company  completed  the  sale of its  private-label
     finance  operation,  comprised of its  private-label  and  co-branded  Visa
     credit  card  programs,   to  Chase  Card   Services,   formerly  Bank  One
     Corporation.  Results from the private-label  finance operation,  including
     transition and transaction costs of approximately $6 million related to the
     sale of the  operation,  are included in finance  income.  The company also
     entered  into a Consumer  Credit Card Program  Agreement  under which Chase
     Card Services is offering  private-label and co-branded credit cards to new
     and existing customers of the company. The company is compensated under the
     program agreement primarily based on the number of new accounts opened less
     promotional financing costs that exceed a negotiated base amount. After the
     sale date, the earnings  contribution  from the program  agreement has been
     included in net sales and operating revenues on the consolidated  statement
     of operations. See Note 12 for additional discussion concerning the sale of
     the private-label finance operation and the consumer credit agreement.

     On November  18,  2003,  the  company  completed  the sale of its  bankcard
     finance   operation,   which  included  Visa  and  MasterCard  credit  card
     receivables  and related cash reserves.  Results from the bankcard  finance
     operation are presented as results from discontinued operations. See Note 2
     for  additional  discussion  concerning  the sale of the  bankcard  finance
     operation.

     Certain prior year amounts have been reclassified to conform to the current
     presentation.

2.   Discontinued Operations

     On November  18,  2003,  the  company  completed  the sale of its  bankcard
     finance  operation  to  FleetBoston  Financial.  Results  from the bankcard
     finance  operation are presented as results from  discontinued  operations.
     The sale agreement  included a transition  services  agreement  under which
     employees  of the  company's  finance  operation  continued  to service the
     bankcard  accounts  until final  conversion  of the  bankcard  portfolio to
     FleetBoston,   which  occurred  on  April  2,  2004.   Through  that  date,
     FleetBoston  reimbursed the company for operating costs incurred during the
     transition period. The company incurred severance costs ratably through the
     final conversion date.

     The net earnings from discontinued operations totaled $25.5 million for the
     three  months  ended  November  30,  2003.  The total is comprised of $24.0
     million of after-tax earnings from the discontinued bankcard


                                  Page 6 of 28


     operation and $1.5 million from the  discontinued  Divx  operation due to a
     $2.3 million  reduction in the provision for  commitments  under  licensing
     agreements.

     For the nine months ended November 30, 2004, the net loss from discontinued
     operations  totaled  $1.2  million,  which  is  comprised  of  post-closing
     adjustments  related to the sale of the  bankcard  operation.  The net loss
     from  discontinued  operations for the nine months ended November 30, 2003,
     was  $83.4  million  and is  comprised  of an  after-tax  net loss of $84.9
     million from the discontinued  bankcard operation and after-tax earnings of
     $1.5 million from the discontinued Divx operation.

     Cash  flows  related  to the  discontinued  bankcard  operation  have  been
     segregated on the consolidated statements of cash flows.

3.   Acquisition of InterTAN, Inc.

     On May 12, 2004, the company  acquired a controlling  interest in InterTAN,
     Inc. and on May 19, 2004,  completed its  acquisition of 100 percent of the
     common stock of InterTAN for cash  consideration  of $259.3 million,  which
     includes  transaction  costs and is net of cash acquired of $30.6  million.
     This  acquisition was accounted for using the purchase method in accordance
     with  Statement  of  Financial  Accounting  Standards  No.  141,  "Business
     Combinations."  Accordingly,  the company  recorded the net assets at their
     estimated fair values,  and included  operating results in the consolidated
     financial statements since May 12, 2004. The company allocated the purchase
     price to the acquired assets and liabilities  using available  information.
     The  purchase  price  allocation  includes  goodwill of $186.3  million and
     identifiable intangible assets of $28.0 million. Goodwill is not deductible
     for tax purposes.  SFAS No. 142, "Goodwill and Intangible Assets," requires
     that goodwill and other  intangible  assets be evaluated for  impairment at
     least   annually.   The   identifiable   intangible   assets   consist   of
     contract-based  intangibles and will be amortized on a straight-line  basis
     over their estimated useful lives,  which range from 4.5 years to 20 years.
     The company  evaluated  goodwill  and the  identifiable  intangible  assets
     during  the  second  quarter  of this  fiscal  year  and will  perform  the
     impairment  evaluation  annually  during the second  quarter of each fiscal
     year.  See Note 9 and Note 13 for  additional  discussion  of goodwill  and
     other intangible assets.

     Selected  historical  and pro  forma  financial  information  assuming  the
     acquisition  had been  consummated  at the  beginning of fiscal 2004 was as
     follows:




                                                                  Three Months Ended                   Nine Months Ended
                                                                       November 30                        November 30
                                                                   2004           2003                2004           2003
     (Amounts in millions except per share data)               Historical       Pro Forma          Pro Forma       Pro Forma
     ------------------------------------------------------------------------------------        ---------------------------
     Net sales and operating revenues.......................     $2,493.4        $2,531.6           $6,984.3         $6,809.8
     Net loss from continuing operations....................     $    5.9        $   25.8           $   22.3         $   94.8
     Net loss per share from continuing
       operations...........................................     $   0.03        $   0.13           $   0.11         $   0.46
     Net loss...............................................     $    5.9        $    0.3           $   23.5         $  178.2
     Net loss per share.....................................     $   0.03        $      -           $   0.12         $   0.86


     After  Circuit  City's  March 31, 2004  announcement  of its  agreement  to
     acquire InterTAN,  RadioShack Corporation asserted early termination of its
     licensing and other agreements with InterTAN.  On April 5, 2004, RadioShack
     filed suit against  InterTAN,  and amended that suit on April 27, 2004 (the
     "RadioShack  litigation").  InterTAN  disputes  the  termination  scenarios
     alleged by RadioShack and is vigorously  defending against those claims. On
     May 11, 2004, InterTAN asserted a counterclaim  seeking a declaration under
     U.S. federal  trademark law that the use of the RadioShack marks is proper.
     Circuit City was added as a necessary  party to that litigation and removed
     the matter to Federal Court in the Northern  District of Texas.  On May 12,
     2004,  Circuit  City  filed its own suit in Federal  Court in the  Northern
     District of Texas seeking a declaration  under U.S.  federal  trademark law
     that  the  use  of the  marks  in  Canada  is  proper  (the  "Circuit  City
     litigation").  InterTAN  has  cross-claimed  against  RadioShack  based  on
     federal trademark law and remedies for business disparagement.  On December
     9, 2004, the federal court remanded the RadioShack


                                  Page 7 of 28


     litigation back to the Texas state court. On December 14, 2004, the federal
     court granted  RadioShack's  motion to dismiss the Circuit City  litigation
     and the related InterTAN cross-claims.

     Circuit City believes that RadioShack is not entitled to early  termination
     of the  agreements  and  that  InterTAN  has  substantial  defenses  to the
     RadioShack  claims.  Circuit City and InterTAN intend to vigorously  pursue
     all claims and defend the claims in the RadioShack litigation. Circuit City
     believes that this  litigation  will not have a material  adverse effect on
     the company's financial condition or results of operations.

4.   Finance Income

     Finance  income  includes  the  results  from the  company's  private-label
     finance   operation,   including   transition  and  transaction   costs  of
     approximately $6 million related to the sale of the operation to Chase Card
     Services, through May 25, 2004, the date the company completed the sale.

     For the  three and nine  months  ended  November  30,  2004 and  2003,  the
     components of pretax finance income were as follows:



                                                                       Three Months Ended                   Nine Months Ended
                                                                           November 30                         November 30
     (Amounts in millions)                                            2004            2003               2004            2003  
     -------------------------------------------------------------------------------------              -----------------------
     Securitization income......................................     $  -            $ 25.3              $28.1            $83.0
     Less: Payroll and fringe benefit expenses..................        -               7.0                7.6             22.6
             Other direct expenses..............................        -              12.7               14.9             38.0
                                                                     ----------------------             -----------------------
     Finance income.............................................     $  -            $  5.6             $  5.6            $22.4
                                                                     ======================             =======================


     Securitization  income  primarily  is  comprised of the gain on the sale of
     receivables  generated by the company's  private-label  finance  operation,
     income from retained  interests in the credit card  receivables  and income
     related to servicing the receivables, as well as the impact of increases or
     decreases  in the fair  value  of the  retained  interests.  Securitization
     income is reduced by payroll,  fringe  benefits  and other  costs  directly
     associated  with the management  and  securitization  of the  private-label
     receivables.

5.   Stock-Based Compensation

     Effective December 1, 2003, the company adopted the fair value based method
     of accounting for stock-based compensation in accordance with SFAS No. 123,
     "Accounting  for Stock-Based  Compensation."  The adoption of this standard
     was applied using the retroactive restatement method as defined in SFAS No.
     148, "Accounting for Stock-Based Compensation - Transition and Disclosure."
     The following  table sets forth the effect of the  retroactive  restatement
     for adoption of SFAS No. 123.



     (Amounts in thousands                                              Three Months Ended                 Nine Months Ended 
      except per share data)                                             November 30, 2003                 November 30, 2003
     -------------------------------------------------------------------------------------                 -----------------
     Net loss from continuing operations:
       Previously reported......................................              $24,073                             $83,321
       Restated for adoption of SFAS No. 123....................              $28,055                             $95,455
     Net loss per share from continuing operations:
       Basic:
          Previously reported...................................              $  0.12                             $  0.40
          Restated for adoption of SFAS No. 123.................              $  0.14                             $  0.46

       Diluted:
          Previously reported...................................              $  0.12                             $  0.40
          Restated for adoption of SFAS No. 123.................              $  0.14                             $  0.46



                                  Page 8 of 28


     The fair value of each stock option  granted by the company is estimated as
     of the grant date  using the  Black-Scholes  option-pricing  model with the
     following weighted average assumptions.



