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

                                    FORM 10-Q

(Mark One)

[X]      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 For the quarterly period ended November 30, 2005
                                     
                                       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 of Incorporation)                 (I.R.S. Employer 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 Rule 12b-2 of the Exchange Act). Yes |X| No ___ 

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes___ No |X|

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 November 30, 2005
 Common Stock, par value $0.50                              177,032,738


A Table of Contents  is  included on Page 2 and an Exhibit  Index is included on
Page 29.






                   CIRCUIT CITY STORES, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS



PART I.  FINANCIAL INFORMATION

      Item 1.     Financial Statements:

                     Consolidated Statements of Operations -
                     Three Months and Nine Months Ended November 30, 2005 and 2004                                    3

                     Consolidated Balance Sheets -
                     November 30, 2005, and February 28, 2005                                                         4

                     Consolidated Statements of Cash Flows -
                     Nine Months Ended November 30, 2005 and 2004                                                     5

                     Notes to Consolidated Financial Statements                                                       6

      Item 2.     Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                                                          12

      Item 3.     Quantitative and Qualitative Disclosures about Market Risk                                         24

      Item 4.     Controls and Procedures                                                                            24

PART II.          OTHER INFORMATION

      Item 1.     Legal Proceedings                                                                                  25

      Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds                                        26

      Item 6.     Exhibits                                                                                           27

SIGNATURES                                                                                                           28

EXHIBIT INDEX                                                                                                        29

                                  Page 2 of 29


                          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
                                                              2005               2004                2005             2004     
                                                           ------------      ------------       ------------      -------------
Net sales and operating revenues                             $2,905,678         $2,532,441        $7,695,835         $7,003,279
Cost of sales, buying and warehousing                         2,202,583          1,894,602         5,822,819          5,279,520
                                                           ------------      -------------      ------------      -------------
Gross profit                                                    703,095            637,839         1,873,016          1,723,759

Finance income                                                        -                  -                 -              5,564
Selling, general and administrative expenses                    676,577            639,641         1,854,991          1,741,713
Stock-based compensation expense                                  9,321              6,442            19,350             20,839
Interest expense                                                    644                476             1,255              1,625
                                                           ------------      -------------      ------------      -------------
Earnings (loss) from continuing operations
     before income taxes                                         16,553             (8,720)           (2,580)           (34,854)
Income tax provision (benefit)                                    6,411             (2,820)             (961)           (12,304)
                                                           ------------      -------------      ------------      -------------
Net earnings (loss) from continuing operations                   10,142             (5,900)           (1,619)           (22,550)
Net loss from discontinued operation                                  -                  -                 -             (1,214)
                                                           ------------      -------------      ------------      -------------
Net earnings (loss)                                        $     10,142      $      (5,900)     $     (1,619)     $     (23,764)
                                                           ============      =============      ============      =============

Weighted average common shares:
    Basic                                                       174,438            191,135           179,426            195,321
                                                           ============      =============      ============      =============
Diluted                                                         177,509            191,135           179,426            195,321
                                                           ============      =============      ============      =============
Net earnings (loss) per share:
    Basic:
       Continuing operations                               $       0.06      $      (0.03)      $      (0.01)     $       (0.12)
       Discontinued operation                                         -                 -                  -              (0.01)
                                                           ------------      ------------       ------------      -------------
                                                           $       0.06      $      (0.03)      $      (0.01)     $       (0.12)
                                                           ============      ============       ============      =============
    Diluted:
       Continuing operations                               $       0.06      $      (0.03)      $      (0.01)     $       (0.12)
       Discontinued operation                                         -                 -                  -              (0.01)
                                                           ------------      ------------       ------------      -------------
                                                           $       0.06      $      (0.03)      $      (0.01)     $       (0.12)
                                                           ============      ============       ============      =============


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


See accompanying notes to consolidated financial statements.


                                  Page 3 of 29



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

                                                                                       November 30, 2005       Feb. 28, 2005
                                                                                          (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents                                                               $      493,659           $  879,660
Short-term investments                                                                          42,274              125,325
Accounts receivable, net of allowance for doubtful accounts                                    189,749              172,995
Merchandise inventory                                                                        2,681,045            1,459,520
Deferred income taxes                                                                           24,970               29,518
Income tax receivable                                                                           15,051                    -
Prepaid expenses and other current assets                                                       61,159               18,697
                                                                                        --------------           ----------

Total current assets                                                                         3,507,907            2,685,715

Property and equipment, net of accumulated depreciation of
     $1,156,767 and $1,104,137                                                                 815,393              738,802
Deferred income taxes                                                                           93,491               73,558
Goodwill                                                                                       228,593              215,884
Other intangible assets, net of accumulated amortization of
     $4,773 and $3,035                                                                          29,763               31,331
Other assets                                                                                    42,297               44,092
                                                                                        --------------           ----------

TOTAL ASSETS                                                                                $4,717,444           $3,789,382
                                                                                            ==========           ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                                                            $2,127,047           $  961,718
Accrued expenses and other current liabilities                                                 240,030              228,966
Accrued income taxes                                                                                 -               72,274
Short-term debt                                                                                 68,560                    -
Current installments of long-term debt                                                           1,488                  888
                                                                                            ----------           ----------

Total current liabilities                                                                    2,437,125            1,263,846

Long-term debt, excluding current installments                                                  29,234               11,522
Accrued straight-line rent and deferred rent credits                                           242,487              230,426
Accrued lease termination costs                                                                 78,380              104,234
Other liabilities                                                                               94,399               91,920
                                                                                            ----------           ----------

TOTAL LIABILITIES                                                                            2,881,625            1,701,948
                                                                                            ----------           ----------

Stockholders' equity:
Common stock, $0.50 par value;
     525,000,000 shares authorized; 177,032,738 shares
     issued and outstanding at November 30, 2005
     (188,150,383 at February 28, 2005)                                                         88,516               94,075
Capital in excess of par value                                                                 475,727              721,038
Retained earnings                                                                            1,233,989            1,247,221
Accumulated other comprehensive income                                                          37,587               25,100
                                                                                            ----------           -----------

TOTAL STOCKHOLDERS' EQUITY                                                                   1,835,819            2,087,434
                                                                                            ----------           -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $4,717,444           $3,789,382
                                                                                            ==========           ==========
See accompanying notes to consolidated financial statements.


                                  Page 4 of 29


                   Circuit City Stores, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows (Unaudited)
                             (Amounts in thousands)

                                                                                                  Nine Months Ended
                                                                                                     November 30
                                                                                             2005                   2004   
                                                                                        --------------         ------------
Operating Activities:
Net loss                                                                               $        (1,619)         $    (23,764)
Adjustments to reconcile net loss to net cash (used in) provided by
    operating activities of continuing operations:
    Loss from discontinued operation                                                                 -                 1,214
    Depreciation and amortization                                                              109,685               100,047
    Stock option expense                                                                         9,821                14,271
    Amortization of restricted stock awards                                                      7,871                 5,942
    (Gain) loss on dispositions of property, equipment and other assets                         (1,949)                2,262
    Provision for deferred income taxes                                                        (10,926)              (82,063)
    Goodwill impairment                                                                          2,711                     -
Changes in operating assets and liabilities:
       Increase in accounts receivable, net                                                    (16,898)              (19,468)
       Decrease in retained interests in securitized receivables                                     -                32,867
       Increase in merchandise inventory                                                    (1,213,013)             (832,085)
       Increase in prepaid expenses and other current assets                                   (42,861)              (23,607)
       Decrease in other assets                                                                    327                16,836
       Increase in accounts payable                                                          1,162,632               893,546
       Decrease in accrued expenses, other current liabilities and
           accrued income taxes                                                                (71,604)              ( 3,369)
       (Decrease) increase in other long-term liabilities                                      (12,662)               19,023
                                                                                       ---------------         ------------
Net cash (used in) provided by operating activities of continuing
       operations                                                                              (78,485)              101,652
                                                                                       ---------------         ------------
Investing Activities:
--------------------
Proceeds from the sale of the private-label finance operation                                        -               475,857
Acquisitions, net of cash acquired of $0 and $30,615                                           (13,255)             (268,668)
Purchases of property and equipment                                                           (214,421)             (207,755)
Proceeds from sales of property, equipment and other assets                                     54,400                75,453
Purchases of investment securities                                                            (140,803)                    -
Proceeds from maturities of investment securities                                              225,000                     -
                                                                                        --------------          ------------
Net cash (used in) provided by investing activities of continuing
       operations                                                                              (89,079)               74,887
                                                                                        --------------          ------------
Financing Activities:
--------------------
Proceeds from short-term debt                                                                   67,299                10,183
Principal payments on long-term debt                                                            (1,078)              (15,081)
Repurchases of common stock                                                                   (298,479)             (210,052)
Issuances of common stock, net                                                                  25,719                20,849
Dividends paid                                                                                  (9,737)              (10,498)
Redemption of preferred share purchase rights                                                   (1,876)                    -      
                                                                                       ---------------            ----------
Net cash used in financing activities of continuing operations                                (218,152)             (204,599)
                                                                                       ---------------          ------------
Net cash used in discontinued bankcard finance operation                                            -                 (4,282)
Effect of exchange rate changes on cash                                                           (285)                1,349
                                                                                       ---------------         ------------
Decrease in cash and cash equivalents                                                         (386,001)              (30,993)
Cash and cash equivalents at beginning of year                                                 879,660               783,471
                                                                                       ---------------          ------------
Cash and cash equivalents at end of period                                             $       493,659         $     752,478
                                                                                       ===============          ============
See accompanying notes to consolidated financial statements.




                                  Page 5 of 29


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

1.   Basis of Presentation

     Circuit  City  Stores,  Inc.  is a leading  specialty  retailer of consumer
     electronics,  home office  products,  entertainment  software,  and related
     services. The company has two reportable segments: its domestic segment and
     its international segment.

     The  domestic  segment  is  primarily  engaged in the  business  of selling
     brand-name  consumer   electronics,   personal   computers,   entertainment
     software,  and services in Circuit City stores in the United States and via
     the  Web at  www.circuitcity.com.  At  November  30,  2005,  the  company's
     domestic  segment operated 625 Superstores and six other stores in 157 U.S.
     media markets.

     The international segment is comprised of the operations 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. In
     addition to giving Circuit City a greater  product-sourcing  capability and
     the ability to accelerate the offering of private-label  merchandise to its
     customers,  the acquisition of InterTAN gave the company its first presence
     in the Canadian market.  The international  segment is primarily engaged in
     the  business  of  selling  both  private-label  and  brand-name   consumer
     electronics.  The  international  segment's  headquarters  are  located  in
     Barrie,  Ontario,  Canada, and it operates through retail stores and dealer
     outlets  in Canada  under the trade  names THE  SOURCE BY  CIRCUIT  CITYSM,
     RadioShack(R),  Rogers Plus(R) and Battery  Plus(R).  At November 30, 2005,
     the international  segment conducted business through 954 retail stores and
     dealer outlets,  which consisted of 533  company-owned  stores,  304 dealer
     outlets,  93 Rogers  Plus(R)  stores and 24  Battery  Plus(R)  stores.  The
     international segment also operates a Web site at www.thesourcecc.ca.

     InterTAN,   Inc.  is  involved  in  ongoing   litigation   with  RadioShack
     Corporation.  As a result of this  litigation,  the  international  segment
     re-branded  virtually all of its company-owned stores and dealer outlets to
     THE SOURCE BY CIRCUIT CITYSM.  The brand transition costs primarily include
     advertising costs and the write-down of RadioShack(R) branded inventory and
     totaled $29.8 million for the nine months ended November 30, 2005. See Note
     2 for a discussion of the litigation.

     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 for the nine months
     ended  November 30, 2004. The company  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.  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.  The net results from the program  agreement  are
     included in net sales and operating revenues on the consolidated statements
     of operations.

     The preparation of financial  statements in conformity with U.S.  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions  that  affect the  reported  amounts  of  assets,  liabilities,
     revenues  and  expenses  and  the  disclosure  of  contingent   assets  and
     liabilities. Actual results may differ from those estimates. 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 necessarily 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 in the company's fiscal 2005 Annual Report on
     Form 10-K.

                                  Page 6 of 29

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

2.   Litigation

     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 and
     February  4, 2005 (the  "RadioShack  litigation").  InterTAN  disputes  the
     termination  scenarios  alleged by RadioShack  and is vigorously  defending
     against those claims.  The parties  argued a RadioShack  motion for partial
     summary  judgment on February 3, 2005. On March 24, 2005,  the court issued
     an order on that motion  stating that the  agreements  were  terminated  no
     later than December 31, 2004. Under the ruling, InterTAN's rights under the
     agreements expired June 30, 2005.

     Circuit City continues to believe that  RadioShack is not entitled to early
     termination of the agreements,  that InterTAN has  substantial  defenses to
     the  RadioShack  claims and that  RadioShack has breached the agreements by
     seeking  early   termination.   InterTAN  intends  to  continue   defending
     vigorously  the claims in the  RadioShack  litigation  and to exercise  its
     rights under the  agreements,  as well as any appeal  rights.  Circuit City
     believes that this  litigation  will not have a material  adverse effect on
     the company's financial condition or results of operations.