                                                               Three Months Ended                  Nine Months Ended
                                                                   November 30                        November 30
                                                             2004             2003               2004             2003 
-------------------------------------------------------------------------------------           -----------------------
     Expected dividend yield..........................       0.5%            1.1%                0.6%             1.1%
     Expected stock volatility........................        63%             76%                 64%              76%
     Risk-free interest rates.........................         3%              2%                  4%               3%
     Expected lives (in years)........................         5               5                   4                5

     Using these  assumptions in the  Black-Scholes  model, the weighted average
     fair value of  options  granted  was $8.25 per option for the three  months
     ended  November  30,  2004,  and $6.61 per option for the nine months ended
     November 30, 2004. The weighted  average fair value of options  granted was
     $3.76 per option for the three  months ended  November 30, 2003,  and $3.59
     per option for the nine months ended November 30, 2003.

     See Note 15 for a discussion  of SFAS No.  123(R),  which was issued by the
     Financial Accounting Standards Board in December 2004.

6.   Comprehensive Income (Loss)

     The components of the company's  comprehensive income (loss) consist of the
     net loss and other  comprehensive  income.  Other  comprehensive  income is
     comprised of foreign currency  translation  adjustments and is recorded net
     of deferred income taxes directly to stockholders' equity.

     The  components  of  comprehensive  income  (loss),  net of taxes,  were as
     follows:

                                                                       Three Months Ended                   Nine Months Ended
                                                                           November 30                         November 30
     (Amounts in millions)                                            2004            2003                2004              2003
     ---------------------------------------------------------------------------------------            ------------------------
     Net loss...................................................     $ (5.9)          $(2.5)            $(23.8)          $(178.8)
     Foreign currency translation...............................       25.0               -               34.6                 -
                                                                     -----------------------            -----------------------
     Comprehensive income (loss)................................      $19.1           $(2.5)            $ 10.8           $(178.8)
                                                                      =====================             ========================


7.   Net (Loss) Earnings per Share

     For the three and nine months ended November 30, 2004 and 2003, no options
     or restricted stock were included in the calculation of diluted net loss
     per share because the company reported a loss from continuing operations.
     Options to purchase 17.4 million shares of common stock with exercise
     prices ranging from $3.10 to $27.21 and restricted stock amounting to 2.3
     million shares were outstanding at November 30, 2004. Options to purchase
     18.6 million shares of common stock with exercise prices ranging from $5.61
     to $27.21 per share and restricted stock amounting to 3.6 million shares
     were outstanding at November 30, 2003.

8.   Restricted Cash

     The sale of the private-label  finance  operation  eliminated the company's
     obligation to restrict cash for settlement  obligations.  During the second
     quarter  of fiscal  2005,  the  company  settled  the  remaining  liquidity
     restrictions  on the  cash of  First  North  American  National  Bank,  the
     company's wholly owned national bank subsidiary, as part of the liquidation
     of that subsidiary.  As a result, the company did not have any cash or cash
     equivalents held by the company's regulated  subsidiaries and thus all cash
     and cash  equivalents  were  available  for general  corporate  purposes at
     November  30,  2004.  Cash  and  cash  equivalents  held  by the  company's
     regulated  subsidiaries  and not available for general  corporate  purposes
     were $61.6 million at February 29, 2004.


                                  Page 9 of 28


9.   Goodwill and Other Intangible Assets

     The changes in the carrying  amount of goodwill by  reportable  segment for
     the nine months ended November 30, 2004, were as follows:



                                                                     Domestic              International
     (Amounts in millions)                                       Retail Operation         Retail Operation             Total  
     -------------------------------------------------------------------------------------------------------------------------
     Balance at February 29, 2004............................         $   -                   $     -                $      -
     Goodwill resulting from acquisitions....................           2.5                     189.3                   191.8
     Changes in foreign currency exchange rates..............             -                      32.2                    32.2
                                                                      -----                   -------                 -------
     Balance at November 30, 2004............................          $2.5                    $221.5                  $224.0
                                                                       ====                    ======                  ======

     Acquired intangible assets at November 30, 2004, were as follows:

                                                                         At November 30, 2004
                                                                               Weighted
                                                             Gross              Average
                                                           Carrying          Amortization              Accumulated
     (Dollar amounts in millions)                           Amount         Period (in years)          Amortization
     -------------------------------------------------------------------------------------------------------------
     Dealer-relationship contracts................            $15.2               20.0                    $0.4
     Vendor contract..............................             11.7               10.0                     0.5
     Employment agreements........................              5.8                4.5                     0.6
     Other........................................              2.9                2.9                     0.5
                                                             ------                                      -----
     Total........................................            $35.6                                       $2.0
                                                              =====                                      =====



     Amortization expense for amortizing  intangible assets was $1.0 million for
     the three  months ended  November  30, 2004,  and $2.0 million for the nine
     months ended November 30, 2004.  The company did not have any  amortization
     expense in the first quarter of fiscal 2005. Estimated amortization expense
     for fiscal 2005 is $3.1  million.  Estimated  amortization  expense for the
     next five fiscal years is $4.3 million in 2006,  $4.1 million in 2007, $3.5
     million in 2008,  $2.9  million in 2009,  and $1.9  million in 2010.  These
     amortization  expense  estimates  are  subject to  fluctuations  in foreign
     currency  exchange rates. See Note 3 and Note 13 for additional  discussion
     of goodwill and other intangible assets.

10.  Common Stock Repurchased

     In January 2003, the company's board of directors authorized the repurchase
     of up to $200 million of common stock. In June 2004, the board authorized a
     $200  million  increase  in  its  stock  repurchase  authorization  for  an
     aggregate  authorization  of $400  million.  During the three  months ended
     November 30, 2004, the company  repurchased  and retired 4.5 million shares
     under that  authorization  at a cost of $69.4 million.  For the nine months
     ended November 30, 2004, the company  repurchased  and retired 15.6 million
     shares under that authorization at a cost of $210.1 million. As of November
     30, 2004,  the company had  repurchased  and retired 24.8 million shares of
     common stock under that authorization at a cost of $294.4 million. Based on
     the market value of the common stock at November  30, 2004,  the  remaining
     $105.6  million  authorized  would  allow the company to  repurchase  up to
     approximately 4 percent of the 191.2 million shares then outstanding.

11.  Pension Plans

     The company  provides a  noncontributory  defined  benefit  pension plan to
     eligible  employees.  Plan benefits generally are based on years of service
     and average  compensation.  The company  also has an unfunded  nonqualified
     benefit  restoration  plan that  restores  retirement  benefits  for senior
     executives  who are  affected  by  Internal  Revenue  Code  limitations  on
     benefits provided under the company's pension plan.


                                 Page 10 of 28



     The components of the net pension expense for the plans were as follows:



                                                                  Three Months Ended                   Nine Months Ended
                                                                       November 30                        November 30
     (Amounts in thousands)                                      2004             2003               2004            2003  
     -----------------------------------------------------------------------------------         --------------------------
     Service cost...........................................   $   3,497        $  3,968           $10,492          $11,905
     Interest cost.........................................        3,898           3,316            11,694            9,947
     Expected return on plan assets........................       (4,093)         (3,630)          (12,278)         (10,889)
     Amortization of prior service cost....................          119             119               356              356
     Amortization of recognized actuarial loss.............        1,255             818             3,765            2,454
     Adjustment due to the freezing of the plans...........          243               -               243                -
                                                               -------------------------        ---------------------------
     Net pension expense...................................    $   4,919          $4,591           $14,272          $13,773
                                                               =========================           ========================


     On October 18, 2004, the board of directors approved an amendment to freeze
     both the pension and benefit  restoration  plans,  effective  February  28,
     2005. Once the pension plan is frozen, all eligible  associates will retain
     any  benefits  accumulated  to the  effective  date,  but will no longer be
     eligible to increase  their  benefit.  Eligible  employees will continue to
     earn  vesting  credit  toward  the  pension  plan's  vesting  requirements.
     Employees who would be eligible to retire under both plans' early or normal
     retirement  provisions  on or before  February  29,  2008,  are  considered
     grandfathered employees and are not subject to the plan changes.

     Circuit  City made no  contributions  to its defined  benefit  pension plan
     during the first nine months of fiscal  2005.  The company  intends to make
     any  contributions  to the  defined  benefit  pension  plan  that  would be
     necessary  to meet  ERISA  minimum  funding  standards  and any  additional
     contributions  as needed to ensure  that the fair  value of plan  assets at
     February 28, 2005, exceeds the accumulated benefit obligation.  The company
     expects to make a contribution of approximately $20 million in fiscal 2005.
     The company's  expected  contribution for the restoration plan is $463,000,
     which is equal to the expected benefit payments for the plan.

12.  Segment Information

     The company has two reportable segments:  its domestic retail operation and
     its international  retail operation.  The company identified these segments
     based on its management  reporting structure and the nature of the products
     and services offered by each segment. The domestic retail operation segment
     is  primarily  engaged  in the  business  of  selling  brand-name  consumer
     electronics,  personal  computers and entertainment  software in the United
     States. The international  retail operation segment is primarily engaged in
     the business of selling private-label and internationally  branded consumer
     electronics products in Canada. Prior to the second quarter of fiscal 2005,
     the company had a third  reportable  segment,  its finance  operation.  The
     company  completed  the  sale  of  its  private-label   finance  operation,
     comprised of its private-label and Visa co-branded credit card programs, to
     Chase Card Services on May 25, 2004. Results from the private-label finance
     operation,  including  transition and transaction costs of approximately $6
     million  related  to the sale of the  operation,  are  included  in finance
     income. See Note 4 for additional discussion of finance income. The company
     has entered into an arrangement under which Chase Card Services is offering
     private-label and co-branded credit cards to new and existing  customers of
     the company and providing  credit card services to all  cardholders.  After
     the sale date, the earnings  contribution  from that  arrangement  has been
     included in net sales and operating revenues on the consolidated  statement
     of operations and is included in the domestic  retail  segment.  Net credit
     revenues  of $1.9  million  for  the  third  quarter  include  new  account
     activation  revenues of $13.3 million offset by promotional  financing cost
     of $11.5  million.  Net credit  revenues of $8.3 million for the first nine
     months of the current fiscal year include new account  activation  revenues
     of $24.3 million offset by promotional financing cost of $16.1 million.

     The  accounting  policies for the company's  segments are the same as those
     set forth in Note 14 below and Note 2 to the company's audited consolidated
     financial statements incorporated by reference in the company's fiscal 2004
     Annual Report on Form 10-K.


                                 Page 11 of 28


     Revenue by reportable  segment and the  reconciliation  to the consolidated
     statements of operations were as follows:
 



                                                                      Three Months Ended              Nine Months Ended
                                                                           November 30                     November 30
     (Amounts in millions)                                            2004            2003             2004           2003   
     ----------------------------------------------------------------------------------------      --------------------------
     Domestic retail operation.................................     $2,351.4         $2,407.4        $6,623.6        $6,496.4
     International retail operation............................        142.0                -           281.4               -
     Finance operation.........................................            -             25.3            28.1            83.0
                                                                  ---------------------------      --------------------------
     Total revenue.............................................      2,493.4          2,432.7         6,933.1         6,579.4
     Less: securitization income*..............................            -             25.3            28.1            83.0
                                                                  ---------------------------      --------------------------
     Net sales and operating revenues .........................     $2,493.4         $2,407.4        $6,905.0        $6,496.4
                                                                    =========================        ========================

     *Securitization  income is  included in finance  income,  which is reported
     separately  from net sales and  operating  revenues  on the  statements  of
     operations.

     The loss or earnings  from  continuing  operations  before  income taxes by
     reportable segment and the reconciliation to the consolidated statements of
     operations were as follows:

                                                                     Three Months Ended                Nine Months Ended
                                                                           November 30                   November 30
     (Amounts in millions)                                            2004          2003              2004           2003 
     -------------------------------------------------------------------------------------         -----------------------
     Domestic retail operation.................................     $(17.6)        $(48.3)           $(55.5)       $(172.7)
     International retail operation............................        8.9              -              15.0              -
     Finance operation.........................................          -            5.6               5.6           22.4
                                                                  -----------------------          -----------------------
     Loss from continuing operations before income
         taxes.................................................   $   (8.7)        $(42.7)           $(34.9)       $(150.3)
                                                                  ======================             =====================

     Total  assets  by  reportable   segment  and  the   reconciliation  to  the
     consolidated balance sheets were as follows:
    
                                                               At November 30        At February 29
     (Amounts in millions)                                            2004                 2004        
     -----------------------------------------------------------------------------  -------------------
     Domestic retail operation................................      $3,906.3              $3,031.7
     International retail operation...........................         474.2                     -
     Finance operation........................................             -                 601.3
                                                                  ----------            ----------
     Total assets.............................................      $4,380.5              $3,633.0
                                                                    ========              ========

     Goodwill and intangible assets by reportable segment were as follows:

                                                                 At November 30        At February 29
     (Amounts in millions)                                            2004                 2004        
     -----------------------------------------------------------------------------  -------------------
     Domestic retail operation................................      $    4.9              $   -
     International retail operation...........................         252.6                  -   
                                                                    --------              --------
     Total goodwill and intangible assets.....................        $257.5              $   -   
                                                                      ======              ========



                                 Page 12 of 28


13.  Supplemental Consolidated Statement of Cash Flows Information

     The following table summarizes  supplemental  cash flow information for the
     nine months ended November 30, 2004.



                                                                                     Nine Months Ended
     (Amounts in thousands)                                                          November 30, 2004    
     -----------------------------------------------------------------------------------------------------
     Supplemental schedule of non-cash investing and financing
       activities:
       Capital lease obligation..................................................      $     2,754
                                                                                       ===========

     Acquisition of InterTAN:
       Fair value of assets acquired:
          Cash and cash equivalents.............................................       $    30,615
          Merchandise inventory.................................................            88,837
          Property and equipment, net...........................................            42,614
          Goodwill..............................................................           186,261
          Other intangible assets...............................................            28,000
          Other assets..........................................................            12,744
                                                                                       -----------
          Total fair value of assets acquired...................................           389,071

       Less:
          Liabilities assumed...................................................            92,638
          Cash acquired.........................................................            30,615
          Stock options issued..................................................             6,498
                                                                                       -----------
       Acquistion of InterTAN, net of cash acquired.............................          $259,320
                                                                                          ========

     Other acquisitions:
       Fair value of assets acquired............................................       $    13,413
       Less: liabilities assumed................................................             4,065
                                                                                       -----------
       Other acquisitions.......................................................       $     9,348
                                                                                       ===========


14.  Foreign Currency Translation

     The local  currency of InterTAN,  the Canadian  dollar,  is its  functional
     currency.  For reporting  purposes,  assets and  liabilities are translated
     into U.S.  dollars using the exchange  rates in effect at the balance sheet
     date,  income  and  expense  items are  translated  using  monthly  average
     exchange  rates.  The  effects of  exchange  rate  changes on net assets of
     InterTAN are recorded in equity as accumulated other comprehensive  income.
     See Note 6 for additional  discussion of other comprehensive  income. Gains
     and losses from  foreign  currency  transactions  are  included in selling,
     general  and  administrative  expenses  in the  consolidated  statement  of
     operations.

15.  Recent Accounting Pronouncements

     In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based
     Payment." SFAS No. 123(R) requires  companies to recognize the compensation
     cost  relating  to  share-based  payment   transactions  in  the  financial
     statements.  SFAS No.  123(R) will be  effective  for the  company's  third
     quarter of fiscal 2006.  The company has not yet  determined  the impact of
     adopting this standard.  See Note 5 for information regarding the company's
     adoption of SFAS No. 123.


                                 Page 13 of 28


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

On May 12, 2004, we acquired a controlling interest in InterTAN, Inc. and on May
19,  2004,  completed  the  acquisition  of 100  percent of the common  stock of
InterTAN for cash  consideration of $259.3 million,  which includes  transaction
costs  and is net of cash  acquired  of $30.6  million.  InterTAN  is a  leading
consumer electronics retailer of both private-label and internationally  branded
products with headquarters in Barrie, Ontario, Canada. InterTAN operates through
retail stores and dealer outlets in Canada under the trade names  RadioShack(R),
Rogers Plus(R) and Battery Plus(R). In addition to enabling us to accelerate the
offering of  private-label  merchandise  to our  customers,  the  acquisition of
InterTAN gives us our first presence in the Canadian market.

On May 25, 2004, we completed the sale of our private-label  finance  operation,
comprised of our  private-label  and co-branded  Visa credit card  programs,  to
Chase  Card  Services,   formerly  Bank  One   Corporation.   Results  from  the
private-label  finance operation,  including transition and transaction costs of
approximately  $6 million related to the sale of the operation,  are included in
finance income.  We also entered into a Consumer  Credit Card Program  Agreement
under which Chase Card Services is offering  private-label and co-branded credit
cards to new and existing customers.  As part of the program agreement,  we plan
to jointly  develop and introduce  new features,  products and services to drive
additional  sales. We are compensated  under the program  primarily based on the
number of new accounts  opened less  promotional  financing  costs that exceed a
negotiated  base  amount.  Chase Card  Services is  obligated  to offer  special
promotional financing terms to our customers. We determine the frequency, volume
and,  subject  to  certain  limits,  the terms of these  promotions.  Chase Card
Services is compensated for these promotions in accordance with a negotiated fee
schedule.  The program  agreement has an initial  seven-year term with automatic
three-year renewals.  The agreement has customary  representations,  warranties,
covenants,  events of default and  termination  rights for an  agreement of this
type. After the sale date, the earnings  contribution from the program agreement
has been  included  in net  sales and  operating  revenues  on the  consolidated
statement of operations. See Note 12 to the consolidated financial statements in
this report for additional  discussion  concerning the sale of the private-label
finance operation.

On November 18, 2003, we completed the sale of our bankcard  finance  operation,
which  included Visa and  MasterCard  credit card  receivables  and related cash
reserves.  Results from the bankcard finance  operation are presented as results
from  discontinued  operations.  See  Note  1 and  Note  2 to  the  consolidated
financial  statements in this report for  additional  discussion  concerning the
sale of the bankcard finance operation.