3.   Finance Income

     Finance  income for the nine months ended  November 30, 2004,  includes the
     results from the company's  private-label finance operation including costs
     of approximately $6 million related to the sale of the operation on May 25,
     2004.

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

                                                          Nine Months Ended
     (Amounts in millions)                                November 30, 2004   
     -------------------------------------------------------------------------
     Securitization income.............................           $28.1
     Less: Payroll and fringe benefit expenses.........             7.6
             Other direct expenses.....................            14.9       
                                                       -----------------------
     Finance income....................................           $ 5.6       
                                                       =======================

     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.

4.   Stock-Based Compensation

     The company uses the fair value based method of accounting for  stock-based
     compensation.

     The fair value of each stock option  granted is estimated on 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
                                                             2005             2004               2005             2004 
-------------------------------------------------------------------------------------           -----------------------
     Expected dividend yield..........................       0.4%            0.5%                0.4%             0.6%
     Expected stock volatility........................        53%             63%                 59%              64%
     Risk-free interest rates.........................         4%              3%                  4%               4%
     Expected lives (in years)........................         4               5                   5                4


                                  Page 7 of 29

     Using these  assumptions in the  Black-Scholes  model, the weighted average
     fair  value of  options  granted  was $7.97 per share for the three  months
     ended  November  30,  2005,  and $8.51 per share for the nine months  ended
     November 30, 2005. The weighted  average fair value of options  granted was
     $8.25 per share for the three months ended November 30, 2004, and $6.61 per
     share for the nine months ended November 30, 2004.

5.   Comprehensive Income

     The  components of the company's  comprehensive  income  consist of the net
     earnings  (loss) and  foreign  currency  translation  adjustments.  Foreign
     currency translation  adjustments are recorded net of deferred income taxes
     directly as a component of stockholders' equity.

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



                                                                       Three Months Ended                  Nine Months Ended
                                                                           November 30                         November 30
     (Amounts in millions)                                            2005            2004               2005            2004  
     -----------------------------------------------------------------------------------------          -----------------------
     Net earnings (loss)........................................      $10.1          $ (5.9)             $ (1.6)       $(23.8)
     Foreign currency translation adjustments...................        4.0            25.0                12.5          34.6
                                                                  -------------------------             ---------------------
     Comprehensive income.......................................      $14.2           $19.1               $10.9       $  10.8
                                                                  =========================             =====================

6.   Net Earnings (Loss) Per Share

     The following table presents a reconciliation  of the denominators  used in
     the net earnings (loss) per share calculations.

                                                                       Three Months Ended                   Nine Months Ended
                                                                           November 30                         November 30
     (Shares in millions)                                             2005            2004               2005            2004  
     -----------------------------------------------------------------------------------------           ----------------------
     Weighted average common shares.............................      174.4           191.1               179.4           195.3
     Dilutive potential common shares:
         Options................................................        2.6               -                   -               -
         Restricted stock.......................................        0.5               -                   -               -
                                                                  ---------------------------            ----------------------
     Weighted average common shares and dilutive
         potential common shares................................      177.5           191.1               179.4           195.3
                                                                  ==========================             ======================

     For the three months ended November 30, 2005,  the  computation of dilutive
     potential  common shares excluded 5.6 million options to purchase shares of
     common  stock  because the options'  exercise  prices were greater than the
     average market price of the common shares and, therefore,  the effect would
     be anti-dilutive.

     For the nine months ended  November 30, 2005, and the three and nine months
     ended November 30, 2004, no stock options or restricted stock were included
     in the  calculation  of  diluted  net loss per share  because  the  company
     reported  a loss  from  continuing  operations.  Shares  excluded  were  as
     follows:

                                                                         At November 30
     (Shares in millions)                                             2005            2004    
     -----------------------------------------------------------------------------------------
     Options to purchase common stock...........................       15.6            17.4
     Restricted stock...........................................        5.5             2.3


7.   Common Stock Repurchased

     The company's  board of directors has  authorized  stock  repurchases up to
     $800 million,  of which $157.3 million  remained  available at November 30,
     2005. The company repurchased 6.0 million shares of

                                  Page 8 of 29

     common  stock at a cost of $102.2  million  during the three  months  ended
     November  30, 2005,  and 17.8  million  shares of common stock at a cost of
     $298.5  million during the nine months ended November 30, 2005. The company
     repurchased  4.5 million  shares of common stock at a cost of $69.4 million
     during the three months ended November 30, 2004, and 15.6 million shares of
     common  stock at a cost of $210.1  million  during  the nine  months  ended
     November 30, 2004.  As of November  30, 2005,  the company had  repurchased
     46.2 million shares of common stock at a cost of $642.7 million.

8.   Pension Plans

     The  company's  domestic  segment  has a  noncontributory  defined  benefit
     pension plan that was frozen as of February 28, 2005,  except for employees
     who were (i) within  three years of their early  retirement  date or normal
     retirement date; (ii) had reached their early or normal retirement date; or
     (iii) were  permanently  disabled  before March 1, 2005.  As a result,  all
     employees  affected by the plan freeze retain any benefits  accumulated  to
     the effective date, but are no longer eligible to increase their benefit.

     The company also has an unfunded nonqualified benefit restoration plan that
     restored  retirement  benefits for domestic  segment senior  executives who
     were affected by Internal  Revenue Code  limitations  on benefits  provided
     under the company's  pension plan. The benefit  restoration plan was frozen
     as of February 28, 2005, and will provide benefits for participants who, as
     of that date, were within 10 years of attaining their early retirement date
     or normal retirement date.

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



                                                                  Three Months Ended                   Nine Months Ended
                                                                       November 30                        November 30
     (Amounts in thousands)                                      2005             2004               2005            2004  
     -----------------------------------------------------------------------------------       ----------------------------
     Service cost..........................................    $     703          $3,497       $     2,332       $   10,492
     Interest cost.........................................        3,455           3,898            10,367           11,694
     Expected return on plan assets........................       (4,507)         (4,093)          (13,522)         (12,278)
     Recognized prior service cost.........................           54             119               161              356
     Recognized actuarial loss.............................          265           1,255               794            3,765
     Loss due to curtailment...............................            -             243                 -              243
                                                               -------------------------       ----------------------------
     Net pension (income) expense..........................    $     (30)         $4,919       $       132       $   14,272
                                                               =========================       ============================


     Circuit  City made no pension  plan  contributions  during the nine  months
     ended  November  30,  2005.  The  company is  currently  in the  process of
     evaluating its  assumptions to determine its year end benefit  obligations.
     Changes  in  assumptions  could  affect  the  amount of  contribution  and,
     therefore,  the company cannot estimate the level of contribution,  if any,
     for fiscal  2006.  The  company  intends to make any  contributions  to the
     defined  benefit  pension  plan  necessary  to meet ERISA  minimum  funding
     standards and will make any  additional  contributions  as needed to ensure
     that the fair  value of plan  assets at  February  28,  2006,  exceeds  the
     accumulated benefit obligation.

     A contribution of $529,000, which is equal to the expected benefit payments
     for fiscal  2006,  is  expected to be made to the  restoration  plan during
     fiscal 2006.  Benefit  payments  during the nine months ended  November 30,
     2005, were $397,000.

9.   Discontinued Operation

     On November  18,  2003,  the  company  completed  the sale of its  bankcard
     finance operation to FleetBoston Financial.  Bankcard results are presented
     as results from discontinued operation.

     For the  nine  months  ended  November  30,  2004,  the net  loss  from the
     discontinued  bankcard  finance  operation  totaled $1.2 million,  which is
     comprised of post-closing  adjustments  related to the sale of the bankcard
     operation.  Cash flows  related  to the  discontinued  operation  have been
     segregated on the consolidated statements of cash flows.

                                  Page 9 of 29

10.  Segment Information

     The company  has two  reportable  segments:  its  domestic  segment and its
     international  segment.  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 segment is primarily  engaged in the
     business of selling brand-name  consumer  electronics,  personal computers,
     entertainment   software,   and   services  in  the  United   States.   The
     international  segment  is  primarily  engaged in the  business  of selling
     private-label and brand-name consumer electronics products in Canada.

     Prior to the  second  quarter  of fiscal  2005,  the  company  had  another
     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 costs of
     approximately $6 million related to the sale of the operation, are included
     in finance  income for the nine months ended  November 30, 2004. See Note 3
     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  and providing
     credit card services to all cardholders.

     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)                                            2005           2004              2005         2004(a)  
     ----------------------------------------------------------------------------------------      --------------------------
     Domestic segment..........................................     $2,735.1         $2,390.5        $7,269.0        $6,721.9
     International segment.....................................        170.6            142.0           426.9           281.4
     Finance operation.........................................            -                -               -            28.1
                                                                  ---------------------------      --------------------------
     Total revenue.............................................      2,905.7          2,532.4         7,695.8         7,031.4
     Less: securitization income(b)............................            -                -               -            28.1
                                                                  ---------------------------      --------------------------
     Net sales and operating revenues .........................     $2,905.7         $2,532.4        $7,695.8        $7,003.3
                                                                 ============================      ==========================

     (a)The international  segment's revenue is included from May 12, 2004, when
     Circuit City acquired a controlling interest in InterTAN, Inc.
     (b)Securitization  income is included in finance income, which reflects the
     results of the finance operation and is reported  separately from net sales
     and operating revenues on the statements of operations.

     The net earnings  (loss) from continuing  operations by reportable  segment
     were as follows:

                                                                     Three Months Ended                Nine Months Ended
                                                                           November 30                   November 30
     (Amounts in millions)                                            2005          2004              2005          2004(a)
     -------------------------------------------------------------------------------------         ------------------------
     Domestic segment..........................................     $ 13.1         $(11.4)           $  7.8         $(35.3)
     International segment.....................................       (3.0)           5.5              (9.5)           9.2
     Finance operation.........................................          -              -                 -            3.5
                                                                  -----------------------          -----------------------
     Net earnings (loss) from continuing operations............     $ 10.1        $  (5.9)            $(1.6)        $(22.6)
                                                                  =======================          =======================

     (a)The   international   segment's  net  earnings  (loss)  from  continuing
     operations  are included  from May 12, 2004,  when Circuit City  acquired a
     controlling interest in InterTAN, Inc.

     Total assets by reportable segment were as follows:

                                                                 At November 30        At February 28
     (Amounts in millions)                                            2005                 2005        
     --------------------------------------------------------------------------------------------------
     Domestic segment.........................................      $4,169.9              $3,354.7
     International segment....................................         547.5                 434.7     
                                                                  -------------------------------------
     Total assets.............................................      $4,717.4              $3,789.4     
                                                                    ===================================


                                 Page 10 of 29

11.  Supplemental Consolidated Statements of Cash Flows Information

     The following table summarizes  supplemental  cash flow information for the
     nine months ended November 30, 2005 and 2004.



                                                                                           Nine Months Ended
                                                                                               November 30
     (Amounts in millions)                                                                2005            2004     
     --------------------------------------------------------------------------------------------------------------
     Supplemental schedule of non-cash investing and financing
       activities:
       Capital lease obligations.................................................          $17.5        $    2.8
                                                                                           =====        ========

     Acquisition of InterTAN:
       Fair value of assets acquired:
           Cash and cash equivalents............................................           $   -        $   30.6
           Merchandise inventory................................................               -            88.8
           Property and equipment, net..........................................               -            42.6
           Goodwill.............................................................               -           186.3
           Other intangible assets..............................................               -            28.0
           Other assets.........................................................               -            12.7
                                                                                           -----         -------
           Total fair value of assets acquired..................................               -           389.0

       Less:
           Liablities assumed...................................................               -            92.6
           Cash acquired........................................................               -            30.6
           Stock options issued.................................................               -             6.5
                                                                                           -----         -------
       Acquistion of InterTAN, net of cash acquired.............................           $   -          $259.3
                                                                                           =====          ======

   Other acquisitions:
       Fair value of assets acquired............................................           $13.6        $   13.4
       Less: liabilities assumed................................................             0.3             4.1
                                                                                           -----        --------
       Other acquisitions.......................................................           $13.3        $    9.3
                                                                                           =====        ========


12.  Recent Accounting Pronouncements

     In December 2004, the Financial Accounting Standards Board issued Statement
     of Financial  Accounting  Standards  No. 123 (revised  2004),  "Share-Based
     Payment." SFAS No. 123(R) requires companies to record compensation expense
     based on the fair value of employee  stock-based  compensation  awards. The
     statement also requires that the  compensation  expense be recognized  over
     the period  during  which the  employee is  required to provide  service in
     exchange for the award. SFAS No. 123(R) will be effective for the company's
     first  quarter of fiscal 2007.  The company  plans to adopt SFAS No. 123(R)
     using the modified  prospective  transition  method.  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,"  as amended by SFAS No.  148,  "Accounting  for
     Stock-Based Compensation-Transition and Disclosure." Under SFAS No. 123(R),
     the company will continue to use the Black-Scholes  option-pricing model to
     estimate the fair value of stock option grants. The company does not expect
     the adoption of SFAS No. 123(R) to have a material  impact on its financial
     position, results of operations or cash flows.