CRITICAL ACCOUNTING POLICIES

For  a  discussion  of  our  critical  accounting  policies,   see  Management's
Discussion and Analysis of Results of Operations and Financial Condition,  which
is  incorporated  by  reference  in our fiscal 2004 Annual  Report on Form 10-K.
These policies relate to the  calculation of the value of retained  interests in
securitization  transactions,   the  calculation  of  the  liability  for  lease
termination  costs,  accounting  for pension plans,  accounting for  stock-based
compensation  expense  and  accounting  for  cash  consideration  received  from
vendors.

During the first  quarter  of fiscal  2005,  we  recognized  goodwill  and other
intangible  assets  related to our  acquisition  of InterTAN.  We have added the
following critical accounting policy.

Accounting for Goodwill and Other Intangible Assets

We account for goodwill and other intangible assets in accordance with Statement
of  Financial  Accounting  Standards  No. 142,  "Goodwill  and Other  Intangible
Assets." SFAS No. 142 requires that  goodwill and other  intangible  assets with
indefinite  useful lives be evaluated for impairment on an annual basis, or more
frequently if certain events occur or circumstances exist. We evaluated goodwill
and identifiable intangible assets during the second quarter of this fiscal year
and will perform the impairment evaluation annually during the second quarter of
each fiscal  year.  Through the  impairment  test,  goodwill,  other  intangible
assets,  and tangible assets and liabilities are divided among reporting  units.
If the fair value of those reporting units is less than the carrying value, then
the implied fair value of the goodwill of the reporting unit must be compared to
the carrying


                                 Page 14 of 28


value of that  goodwill.  In the instance that the fair value of the goodwill is
less  than  the  carrying  value,  goodwill  is  deemed  to be  impaired  and an
impairment  loss, equal to the excess of the carrying value over the fair value,
must be recorded.

The  performance  of the  goodwill  impairment  test is subject  to  significant
judgment in  determining  the fair value of reporting  units,  the estimation of
future cash flows,  the  estimation of discount  rates,  and other  assumptions.
Changes in these  estimates and assumptions  could have a significant  impact on
the fair value and/or goodwill impairment of each reporting unit.

RESULTS OF OPERATIONS

Our  operations,  in common  with other  retailers  in  general,  are subject to
seasonal  influences.  Historically,  we have realized more of our net sales and
net earnings in the fourth  quarter,  which includes the majority of the holiday
selling  season,  than in any other  fiscal  quarter.  The net  earnings for any
particular   quarter  are  seasonally   disproportionate   to  net  sales  since
administrative and certain operating expenses remain relatively  constant during
the year.  Therefore,  quarterly results should not be relied upon as indicative
of results for the entire fiscal year.


Net Sales and Operating Revenues 

Total sales for the third quarter of fiscal 2005  increased 3.6 percent to $2.49
billion from $2.41 billion in last fiscal  year's third quarter with  comparable
store  merchandise  sales  decreasing 4.3 percent.  Decreases in music and movie
software  sales  accounted  for  approximately  160 basis  points of the overall
comparable  store sales  decline.  A decrease in digital  video  service  sales,
principally  driven by a business model change,  accounted for approximately 120
basis  points of the  overall  comparable  store sales  decrease.  A decrease in
wireless  sales,  principally  driven by a business model change,  accounted for
approximately  90 basis points of the overall  comparable  store sales decrease.
Total sales for this year's third  quarter  include  domestic  segment  sales of
$2.35 billion and international segment sales of $142.0 million. Total sales for
the first nine months of fiscal 2005 increased 6.3 percent to $6.91 billion from
$6.50  billion for the first nine  months of last  fiscal  year with  comparable
store  merchandise  sales  increasing  1.2 percent.  Total sales for this year's
first  nine  months  include   domestic  segment  sales  of  $6.62  billion  and
international  segment sales of $281.4  million.  Comparable  store  merchandise
sales include  merchandise sales from domestic stores that have been open for 12
full calendar months and from all relocated  stores,  as well as  web-originated
merchandise sales.

The  domestic  segment   generates  credit  revenues  from  an  consumer  credit
arrangement under which Chase Card Services offers  private-label and co-branded
credit cards to our customers. Net credit revenues of $1.9 million for the third
quarter  include new account  activation  revenues  of $13.3  million  offset by
promotional  financing cost of $11.5 million.  New account  activation  revenues
exceeded our  expectations,  helping us to build a customer base to which we can
direct specific marketing programs.  However, the cost of promotional  financing
was also higher than anticipated as we responded to more  competitive  financing
offers in the marketplace.  As a result,  third quarter net credit revenues were
approximately $5 million below our initial expectations.  Net credit revenues of
$8.3  million for the first nine months of the current  fiscal year  include new
account  activation  revenues of $24.3 million offset by  promotional  financing
cost of $16.1  million.  We  expect  the  lower-than-anticipated  third  quarter
results will reduce  pretax  credit  revenues  below the $30 million  annualized
level we anticipated when we sold the private-label credit operation.

Neither the arrangement with Chase Card Services nor the  international  segment
was in place last fiscal  year.  Prior to this  year's  second  fiscal  quarter,
private-label and co-branded credit cards were made available through our wholly
owned subsidiary,  First North American National Bank and the related income was
reported as finance income on the  consolidated  statements of  operations.  The
international  segment  consists of the operations of InterTAN,  Inc.,  which we
acquired  in May 2004,  and thus,  comparable  store  merchandise  sales for the
current  fiscal  year's third  quarter and first nine months and total sales for
the same periods of last fiscal year reflect domestic sales only.


                                 Page 15 of 28


Sales by segment for the three and nine months ended  November 30, 2004 and 2003
were as follows.



                                                                     Three Months Ended                Nine Months Ended
                                                                           November 30                   November 30
(Dollar amounts in billions)                                          2004          2003             2004            2003 
------------------------------------------------------------------------------------------        ------------------------
Domestic segment sales.........................................       $2.35         $2.41            $6.62          $6.50
International segment sales....................................        0.14             -             0.28              -
                                                                     --------------------          ----------------------
Net sales and operating revenues...............................       $2.49         $2.41            $6.91          $6.50
                                                                      ===================            ====================

The percent of merchandise  sales represented by each major product category for
the three and nine months  ended  November  30, 2004 and 2003,  is shown  below.
International segment sales are not included in sales by merchandise category.

                                                                 Three Months Ended                Nine Months Ended
                                                                     November 30                      November 30
                                                                2004             2003            2004             2003
--------------------------------------------------------------------------------------         -----------------------
Video.....................................................      43%              42%             42%               40%
Information technology....................................      29               31              33                33
Audio.....................................................      15               13              13                14
Entertainment.............................................      13               14              12                13      
                                                              ----------------------           --------------------------
Total.....................................................     100%            100%             100%              100%
                                                              ======================           ==========================


Comparable  store  sales  for the  third  quarter  in the  video  category  were
relatively  unchanged.  Triple-digit  comparable  store  sales  growth in plasma
displays, double-digit comparable store sales growth of LCD displays and digital
imaging  products  and  single-digit  comparable  store sales  growth in digital
televisions were offset by double-digit declines in tube television,  DVD player
and digital video service  comparable store sales and a single-digit  decline in
camcorder  comparable store sales. During the second quarter, our business model
for digital  satellite  services  changed to substitute  lower hardware cost for
activation revenue.

For the third  quarter,  in the  audio  category,  we  produced  a  single-digit
comparable store sales increase.  Double-digit  comparable store sales growth in
both  portable  audio  products,  driven by digital  audio  products such as MP3
players,  and mobile audio products,  driven  primarily by satellite  radio, was
partially offset by a double-digit  comparable store sales decline in home audio
products.

A single-digit  comparable  store sales decrease in the  information  technology
category  in the third  quarter  reflects  single-digit  comparable  store sales
declines  in both  personal  computer  hardware  and  accessories.  In  personal
computer  hardware,  double-digit  comparable  store  sales  declines in desktop
computers,   monitors  and  printers  were  partially   offset  by  double-digit
comparable store sales growth in notebook  computers.  During the third quarter,
we  launched  Verizon  Wireless  stores  within  more than 570  stores.  Verizon
Wireless operates the stores, and we receive revenue, which is included in total
and comparable store sales, for each new handset activation.  In the past, total
and comparable store sales included sales of wireless  handsets and accessories,
and revenues received for upgrades and new subscribers.

In the entertainment category, we produced a double-digit comparable store sales
decrease,  reflecting  double-digit  comparable  store  sales  declines in video
software and music software and a single-digit comparable store sales decline in
game products, for the third quarter.


The following table provides the numbers of our domestic segment stores:



                                                         Nov. 30, 2004        Feb. 29, 2004       Nov. 30, 2003
------------------------------------------------------------------------      --------------       ------------
Superstores.......................................            622                  599                  618
Mall-based stores.................................              5                    5                    5
                                                             ----                 ----                 ----
Total domestic segment stores.....................            627                  604                  623
                                                             ====                 ====                 ====



                                 Page 16 of 28


In the third quarter of fiscal 2005, we opened 18  Superstores,  fully remodeled
one store and relocated a total of 12 Superstores.  For the first nine months of
fiscal 2005, we opened 22 new  Superstores,  fully  remodeled one Superstore and
relocated  22  Superstores,  of which one  Superstore  was a  replacement  for a
Superstore  we closed in late  fiscal  2004.  We  currently  expect to  relocate
approximately  seven more  Superstores  and open another nine new Superstores in
the fourth quarter of the current fiscal year.

The following  table  provides the numbers of  international  segment stores and
dealer outlets:

                                                       November 30, 2004
------------------------------------------------------------------------
Company-operated stores...........................            518
Dealer outlets....................................            394
Rogers Wireless stores............................             87
Battery Plus stores...............................             27
                                                           ------
Total international segment stores................          1,026
                                                          =======

Company-operated  stores  operate  under the  trade  name  "RadioShack."  Dealer
outlets are  independent  retail  businesses  that operate under their own trade
names  but are  permitted,  under  dealer  agreements,  to  purchase  any of the
products sold by company-operated  stores.  Rogers Wireless stores are dedicated
primarily to the sale of wireless services,  including related hardware, offered
by  Rogers  Wireless,  Inc.  Battery  Plus  stores  retail  batteries  and other
specialty consumer electronics products.

Our domestic  retail  operation  sells extended  warranty  programs on behalf of
unrelated third parties that are the primary obligors. Because the third parties
are the primary  obligors  under  these  contracts,  commission  revenue for the
unrelated-third-party extended warranty plans is recognized at the time of sale.
For  our  domestic  retail  operation  segment,   the  total  extended  warranty
commission revenue included in total sales was $91.0 million,  or 3.9 percent of
domestic retail sales, in the third quarter of fiscal 2005,  compared with $75.4
million,  or 3.1 percent of sales,  in last fiscal  year's  third  quarter.  The
domestic extended warranty commission revenue included in total sales was $260.0
million,  or 3.9 percent of domestic  retail sales,  in the first nine months of
fiscal 2005, compared with $225.6 million, or 3.5 percent of sales, in the first
nine months of last fiscal year.  We believe that the increase  primarily is due
to better store-level execution. For our international retail operation segment,
we are the primary  obligor for our  extended  warranty  programs.  Accordingly,
extended warranty revenue is deferred at point of sale and recognized as revenue
over the life of the contract and was  immaterial  for the three and nine months
ended November 30, 2004.

Gross Profit Margin

For the third  quarter of fiscal 2005,  the gross profit margin was 25.1 percent
of sales,  compared  with 22.2 percent in the same period last fiscal year.  The
inclusion of the international  segment's revenues and cost of sales, buying and
warehousing  contributed  87 basis  points to this year's  third  quarter  gross
profit margin.  The increase in the gross profit margin of our domestic  segment
of 207 basis points reflects
o     an  improvement  in  merchandise  gross  profit  margins,  
o     an increase in extended warranty sales and
o     continued   increases  in  the  efficiency  of  our  product  service  and
      distribution operations.

The inclusion of net credit revenues in net sales and operating  revenues had an
immaterial impact on the third quarter gross profit margin.

For the first  nine  months of fiscal  2005,  the gross  profit  margin was 24.4
percent of sales,  compared  with 22.6  percent  for the same period last fiscal
year. The inclusion of the international  segment's  revenues and cost of sales,
buying and  warehousing  contributed  64 basis points to the gross profit margin
for the first nine  months of fiscal  2005.  The  increase  in the gross  profit
margin of our domestic  segment of 113 basis points for the first nine months of
fiscal 2005 reflects
o     continued   increases  in  the  efficiency  of  our  product  service  and
      distribution  operations and 
o     an increase in extended warranty commission sales.


                                 Page 17 of 28


The inclusion of net credit revenues in net sales and operating  revenues had an
immaterial impact on the gross profit margin for the first nine months of fiscal
2005.

Finance Income

We completed the sale of our private-label  finance operation,  comprised of our
private-label  and co-branded Visa credit card programs,  to Chase Card Services
on May 25, 2004.  Results from the  private-label  finance operation through the
date of the sale, including transition and transaction costs of approximately $6
million  related to the sale of the operation,  are included in finance  income.
See Note 1 and Note 12 to the consolidated  financial  statements in this report
for  additional  discussion  concerning  the sale of our  private-label  finance
operation.

For the three and nine months ended  November 30, 2004 and 2003,  the components
of pretax finance income were as follows:



                                                                       Three Months Ended                   Nine Months Ended
                                                                           November 30                         November 30
(Amounts in millions)                                                 2004            2003               2004              2003
--------------------------------------------------------------------------------------------             ----------------------
Securitization income...........................................     $  -             $25.3               $28.1             $83.0
Less: Payroll and fringe benefit expenses.......................        -               7.0                 7.6              22.6
        Other direct expenses...................................        -              12.7                14.9              38.0
                                                                     ----------------------              ------------------------
Finance income..................................................     $  -             $ 5.6                $5.6             $22.4
                                                                     ======================               ========================

Securitization  income  primarily  is  comprised  of the  gain  on the  sale  of
receivables  generated  by our  private-label  finance  operation,  income  from
retained  interests  in the  credit  card  receivables  and  income  related  to
servicing  the  receivables,  as well as the impact of increases or decreases in
the fair value of the retained  interests.  Securitization  income is reduced by
payroll, fringe benefits and other costs directly associated with the management
and securitization of the private-label receivables.

Selling, General and Administrative Expenses

                                                 Three Months Ended November 30                Nine Months Ended November 30
                                                 2004                 2003                     2004                   2003
                                                      % of                    % of                     % of                  % of
(Dollar amounts in millions)                 $(a)     Sales          $        Sales        $(b)        Sales        $         Sales 
------------------------------------------------------------------------------------   ---------------------------------------------
Store expenses..........................     $557.4   22.3%        $520.0     21.6%       $1,529.7     22.1%     $1,443.3     22.2%
General and administrative
     expenses...........................       52.2    2.1           39.1      1.6           136.5      2.0         117.4      1.8
Remodel expenses........................        0.2      -            0.3        -             0.3        -          29.8      0.5
Relocation expenses.....................       14.9    0.6            9.8      0.4            33.3      0.5          18.9      0.3
Pre-opening expenses....................        7.5    0.3            4.2      0.2            12.0      0.2           7.3      0.1
Interest income.........................       (3.4)  (0.1)          (1.2)       -            (8.8)    (0.1)         (5.3)    (0.1) 
                                          ------------------------------------------   ---------------------------------------------
Total  .................................     $628.8   25.2%        $572.2     23.8%       $1,703.0     24.7%     $1,611.4     24.8%
                                          =========================================    ============================================

(a) Includes  international  segment store expenses of $38.2 million and general
and administrative expenses of $8.4 million.
(b) Includes  international  segment store expenses of $76.8 million and general
and administrative expenses of $18.0 million.


Selling, general and administrative expenses were 25.2 percent of total sales in
the third quarter of this fiscal year, compared with 23.8 percent of total sales
in the same period  last year.  The  inclusion  of the  international  segment's
revenues and selling,  general and administrative expenses increased this year's
third quarter expense-to-sales ratio by 46 basis points.

Our domestic segment's expense-to-sales ratio rose 99 basis points. The increase
was driven by
o     the impact of the domestic total sales decrease;


                                 Page 18 of 28


o     an increase of approximately 40 basis points in advertising expense, which
      reflects the launch of our new branding campaign in October; and
o     an increase of  approximately  20 basis points in  relocation  and remodel
      costs.

Selling,  general and  administrative  expenses were 24.7 percent of total sales
for the first nine months of fiscal  2005,  compared  with 24.8 percent of total
sales in the same period last year. The inclusion of the international segment's
revenues  and  selling,   general  and  administrative  expenses  increased  the
expense-to-sales  ratio by 38 basis  points for the first nine  months of fiscal
2005.

During  the  first  nine  months  of  fiscal  2005,   our   domestic   segment's
expense-to-sales ratio declined 52 basis points. The improvement in our domestic
segment's ratio was primarily  driven by 
o     a reduction of  approximately  45 basis points in rent and occupancy costs
      as a percent of sales, largely driven by the closure of 19 underperforming
      stores in February 2004;
o     a reduction of  approximately  25 basis points in  relocation  and remodel
      expenses as a percent of sales,  which reflects the large number of stores
      that were refixtured in last year's second quarter; and
o     a reduction of approximately 20 basis points in payroll and fringe benefit
      costs as a percent of sales.

These  improvements  were partially  offset by an increase of  approximately  25
basis points in advertising  expenses as a percent of sales,  which reflects the
launch of our new branding campaign in October 2004.

Income Taxes

The estimated  effective  income tax rate  applicable to results from continuing
operations for our domestic retail operation segment for fiscal 2005 is expected
to be 36.7  percent.  The  estimated  effective  income tax rate  applicable  to
results  from  continuing  operations  for our  international  retail  operation
segment  for  fiscal  2005 is  expected  to be 38.5  percent.  The  consolidated
effective income tax rate applicable to results from continuing  operations will
be the weighted average of our segments' rates.

Net Loss from Continuing Operations 

The net loss from continuing  operations was $5.9 million, or 3 cents per share,
in the third  quarter ended  November 30, 2004,  compared with the net loss from
continuing  operations  of $28.1  million,  or 14 cents per share,  in the third
quarter of last fiscal year. The  international  segment's  results  reduced the
fiscal 2005 third quarter net loss from  continuing  operations by $5.5 million,
or 3 cents per share.

For the nine  months  ended  November  30,  2004,  the net loss from  continuing
operations was $22.6 million, or 12 cents per share,  compared with the net loss
from continuing operations of $95.5 million, or 46 cents per share, for the same
period last fiscal year. The  international  segment's  results  reduced the net
loss from continuing operations for the first nine months of fiscal 2005 by $9.2
million, or 5 cents per share.