     In October 2005,  the FASB issued FASB Staff  Position  (FSP) No. FAS 13-1,
     "Accounting  for Rental Costs Incurred  During a Construction  Period." FSP
     No. FAS 13-1  requires  companies to expense rent  payments for building or
     ground leases  incurred during a construction  period.  FSP No. FAS 13.1 is
     effective  for all  interim or annual  reporting  periods  beginning  after
     December  15,  2005.  Retrospective   application  is  permitted,  but  not
     required. The company will adopt FSP No. FAS 13-1 on a prospective basis in
     the first quarter of fiscal

                                 Page 11 of 29

     2007.  The company does not believe the adoption of this new standard  will
     have a significant impact on its financial position,  results of operations
     or cash flows.

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. for cash
consideration of $259.3 million,  which includes transaction costs and is net of
cash   acquired  of  $30.6   million.   In  addition  to  giving  us  a  greater
product-sourcing  capability  and the  ability to  accelerate  the  offering  of
private-label  merchandise to our customers, the acquisition of InterTAN gave us
our first presence in the Canadian market.  InterTAN is primarily engaged in the
business of selling both  private-label  and  brand-name  consumer  electronics.
InterTAN's headquarters are located in Barrie, Ontario, Canada.

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.  Results  from the  private-label  finance  operation  are
included in finance  income for the nine months  ended  November  30,  2004.  We
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 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 three-year renewals. The agreement
has  customary  representations,  warranties,  covenants,  events of default and
termination  rights for an  agreement  of this type.  The net  results  from the
program  agreement  are  included  in net sales and  operating  revenues  on the
consolidated statements of operations.

CRITICAL ACCOUNTING POLICIES

See the discussion of critical accounting policies under Management's Discussion
and Analysis of Financial Condition and Results of Operations in our fiscal 2005
Annual  Report  on Form  10-K.  These  policies  relate to  accounting  for cash
consideration  received from vendors, the calculation of the liability for lease
termination  costs,  accounting  for  goodwill and other  identified  intangible
assets, accounting for stock-based compensation expense,  accounting for pension
plans and accounting for income taxes.

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  of any
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 necessarily indicative
of results for the entire fiscal year.


Summary of Segment Performance

Where  relevant,  we have  included  separate  discussions  of our  domestic and
international  segments.  Our  domestic  segment  is  primarily  engaged  in the
business  of  selling  brand-name  consumer  electronics,   personal  computers,
entertainment  software, and services in our stores in the United States and via
the Web at  www.circuitcity.com.  Our international segment is primarily engaged
in the business of selling  private-label  and brand-name  consumer  electronics
products  in  Canada  and  via  the Web at  www.thesourcecc.ca  and  principally
includes  the  operations  of  InterTAN,  Inc.,  which we  acquired in May 2004.
Consolidated  results include  results from InterTAN from the acquisition  date.
Prior to the second quarter of fiscal 2005, we had another  reportable  segment,
our finance operation. The following tables summarize performance by segment.

                                 Page 12 of 29



SEGMENT PERFORMANCE SUMMARY

                                             Three Months Ended Nov. 30, 2005                 Nine Months Ended Nov. 30, 2005
(Amounts in millions)                  Domestic      International    Consolidated       Domestic     International    Consolidated
----------------------------------------------------------------------------------       ------------------------------------------
Net sales and operating
    revenues........................      $2,735.1        $170.6        $2,905.7        $7,269.0         $426.9         $7,695.8
Gross profit........................      $  644.2        $ 58.9        $  703.1        $1,717.2         $155.8         $1,873.0
Selling, general and
    administrative expenses.........      $  614.2        $ 62.3        $  676.6        $1,685.8         $169.2         $1,855.0
Net earnings (loss) from
    continuing operations...........      $   13.1        $ (3.0)       $   10.1        $    7.8         $ (9.5)        $   (1.6)


                                                        Three Months Ended November 30, 2004
(Amounts in millions)                              Domestic      International           Consolidated
-----------------------------------------------------------------------------------------------------
Net sales and operating revenues...............  $2,390.5          $142.0            $2,532.4
Gross profit...................................  $  581.8          $ 56.0            $  637.8
Selling, general and administrative
    expenses...................................  $  593.0          $ 46.6            $  639.6
Net (loss) earnings from continuing
    operations.................................  $  (11.4)         $  5.5            $   (5.9)


                                                               Nine Months Ended November 30, 2004
(Amounts in millions)                             DomesticInternational(a)             Finance     Consolidated
---------------------------------------------------------------------------------------------------------------
Net sales and operating revenues...............     $6,721.9          $281.4               $  -         $7,003.3
Gross profit...................................     $1,612.9          $110.9               $  -         $1,723.8
Finance income.................................     $      -          $    -               $5.6         $    5.6
Selling, general and administrative
    expenses...................................     $1,646.9          $ 94.8               $  -         $1,741.7
Net (loss) earnings from continuing
    operations.................................     $  (35.3)         $  9.2               $3.5         $  (22.6)

(a)Amounts  are  included  from May 12,  2004,  when we  acquired a  controlling
interest in InterTAN, Inc.



Net Sales and Operating Revenues

Consolidated

For the third quarter of fiscal 2006, our total sales  increased 14.7 percent to
$2.91 billion,  and comparable  store sales increased 13.1 percent from the same
period last year. Total sales for the first nine months of fiscal 2006 increased
9.9  percent to $7.70  billion  from $7.00  billion for the first nine months of
last fiscal year.  Comparable  store sales  increased  6.5 percent for the first
nine months of fiscal 2006. A store's  sales are  included in  comparable  store
sales after the store has been open for a full 12 months. Comparable store sales
include Web-originated sales and sales from relocated stores.  Beginning June 1,
2005, international segment sales are included in comparable store sales and are
calculated in local currency.  The calculation of consolidated  comparable store
sales excludes the impact of fluctuations in foreign currency exchange rates.

Domestic Segment

For the third  quarter of fiscal  2006,  the  domestic  segment's  net sales and
operating revenues were $2.74 billion, an increase of 14.4 percent over the same
period last fiscal year.  Comparable  store sales  increased  13.3 percent.  The
sales  growth is largely  attributed  to  increases  in close  rate and  average
ticket,  since  store  traffic  for the quarter  was  relatively  flat.  For the
quarter, Web-originated sales grew by 74 percent over the same period last year.