Net Earnings (Loss) from Discontinued Operations

On November 18, 2003, we completed the sale of our bankcard finance operation to
FleetBoston Financial. Results from the bankcard finance operation are presented
as  results  from  discontinued  operations.   The  sale  agreement  included  a
transition  services  agreement under which  employees of our finance  operation
continued  to service  the  bankcard  accounts  until  final  conversion  of the
bankcard portfolio to FleetBoston, which occurred on April 2, 2004. Through that
date,  FleetBoston  reimbursed  us  for  operating  costs  incurred  during  the
transition  period.  We  incurred  severance  costs  ratably  through  the final
conversion date.

The net earnings  from  discontinued  operations  totaled  $25.5 million for the
three months ended November 30, 2003. The total is comprised of $24.0 million of
after-tax  earnings from the  discontinued  bankcard  operation and $1.5 million
from the  discontinued  Divx  operation  due to a $2.3 million  reduction in the
provision for commitments under licensing agreements.  For the nine months ended
November 30, 2004, the after-tax net loss from discontinued  operations  totaled
$1.2 million, which is comprised of post-closing adjustments related to the sale
of the bankcard  operation.  The net loss from  discontinued  operations for the
nine months ended


                                 Page 19 of 28


November 30, 2003,  was $83.4  million and is comprised of an after-tax net loss
of $84.9 million from the discontinued bankcard operation and after-tax earnings
of $1.5 million from the discontinued Divx operation.

Operations Outlook

Our  attention  is focused  on  building  value for  shareholders  by  providing
superior consumer electronics  solutions to families.  We remain focused on four
basic areas: 1) driving store revenue growth, 2) growing Web-based revenues,  3)
stabilizing  gross  profit  margins and 4) bringing our overall cost and expense
structure  in line with our current  level of  revenues.  We believe we have the
right plan in place to combine  profitable revenue growth with improved in-store
execution, and we have the resources to execute that plan.

Growing  domestic store  revenues  requires a focused team effort among numerous
functions  including  store  operations,  merchandising,  Circuit  City  Direct,
marketing,  real estate and  finance.  An important  component of driving  sales
growth is the ongoing store  revitalization plan, which incorporates opening new
locations in vibrant trade areas,  relocating  stores to better locations within
existing  trade areas and, to a lesser  extent,  improving  the  performance  of
existing stores through remodeling  activities  designed to improve the shopping
experience.

From the beginning of fiscal 2001 through November 30, 2004, 176 Superstores, or
28  percent  of our  622  domestic  Superstores,  had  been  newly  constructed,
relocated or fully remodeled to provide a contemporary  shopping experience with
easy product  access and more powerful  merchandising  displays.  We expect that
ratio to reach approximately 30 percent by the end of this fiscal year.

To provide enhanced  information  regarding the performance of our relocated and
incremental  stores,  we are introducing  return on invested capital  reporting.
Beginning  in  fiscal  2006,  return  on  invested  capital  will  be  the  sole
statistical  performance  measure  reported for our  relocated  and  incremental
stores.

Relocated  Stores.  At the end of the third quarter,  we had 39 relocated stores
that have been open for more than six  months.  In their  first  full six months
following grand opening, these 39 stores have
o     an average  sales  changes that was  approximately  31  percentage  points
      better than the sales pace of the  remainder  of the store base during the
      same time periods and
o     an internal rate of return of approximately 17 percent.

The 27 relocated  stores open more than 12 months have  produced  the  following
results for their 12-month periods after grand opening:
o     an average sales change that was approximately 27 percentage points better
      than the sales pace of the  remainder  of the store  base  during the same
      time periods;
o     a return on invested capital of approximately 11 percent; and
o     a return on invested capital,  excluding sublease costs on vacated stores,
      of approximately 19 percent.

Incremental Stores. Since initiation of the revitalization  program, the company
has opened 71 incremental  stores. For the measured periods,  incremental stores
have produced the following results:
o     a return on invested  capital of  approximately 14 percent measured at the
      end of the first full year after grand opening for the 42 stores that have
      been open for more than 12 months and
o     a return on invested  capital of  approximately 19 percent measured at the
      end of the first two full years after grand opening for the 36 stores that
      have been more than 24 months.

We continue to  anticipate  that,  as we add stores to the  relocation  base and
incremental  store base,  the average  results from  relocated  and  incremental
stores will vary.

Fiscal 2006 Domestic Store Opening Plan. For the year ending  February 28, 2006,
we expect to open 30 to 40 domestic stores, of which  approximately half will be
relocations.  We  expect to open five of the  stores  in the first  quarter.  We
anticipate  that  capital  expenditures,  net  of  sale  leasebacks  and  tenant
improvement  allowances,  for our domestic and  international  segments combined
will total approximately $150 million in


                                 Page 20 of 28


fiscal 2006 and that expenses  related to domestic store  relocations will total
approximately $28 million in fiscal 2006.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting  Standards Board issued SFAS No. 123
(revised 2004),  "Share-Based  Payment." SFAS No. 123(R)  requires  companies to
recognize the compensation cost relating to share-based payment  transactions in
the  financial  statements.  SFAS No.  123(R)  will be  effective  for our third
quarter of fiscal 2006. We have not yet  determined  the impact of adopting this
standard.

FINANCIAL CONDITION

Liquidity and Capital Resources

At  November  30,  2004,  we had cash and cash  equivalents  of $752.5  million,
compared  with  $783.5  million at February  29,  2004.  The lower cash  balance
primarily reflects acquisition costs for InterTAN of $259.3 million, net of cash
acquired,  offset by net cash  proceeds of $470.0  million  from the sale of the
private-label finance operation. During the first nine months of fiscal 2005, we
also used  $210.1  million of cash to  repurchase  common  stock under our stock
repurchase authorization.

At November 30, 2003, we had cash and cash  equivalents of $455.3  million.  The
year-over-year change in the cash balance largely reflects the net cash proceeds
of $470.0  million from the sale of the  private-label  finance  operation and a
$338.8  million  reduction in domestic  inventory,  partly offset by acquisition
costs for InterTAN of $259.3 million, net of cash acquired. Since the end of the
third  quarter of fiscal 2004 through  November  30,  2004,  we also used $280.5
million  of  cash  to  repurchase   common  stock  under  our  stock  repurchase
authorization.

Operating  Activities.  For the nine months ended  November  30, 2004,  net cash
provided by operating activities was $90.6 million,  compared with net cash used
in operating activities of $546.7 million for the nine months ended November 30,
2003. The increase in net cash provided by operating activities is primarily due
to changes  in  merchandise  inventory  net of  accounts  payable  and  retained
interests in securitized receivables.

Merchandise  inventory  increased by $832.1  million in the first nine months of
fiscal 2005, compared with an increase of $1.24 billion in the first nine months
of last fiscal  year.  The change in  inventory  begins to reflect an  increased
focus on working  capital  management,  by more  closely  matching the timing of
merchandise  receipt into  distribution  centers and  deployment  to stores with
expected sales levels, and selectively  adjusting merchandise display quantities
in some stores to reflect those individual store's sales.

Retained interests in securitized  receivables decreased by $32.9 million in the
first nine months of fiscal 2005,  compared with an increase of $98.7 million in
the first nine months of last fiscal year. The current year decrease  relates to
the  sale of the  private-label  finance  operation.  The  prior  year  increase
reflects  the   completion   of  a  $500  million   private-label   credit  card
securitization transaction to replace a maturing term securitization. During the
third quarter of last fiscal year,  we replaced a maturing  term  securitization
with a variable funding program.

Investing  Activities.  For the nine months ended  November  30, 2004,  net cash
provided by investing  activities was $85.9 million  compared with net cash used
in investing activities of $113.0 million for the nine months ended November 30,
2003. The increase in net cash provided by investing activities is primarily due
to cash proceeds of $475.9  million from the sale of the  private-label  finance
operation offset by net acquisition costs for InterTAN of $259.3 million.

During the first nine months of fiscal  2005,  we opened 44 of a planned for the
year total of approximately 60 domestic Superstores, of which slightly less than
half will be relocations.  We anticipate that capital expenditures,  net of sale
leasebacks and tenant improvement allowances, for our domestic and international
segments  combined will total  approximately  $165 million this fiscal year, and
will include approximately:


                                 Page 21 of 28


o     $35 million related to domestic store openings,
o     $60 million related to domestic relocations,  one remodel and store resets
      to incorporate the new Verizon features and Cool Gadgets,
o     $60 million related to other items such as management  information systems
      and the international segment, and
o     $10 million for real estate purchases.

We  anticipate  that  expenses  related to domestic  store  relocations  and one
remodel will total approximately $41 million this fiscal year. Through the first
nine months,  we incurred 81 percent of the  anticipated  remodel and relocation
expenses.

We remain committed to revitalizing our store base, but we also are committed to
only accepting sites that meet our rigorous standards. In fiscal 2006, we expect
to open 30 to 40  domestic  Superstores,  of which  approximately  half  will be
relocations. We expect to open five of the stores in the first quarter of fiscal
2006. We anticipate that capital expenditures, net of sale leasebacks and tenant
improvement  allowances,  for its domestic and  international  segments combined
will total  approximately  $150 million in fiscal 2006 and that expenses related
to domestic store  relocations  will total  approximately  $28 million in fiscal
2006.