                                 Page 13 of 29

For the nine months ended November 30, 2005,  domestic  segment sales were $7.27
billion,  an  increase of 8.1  percent  over the same  period last fiscal  year.
Comparable store sales increased 6.5 percent.

Our major product categories are the following:
o    video,  which  includes  televisions,   imaging  products,   DVD  hardware,
     camcorders,  digital cameras, digital video services, furniture and related
     accessories
o    information technology, which includes personal computer hardware, personal
     computer   services,   telecommunications   products  and  related  product
     accessories
o    audio, which includes home audio products, mobile audio products,  portable
     audio  products and related  accessories 
o    entertainment,   which  includes  movie  software,   music  software,  game
     software, game hardware and personal computer software

The percent of domestic segment sales represented by each major product category
for the periods ended November 30, 2005 and 2004, is shown below.



PERCENT OF DOMESTIC SEGMENT SALES BY CATEGORY(a)

                                                                 Three Months Ended                Nine Months Ended
                                                                     November 30                      November 30
                                                                2005             2004            2005             2004
--------------------------------------------------------------------------------------         -----------------------
Video.....................................................      46%               43%             43%               42%
Information technology....................................      28                30              30                33
Audio.....................................................      15                14              16                13
Entertainment.............................................      11                13              11                12  
                                                              ------------------------         ------------------------
Total.....................................................     100%              100%            100%              100%
                                                              ========================          =======================

(a)Excludes extended warranty revenues and installation revenue

In the video  category,  we  produced  a  double-digit  comparable  store  sales
increase in the third quarter.  Television  comparable  store sales increased by
double digits,  led by triple-digit  comparable store sales growth in flat panel
displays.  Growth in television  sales and  double-digit  comparable store sales
growth in digital imaging were partially offset by double-digit comparable store
sales declines in DVD players.

In the information  technology category,  we produced a single-digit  comparable
store sales increase in the third quarter  driven by a  double-digit  comparable
store sales increase in notebook computers.

In the audio  category,  we  produced  a  double-digit  comparable  store  sales
increase in the third  quarter,  primarily  reflecting  triple-digit  comparable
store sales growth in portable digital audio products.  Double-digit  comparable
store sales growth in mobile audio products reflects growth in digital satellite
radio and  navigation  products.  Comparable  store sales growth in portable and
mobile audio products was partially  offset by a single-digit  comparable  store
sales decline in home audio products.

In the entertainment category, we produced a single-digit comparable store sales
decrease in the third quarter,  reflecting a double-digit comparable store sales
decrease in music software and game products, partially offset by a single-digit
comparable store sales increase in video software.

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

DOMESTIC SEGMENT STORE MIX

                                                         Nov. 30, 2005       Feb. 28, 2005         Nov. 30, 2004
----------------------------------------------------------------------------------------------------------------
Superstores.......................................            625                 612                   622
Other stores......................................              6                   5                     5     
                                                      ----------------------------------------------------------
Total domestic segment stores.....................            631                 617                   627     
                                                      ==========================================================


                                 Page 14 of 29

In the three months ended  November 30,  2005,  we relocated  four  Superstores,
opened ten new  Superstores  and closed one  Superstore in the New Orleans,  La.
market that received significant storm-related damage from Hurricane Katrina. In
the nine months ended November 30, 2005, we relocated nine  Superstores,  opened
15 new Superstores, closed one Superstore in the Richmond, Va. market and closed
one Superstore in the New Orleans, La. market. In fiscal 2006, we expect to open
a total of 28 Superstores in our domestic  segment,  of which 18 are expected to
be new Superstores and 10 are expected to be relocations.

As of November 30, 2005,  there were 49 stores that had been relocated under our
store  revitalization  program  with  results  available  for at least 12 months
following  their  relocation.  There were also 62 new  stores  open more than 12
months on November 30, 2005, that were incremental to our overall store base. Of
those 62 incremental stores, 42 had been open more than 24 months.

The 49 relocated stores open more than 12 months produced the following  results
for their 12-month periods after grand opening:
o    an average sales change that was  approximately 28 percentage points better
     than the sales  pace of the rest of the  store  base  during  the same time
     periods
o    a return on invested  capital,  including  lease  termination  and sublease
     costs on vacated stores, of approximately 9 percent
o    a return on invested  capital,  excluding  lease  termination  and sublease
     costs on vacated stores, of approximately 24 percent

The 62 incremental stores open more than 12 months produced a return on invested
capital of  approximately  14 percent measured at the end of the first 12 months
after grand opening. The 42 incremental stores open more than 24 months produced
a return on invested  capital of approximately 22 percent measured at the end of
the second 12 months after grand opening.

Extended Warranty  Revenues.  The extended warranty revenue included in domestic
segment sales was $104.7 million,  or 3.8 percent of domestic  segment sales, in
the third quarter of fiscal 2006, compared with $91.0 million, or 3.8 percent of
domestic  segment  sales,  in last fiscal  year's  third  quarter.  The extended
warranty  revenue  included in domestic segment sales was $287.1 million for the
first nine months of fiscal  2006,  or 3.9 percent of  domestic  segment  sales,
compared with $260.0 million,  or 3.9 percent of domestic segment sales, for the
first nine months of last fiscal year.

The domestic  segment sells  extended  warranty  programs on behalf of unrelated
third  parties  who are the  primary  obligors.  Extended  warranty  sales carry
higher-than-average gross profit margins.


International Segment

The  international  segment's net sales and operating  revenues  increased  20.2
percent to $170.6  million for the third  quarter of fiscal 2006,  compared with
$142.0 million for the third quarter of last fiscal year. Comparable store sales
increased  7.5  percent  for the  quarter  in  local  currency.  Sales  from our
wholesale  relationships  increased  38 percent  for the third  quarter in local
currency.  The  effect  of  fluctuations  in  foreign  currency  exchange  rates
accounted for approximately 6 percentage  points of the international  segment's
third quarter total sales increase.

For the nine months ended  November 30, 2005,  the  international  segment's net
sales and  operating  revenues were $426.9  million.  For the period from May 12
through November 30, 2004, the  international  segment's net sales and operating
revenues were $281.4  million.  Comparable  store sales increased 7.8 percent in
local currency for the first nine months of fiscal 2006.  International  segment
sales were included in the comparable store sales calculation  beginning June 1,
2005.

                                 Page 15 of 29




INTERNATIONAL SEGMENT STORE MIX

                                                         Nov. 30, 2005       Feb. 28, 2005         Nov. 30, 2004
----------------------------------------------------------------------------------------------------------------
Company-owned stores..............................            533                 521                   518
Dealer outlets....................................            304                 331                   335
Rogers Plus(R) stores...............................           93                  88                    87
Battery Plus(R) stores..............................           24                  26                    27     
                                                      ----------------------------------------------------------
Total international segment stores................            954                 966                   967   
                                                      ===========================================================


In addition to the 954 retail stores and dealer  outlets open as of November 30,
2005,  the   international   segment  conducts  business  through  76  wholesale
relationships.  At February 28, 2005, the  international  segment  maintained 64
wholesale  relationships,  and at November 30, 2004,  it maintained 59 wholesale
relationships.


Gross Profit Margin

Consolidated

The gross profit margin was 24.2 percent of sales in the third quarter of fiscal
2006,  compared  with 25.2 percent in the same period last fiscal year.  For the
first nine months of fiscal 2006,  the gross  profit  margin was 24.3 percent of
sales, compared with 24.6 percent for the same period last year.

Domestic Segment

For the third quarter of fiscal 2006, the domestic segment's gross profit margin
decreased 79 basis  points from the same period last fiscal year.  Approximately
half of the change in the  domestic  gross profit  margin  reflects a decline in
store merchandise margin due to continued margin rate declines in video software
and projection  televisions.  With respect to video  software,  we continued our
efforts to drive  traffic  through  aggressive  movie  pricing.  With respect to
projection televisions,  we opted to remain competitive in the marketplace.  The
other half of the decline in domestic  gross profit  margin  results from higher
costs associated with our promotional financing program. The higher costs result
from higher interest rates, higher penetration of Circuit City credit card sales
and  the   implementation  of  promotional   financing  offers  that  were  more
competitive than those offered last year.

For the first nine months of fiscal 2006,  the domestic  segment's  gross profit
margin  decreased 37 basis  points from the same period last year.  The decrease
primarily  reflects  higher  costs  associated  with our  promotional  financing
program.  The margin  rates of video  software,  projection  televisions  and PC
hardware also  contributed to the decline.  Increased  extended  warranty sales,
which carry  higher-than-average  gross profit margins,  and improvements in the
efficiency of our product service and distribution  operations  partially offset
these declines.

International Segment

The  international  segment's gross profit margin in the third quarter of fiscal
2006  decreased 494 basis points from the same period last year.  The decline in
the  international  segment's gross profit margin primarily  reflects changes in
the product sales mix. The sales mix change was driven by weak sales performance
in higher-margin  categories including batteries,  parts,  accessories and toys,
and  strength  in   lower-margin   categories   including   video  and  personal
electronics.  Promotional  activity  in  the  wireless  communications  business
produced revenue and margin dollar growth, but at a lower margin rate.

The  international  segment's  gross  profit  margin for the nine  months  ended
November 30, 2005,  was 36.5 percent of sales.  For the period from May 12, 2004
to November 30, 2004, the  international  segment's gross profit margin was 39.4
percent of sales.

                                 Page 16 of 29

Finance Income

Finance  income was $5.6 million in the nine months ended November 30, 2004, and
includes  a  portion  of the  loss  on the  sale  of the  private-label  finance
operation to Chase Card Services and the income  generated by the  private-label
finance operation from the beginning of fiscal year 2005 through the sale date.

Prior  to  November  2003,   both  our  bankcard   finance   operation  and  our
private-label   finance  operation  were  conducted  through  our  wholly  owned
subsidiary,  First North  American  National Bank,  which was a  limited-purpose
credit card bank, and through  consolidated  special  purpose  subsidiaries  and
off-balance-sheet  qualifying  special purpose  entities.  As part of a focus on
strengthening  the  financial  performance  of our  core  business,  we sold our
bankcard  finance  operation to FleetBoston  Financial in November 2003 and sold
our private-label finance operation to Chase Card Services in May 2004.

Results  from the  bankcard  finance  operation  are  presented  as results from
discontinued operation on the consolidated financial statements;  therefore, its
results are not included in the "Components of Finance  Income" table.  See "Net
Loss from Discontinued Operation."

Coincident with the sale of the private-label  operation to Chase Card Services,
we entered into an ongoing arrangement with Chase Card Services under which they
offer  private-label  and  co-branded  credit  cards  to both  new and  existing
customers.

COMPONENTS OF PRETAX FINANCE INCOME

                                                        Nine Months Ended
(Amounts in millions)                                   November 30, 2004   
----------------------------------------------------------------------------
Securitization income..............................          $28.1
Less: Payroll and fringe benefit expenses..........            7.6
        Other direct expenses......................           14.9          
                                                   -------------------------
Finance income.....................................        $   5.6          
                                                   =========================

Securitization  income  primarily  is  comprised  of the gain on the sale of the
credit card receivables generated by our private-label finance operation, income
from the retained interests in the securitized receivables and income related to
servicing  the  securitized  receivables,  as well as the impact of increases or
decreases in the fair value of the retained interests.


Selling, General and Administrative Expenses

                         

Consolidated
                                                 Three Months Ended November 30                Nine Months Ended November 30
                                                 2005                 2004                     2005                   2004
                                                      % of                    % of                     % of                  % of
(Dollar amounts in millions)                   $      Sales          $        Sales          $         Sales        $         Sales 
------------------------------------------------------------------------------------   ---------------------------------------------
Store expenses..........................     $587.4   20.2%        $559.5     22.1%       $1,615.8     21.0%     $1,543.4     22.0%
General and administrative
     expenses...........................       86.6    3.0           61.0      2.4           243.1      3.2         161.4      2.3
Remodel expenses........................          -      -            0.2        -               -        -           0.3        -
Relocation expenses.....................        2.6    0.1           14.9      0.6             4.9      0.1          33.3      0.5
Pre-opening expenses....................        4.4    0.1            7.5      0.3             6.7      0.1          12.0      0.2
Interest income.........................       (4.3)  (0.1)          (3.4)    (0.1)          (15.4)    (0.2)         (8.8)    (0.1) 
                                          ------------------------------------------   ---------------------------------------------
Total  .................................     $676.6   23.3%        $639.6     25.3%       $1,855.0     24.1%     $1,741.7     24.9%
                                          =========================================    ============================================


Selling,  general and administrative  expenses were 23.3 percent of sales in the
third  quarter of this fiscal  year,  compared  with 25.3 percent in last year's
third quarter.  For the first nine months of fiscal 2006,  selling,  general and
administrative  expenses were 24.1 percent of sales,  compared with 24.9 percent
during the same period last fiscal year.