Financing Activities. For the nine months ended November 30, 2004, net cash used
in  financing  activities  was $204.6  million,  compared  with net cash used in
financing  activities  of $16.3  million for the nine months ended  November 30,
2003. The change  primarily  reflects  $210.1 million used to repurchase  common
stock  during the first nine  months of this  fiscal  year  compared  with $13.9
million used during the same period last fiscal year.  Based on the market value
of the common stock at November 30, 2004, the remaining  $105.6 million,  of the
$400  million  total  stock  repurchase  authorization,   would  allow  for  the
repurchase of up to  approximately  4 percent of the 191.2  million  shares then
outstanding.

We have a $500 million  revolving credit facility secured by inventory.  On July
8, 2004, the credit agreement was amended to include InterTAN as a borrower. The
amended  credit  agreement  established a $400 million  borrowing  limit for our
domestic  retail   operation  and  a  $100  million   borrowing  limit  for  our
international retail operation.  At November 30, 2004,  short-term borrowings on
this  facility  were $12.6  million  related to our  international  segment  and
outstanding  letters of credit  related  to this  facility  were $70.0  million,
leaving $417.4 million  available for borrowing.  We were in compliance with all
covenants under this facility at November 30, 2004.

We  expect  that  available  cash  resources,   our  existing  credit  facility,
sale-leaseback  transactions,  landlord  reimbursements  and cash  generated  by
operations will be sufficient to fund capital  expenditures  and working capital
for the foreseeable future.

FORWARD-LOOKING STATEMENTS

The provisions of the Private  Securities  Litigation Reform Act of 1995 provide
companies  with a "safe  harbor" when making  forward-looking  statements.  This
"safe harbor"  encourages  companies to provide  prospective  information  about
their  companies  without fear of  litigation.  We wish to take advantage of the
"safe harbor"  provisions  of the Act. Our  statements  that are not  historical
facts, including statements about management's  expectations for fiscal 2005 and
beyond,   are   forward-looking   statements  and  involve   various  risks  and
uncertainties.

Forward-looking statements are estimates and projections reflecting our judgment
and involve a number of risks and uncertainties  that could cause actual results
to differ  materially  from those suggested by the  forward-looking  statements.
Although  we  believe  that  the  estimates  and  projections  reflected  in the
forward-looking  statements are  reasonable,  our  expectations  may prove to be
incorrect. The retail industry, and the specialty retail industry in particular,
are dynamic by nature and have  undergone  significant  changes in recent years.
Our ability to anticipate and successfully respond to the continuing  challenges
of our industry is key to achieving  our  expectations.  Important  factors that
could cause actual  results to differ  materially  from estimates or projections
contained in our forward-looking statements include


                                 Page 22 of 28


o     changes  in the  amount and  degree of  promotional  intensity  exerted by
      current  competitors and potential new competition from competitors  using
      either similar or alternative  methods or channels of distribution such as
      online and telephone shopping services and mail order;
o     changes in general  economic  conditions  including,  but not  limited to,
      consumer  credit  availability,   interest  rates,   inflation,   personal
      discretionary spending levels, trends in consumer retail spending, both in
      general and in our product  categories,  and consumer  sentiment about the
      economy in general;
o     the  presence or absence of, or consumer  acceptance  of, new  products or
      product features in the merchandise  categories we sell and changes in our
      merchandise sales mix;
o     significant changes in retail prices for products we sell;
o     changes in  availability  or cost of  financing  for  working  capital and
      capital  expenditures,  including  financing to support development of our
      business;
o     lack of availability or access to sources of inventory;
o     the  impact of  inventory  and  supply  chain  management  initiatives  on
      inventory levels and profitability;
o     inability to liquidate excess inventory should excess inventory develop;
o     failure to  successfully  implement  sales and  profitability  improvement
      programs  for  our  Circuit   City   Superstores,   including   our  store
      revitalization plan;
o     our ability to continue to generate  strong sales  growth  through our Web
      site;
o     availability of appropriate  real estate locations for relocations and new
      stores;
o     the cost and timeliness of new store openings and relocations;
o     consumer  reaction to new store  locations and changes in our store design
      and merchandise;
o     our  ability  and the  ability  of Chase  Card  Services  to  successfully
      integrate  our retail  business  with the third party  credit card program
      being offered by Chase Card Services;
o     the extent to which customers respond to promotional  financing offers and
      the types of promotional terms the company offers;
o     future  levels of sales  activity  and the  acceptance  of the Chase  Card
      Services  third  party  credit  program,  including  the  related  rewards
      component, by consumers on an ongoing basis;
o     our ability to attract and retain an effective  management team or changes
      in the costs or  availability  of a  suitable  work  force to  manage  and
      support our service-driven operating strategies;
o     changes in production or distribution  costs or costs of materials for our
      advertising;
o     effectiveness of the company's brand awareness and marketing programs;
o     successful implementation of our customer service initiatives;
o     the imposition of new  restrictions  or regulations  regarding the sale of
      products  and/or  services we sell,  changes in tax rules and  regulations
      applicable to us or our competitors,  the imposition of new  environmental
      restrictions,  regulations  or  laws  or the  discovery  of  environmental
      conditions at current or future  locations,  or any failure to comply with
      such laws or any adverse change in such laws;
o     our ability to integrate and operate InterTAN  successfully and to realize
      the  anticipated  benefits  of  the  transaction,  including  successfully
      introducing  InterTAN's products in our domestic Superstores and realizing
      inventory purchasing synergies;
o     timely  production and delivery of private-label  merchandise and level of
      consumer demand for those products;
o     reduced investment returns in our pension plan;
o     changes in our anticipated cash flow;
o     adverse results in significant  litigation matters,  including the outcome
      and impact on InterTAN of litigation instituted by RadioShack  Corporation
      to terminate  InterTAN's right to use the RadioShack(R) name in Canada and
      related rights to purchase merchandise through RadioShack;
o     currency exchange rate fluctuations  between Canadian and U.S. dollars and
      other currencies; and
o     the regulatory and trade environment in the U.S. and Canada.

We  believe  our  forward-looking  statements  are  reasonable;  however,  undue
reliance should not be placed on forward-looking statements,  which are based on
current expectations.


                                 Page 23 of 28


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of the  acquisition of InterTAN,  we are exposed to market risk from
potential changes in the U.S./Canadian currency exchange rates as they relate to
inventory purchases and the translation of InterTAN's financial results.

Inventory Purchases

A portion of  InterTAN's  purchases are from vendors  requiring  payment in U.S.
dollars. Accordingly,  there is risk that the value of the Canadian dollar could
fluctuate  relative to the U.S. dollar from the time the goods are ordered until
payment is made.  InterTAN's  management  monitors  the  foreign  exchange  risk
associated  with its U.S. dollar open orders on a regular basis by reviewing the
amount of such open  orders,  exchange  rates,  including  forecasts  from major
financial  institutions,  local news and other economic factors. At November 30,
2004, U.S. dollar open purchase orders totaled approximately $18.8 million. A 10
percent  decline in the value of the Canadian dollar would result in an increase
in product cost of approximately  $1.9 million for those orders. The incremental
cost of such a decline in currency  values,  if incurred,  would be reflected in
higher cost of sales in future periods. In these circumstances, management would
take product-pricing action, where appropriate.

Translation of Financial Results

Fluctuations  in the  value  of the  Canadian  dollar  have a direct  effect  on
reported  consolidated  results due to the  acquisition  of InterTAN.  We do not
hedge against the possible  impact of this risk. A 10 percent  adverse change in
the foreign  currency  exchange rate would not have a significant  impact on our
results of operations or financial position.

ITEM 4.  CONTROLS AND PROCEDURES

Under the supervision and with the  participation  of the company's  management,
including the chief executive officer and chief financial  officer,  the company
has evaluated the effectiveness of its "disclosure  controls and procedures," as
that term is defined in Rule 13a-15(e) of the  Securities  Exchange Act of 1934,
as amended, as of the end of the period covered by this Quarterly Report on Form
10-Q.  Based  upon  their  evaluation,  the chief  executive  officer  and chief
financial  officer  concluded  that  the  company's   disclosure   controls  and
procedures  are  effective.  There  were no changes  in the  company's  internal
control over financial  reporting in the quarter ended  November 30, 2004,  that
have materially  affected,  or are reasonably likely to materially  affect,  the
company's internal control over financial reporting.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On March 31, 2004,  Circuit City announced a public tender offer to purchase the
stock of InterTAN.  Circuit City completed the acquisition and InterTAN became a
wholly owned  subsidiary  of Circuit City on May 19, 2004.  Among other  things,
InterTAN  operates retail consumer  electronics  outlets under the RadioShack(R)
name in Canada  under a licensing  agreement  with a  subsidiary  of  RadioShack
Corporation.  InterTAN also operates under two other  agreements with RadioShack
and  its  subsidiaries   ("RadioShack"):   a  merchandising   agreement  and  an
advertising agreement.

After the March 31, 2004 announcement,  RadioShack asserted early termination of
all three  agreements  under a variety of theories  and on a variety of proposed
termination dates.  RadioShack asserts that InterTAN failed to pay an annual fee
in material  breach of the  advertising  agreement  and,  alternatively,  that a
"without cause" termination of the advertising agreement triggers termination of
the other agreements.

On April 5, 2004,  RadioShack  filed suit  against  InterTAN in Tarrant  County,
Texas,  and amended that suit on April 27, 2004 (the  "RadioShack  litigation").
InterTAN disputes the various termination scenarios alleged by


                                 Page 24 of 28


RadioShack and is vigorously  defending  against those claims.  On May 11, 2004,
InterTAN  asserted a  counterclaim  seeking a  declaration  under  U.S.  federal
trademark law that the use of the RadioShack  marks is proper.  Circuit City was
added as a necessary  party to that litigation and removed the matter to Federal
Court in the Northern District of Texas. On May 12, 2004, Circuit City filed its
own  suit  in  Federal  Court  in the  Northern  District  of  Texas  seeking  a
declaration under U.S. federal trademark law that the use of the marks in Canada
is proper (the "Circuit City  litigation").  InterTAN has cross-claimed  against
RadioShack   based  on  federal   trademark   law  and   remedies  for  business
disparagement.  On December 9, 2004,  the federal court  remanded the RadioShack
litigation  back to the Texas state court.  On December  14,  2004,  the federal
court granted RadioShack's motion to dismiss the Circuit City litigation and the
related InterTAN cross-claims.

Circuit City believes that  RadioShack is not entitled to early  termination  of
the  agreements  and that InterTAN has  substantial  defenses to the  RadioShack
claims.  Circuit City and InterTAN  intend to  vigorously  pursue all claims and
defend the claims in the RadioShack litigation.  Circuit City believes that this
litigation  will not have a material  adverse effect on the company's  financial
condition or results of operations.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about common stock repurchases by or on
behalf of the company during the quarter ended November 30, 2004:




                                                                                                                      Maximum Dollar
                                                                                                  Total Number         Value of
                                                                                                   of Shares           Shares that 
                                                                                   Average        Purchased as           May Yet Be
                                                           Total Number             Price        Part of Publicly        Purchased
                                                            of Shares               Paid             Announced         Under the
(Amounts in millions except per share data)                  Purchased            per Share           Program             Program*
----------------------------------------------------------------------------------------------------------------------------------
September 1 - September 30, 2004....................             -                 $    -                  -               $175.0
October 1 - October 31, 2004........................           4.5                 $15.43                4.5               $105.6
November 1 - November 30, 2004......................             -                 $    -                  -               $105.6
                                                               ---                                      ----
Total Fiscal 2005 Third Quarter.....................           4.5                 $15.43                4.5
                                                               ===                                       ===

*In January 2003, the company  announced that the board of directors  authorized
the repurchase of up to $200 million of common stock.  In June 2004, the company
announced a $200 million increase in its stock repurchase authorization, raising
the total repurchase capacity to $400 million. There is no expiration date under
either authorization.


ITEM 6.  EXHIBITS

      3.1      Amended and Restated  Articles of  Incorporation  of the company,
               effective  February 3, 1997, as amended  through October 1, 2002,
               filed as Exhibit 3(i) to the company's  Quarterly  Report on Form
               10-Q for the quarter ended  November 30, 2002 (File No.  1-5767),
               are expressly incorporated herein by this reference.

      3.2      Bylaws of the  company,  as amended and  restated  June 17, 2003,
               filed as  Exhibit 3 (iii) to the  company's  Quarterly  Report on
               Form 10-Q for the quarter  ended May 31, 2003 (File No.  1-5767),
               are expressly incorporated herein by this reference.

      4.1      Third Amended and Restated Rights Agreement,  dated as of October
               1, 2002,  between the  company  and Wells  Fargo Bank  Minnesota,
               N.A., as Rights Agent,  filed as Exhibit 1 to the company's  Form
               8-A/A filed on October 1, 2002 (File No.  1-5767),  is  expressly
               incorporated herein by this reference.

      10.1     Circuit City Stores,  Inc. Benefit  Restoration  Plan, As Amended
               and Restated  Effective  February 28, 2005, filed as Exhibit 10.1
               to the  company's  Form  8-K  filed on  October  29,  2004  (File
               1-5767), is expressly incorporated herein by this reference.*
 

                                 Page 25 of 28


      10.2     Circuit City Stores,  Inc.  Supplemental  401(k) Plan,  Effective
               March 1, 2005,  filed as Exhibit 10.2 to the  company's  Form 8-K
               filed  on  October  29,   2004  (File   1-5767),   is   expressly
               incorporated herein by this reference.*

      10.3     Circuit City Stores,  Inc. Executive Deferred  Compensation Plan,
               as Amended and  Restated,  Effective  December  31,  2004,  filed
               herewith.*

      10.4     First Amendment to Amended and Restated Credit Agreement dated as
               of November 17, 2004,  among  Circuit City Stores,  Inc., as Lead
               Borrower for the  Borrowers,  the Borrowers  party  thereto,  the
               Lenders party thereto, and as Administrative Agent and Collateral
               Agent for the Lenders, filed herewith.*

      10.5     Employment agreement between the company and Philip J. Schoonover
               effective October 4, 2004, filed as Exhibit 10.1 to the company's
               Form 8-K filed on  October 4, 2004 (File  1-5767),  is  expressly
               incorporated herein by this reference.*

      31.1     Rule   13a-14(a)/15d-14(a)   Certification   of  CEO  under  Rule
               13a-14(a) of the Securities Exchange Act of 1934, filed herewith.

      31.2     Rule   13a-14(a)/15d-14(a)   Certification   of  CFO  under  Rule
               13a-14(a) of the Securities Exchange Act of 1934, filed herewith.

      32.1     Section  1350  Certification  of  CEO  under  Section  906 of the
               Sarbanes-Oxley Act of 2002, filed herewith.

      32.2     Section  1350  Certification  of  CFO  under  Section  906 of the
               Sarbanes-Oxley Act of 2002, filed herewith.


      *        Indicates   management    contracts,    compensatory   plans   or
               arrangements of the company required to be filed as an exhibit.


                                 Page 26 of 28


                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the company
has duly  caused  this  report  to be signed  on its  behalf by the  undersigned
thereunto duly authorized.


                                                 CIRCUIT CITY STORES, INC.
                                                 (Registrant)



                                By:   /s/ W. Alan McCollough  
                                      ------------------------
                                      W. Alan McCollough
                                      Chairman, President and
                                      Chief Executive Officer



                                By:   /s/ Michael E. Foss     
                                      ------------------------
                                     Michael E. Foss
                                     Senior Vice President and
                                     Chief Financial Officer
  


                                By:   /s/ Philip J. Dunn                    
                                      --------------------------------------
                                      Philip J. Dunn
                                      Senior Vice President, Treasurer,
                                      Corporate Controller and
                                      Chief Accounting Officer





January 7, 2005


                                 Page 27 of 28


                                  EXHIBIT INDEX

3.1     Amended and Restated Articles of Incorporation of the company, effective
        February 3, 1997, as amended through  October 1, 2002,  filed as Exhibit
        3(i) to the  company's  Quarterly  Report on Form  10-Q for the  quarter
        ended November 30, 2002 (File No.  1-5767),  are expressly  incorporated
        herein by this reference.

3.2     Bylaws of the company,  as amended and restated June 17, 2003,  filed as
        Exhibit 3 (iii) to the company's  Quarterly  Report on Form 10-Q for the
        quarter ended May 31, 2003 (File No. 1-5767), are expressly incorporated
        herein by this reference.

4.1     Third  Amended and  Restated  Rights  Agreement,  dated as of October 1,
        2002,  between  the company and Wells  Fargo Bank  Minnesota,  N.A.,  as
        Rights Agent,  filed as Exhibit 1 to the  company's  Form 8-A/A filed on
        October 1, 2002 (File No. 1-5767),  is expressly  incorporated herein by
        this reference.

10.1    Circuit City  Stores,  Inc.  Benefit  Restoration  Plan,  As Amended and
        Restated  Effective  February  28,  2005,  filed as Exhibit  10.1 to the
        company's Form 8-K filed on October 29, 2004 (File 1-5767), is expressly
        incorporated herein by this reference.*

10.2    Circuit City Stores, Inc.  Supplemental 401(k) Plan,  Effective March 1,
        2005,  filed as Exhibit 10.2 to the company's  Form 8-K filed on October
        29,  2004  (File  1-5767),  is  expressly  incorporated  herein  by this
        reference.*

10.3    Circuit City Stores,  Inc.  Executive  Deferred  Compensation  Plan,  as
        Amended and Restated, Effective December 31, 2004, filed herewith.*

10.4    First  Amendment to Amended and Restated  Credit  Agreement  dated as of
        November 17, 2004, among Circuit City Stores, Inc., as Lead Borrower for
        the Borrowers,  the Borrowers party thereto,  the Lenders party thereto,
        and as Administrative Agent and Collateral Agent for the Lenders,  filed
        herewith.*

10.5    Employment  agreement  between  the  company  and  Philip J.  Schoonover
        effective  October 4, 2004,  filed as Exhibit 10.1 to the company's Form
        8-K filed on October 4, 2004 (File  1-5767),  is expressly  incorporated
        herein by this reference.*

31.1    Rule  13a-14(a)/15d-14(a)  Certification  of CEO under Rule 13a-14(a) of
        the Securities Exchange Act of 1934, filed herewith.

31.2    Rule  13a-14(a)/15d-14(a)  Certification  of CFO under Rule 13a-14(a) of
        the Securities Exchange Act of 1934, filed herewith.

32.1    Section   1350   Certification   of  CEO  under   Section   906  of  the
        Sarbanes-Oxley Act of 2002, filed herewith.

32.2    Section   1350   Certification   of  CFO  under   Section   906  of  the
        Sarbanes-Oxley Act of 2002, filed herewith.


*       Indicates  management  contracts,  compensatory plans or arrangements of
        the company required to be filed as an exhibit.




                                 Page 28 of 28