                                 Page 17 of 29

Domestic Segment



                                                        Three Months Ended            Nine Months Ended
                                                            November 30                  November 30
(Amounts in millions)                                     2005       2004             2005           2004  
------------------------------------------------------------------------------     ------------------------
Store expenses.......................................    $543.0      $521.3        $1,501.0        $1,466.6
General and administrative expenses..................      68.5        52.6           188.1           143.4
Remodel expenses.....................................         -         0.2               -             0.3
Relocation expenses..................................       2.6        14.9             4.9            33.3
Pre-opening expenses.................................       4.4         7.5             6.7            12.0
Interest income......................................      (4.2)       (3.4)          (14.8)           (8.7)
                                                       -----------------------     ------------------------
Total................................................    $614.2      $593.0        $1,685.8        $1,646.9
                                                       =======================     ========================

During the third quarter of fiscal 2006, the domestic segment's expense-to-sales
ratio  decreased  235 basis  points  from the same  period  last  year.  Of this
decrease,  195 basis  points is  attributable  to store  expenses  and  reflects
leverage on higher sales that was  partially  offset by $15.6  million in higher
advertising expense. The decrease also reflects a $9.4 million gain for the 2003
settlement in the Visa/MasterCard antitrust.

The  domestic  segment's  general  and  administrative   expense-to-sales  ratio
increased  by 30 basis  points.  The  increase  in  general  and  administrative
expenses is primarily  attributed to innovation  initiatives and upgrades to our
information technology systems.

Relocation  expenses  contributed 53 basis points to the decline of the domestic
segment's  expense-to-sales  ratio. The domestic  segment  relocated four stores
during the third  quarter of the current  fiscal year compared with 12 stores in
the same period last year, resulting in lower store relocation expenses.

During  the  first  nine  months  of  fiscal  2006,   the   domestic   segment's
expense-to-sales  ratio  decreased  131 basis  points  from the same period last
fiscal  year.  The  decrease in the domestic  segment's  expense-to-sales  ratio
primarily  reflects  leverage on higher  sales and  decreased  store  relocation
expenses.

International Segment

                                                        Three Months Ended            Nine Months Ended
                                                            November 30                  November 30
(Amounts in millions)                                     2005       2004             2005       2004(a)    
------------------------------------------------------------------------------     -------------------------
Store expenses.......................................     $44.3      $38.2           $114.8       $76.8
General and administrative expenses..................      18.1        8.4             55.0        18.0
Interest income......................................      (0.1)         -             (0.6)       (0.1)    
                                                       -----------------------     -------------------------
Total................................................     $62.3      $46.6           $169.2       $94.8     
                                                       =======================     =========================

(a) Selling, general and administrative expenses are included from May 12, 2004,
when we acquired a controlling interest in InterTAN, Inc.


For  the  third   quarter   of  fiscal   2006,   the   international   segment's
expense-to-sales  ratio  increased  372 basis  points  from the same period last
year. The increase in the  international  segment's  store  expenses  relates to
advertising  and  payroll  expenses.  The  international  segment's  general and
administrative  expenses in the third  quarter of fiscal 2006  include  expenses
associated  with the  brand  transition  in Canada  of $8.3  million,  primarily
related  to  incremental  advertising.  The  effect of  fluctuations  in foreign
currency exchange rates accounted for approximately $2.4 million of the increase
in the international segment's third quarter selling, general and administrative
expenses.

For the nine  months  ended  November  30,  2005,  the  international  segment's
expense-to-sales  ratio was 39.6 percent.  The international  segment's selling,
general and  administrative  expenses  were 33.7 percent of sales for the period
from May 12, 2004 through November 30, 2004. For the first nine months of fiscal
2006, the international  segment's general and  administrative  expenses include
expenses associated with the brand

                                 Page 18 of 29

transition in Canada.  These costs  primarily  include  incremental  advertising
costs and the write-down of RadioShack(R)  branded  inventory as a result of the
ongoing litigation with RadioShack and totaled $29.8 million.


Stock-based Compensation Expense

Stock-based  compensation  expense was $9.3  million for the three  months ended
November  30,  2005,  compared  with $6.4  million  for the three  months  ended
November 30, 2004. The increase  reflects an increase in restricted stock awards
over the prior year.

Stock-based  compensation  expense was $19.4  million for the nine months  ended
November  30,  2005,  compared  with $20.8  million  for the nine  months  ended
November 30, 2004. The decrease  reflects the complete  vesting of certain stock
option  grants  in  fiscal  2005 and the  first  half of  fiscal  2006 and lower
weighted-average  fair values of recent stock option grants  partially offset by
an increase in  restricted  stock  awards over the prior year.  The  stock-based
compensation  expense for the nine months  ended  November  30,  2004,  includes
compensation costs related to  performance-based  restricted stock grants. Under
the terms of those grants,  vesting is contingent  upon our achieving a targeted
operating  profit  margin for fiscal 2006.  During the fourth  quarter of fiscal
2005, management determined that it is unlikely that the target will be met and,
as a result, reversed the related expense.

Income Tax Provision

The consolidated effective income tax rate applicable to results from continuing
operations  was 38.7 percent for the three months ended  November 30, 2005,  and
32.3 percent for the three months ended November 30, 2004. The effective  income
tax rate applicable to results from  continuing  operations was 37.2 percent for
the nine months ended  November  30, 2005,  and 35.3 percent for the nine months
ended  November 30, 2004. The increase in the tax rate for the nine months ended
November 30, 2005,  is due to a change in the  provision  for state income taxes
and the anticipated resolution of federal and state tax matters.


Net Earnings (Loss) from Continuing Operations

The net earnings from continuing  operations were $10.1 million,  or 6 cents per
share, in the three months ended November 30, 2005,  compared with a net loss of
$5.9 million, or 3 cents per share, in the same period last fiscal year.

For the nine  months  ended  November  30,  2005,  the net loss from  continuing
operations  was $1.6  million,  or 1 cent per share,  compared with the net loss
from continuing operations of $22.6 million, or 12 cents per share, for the same
period last fiscal year.

Net Loss from Discontinued Operation

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  operation.  The net loss from the  discontinued
bankcard  finance  operation was $1.2 million for the nine months ended November
30, 2004.

RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting Standards No. 123 (revised 2004),  "Share-Based  Payment."
SFAS No. 123(R) requires companies to record  compensation  expense based on the
fair value of employee  stock-based  compensation  awards.  The  statement  also
requires  that the  compensation  expense be  recognized  over the period during
which the  employee is required  to provide  service in exchange  for the award.
SFAS No.  123(R) will be effective for our first quarter of fiscal 2007. We plan
to adopt SFAS No.  123(R)  using the  modified  prospective  transition  method.
Effective December 1, 2003, we adopted the fair value based method of accounting
for stock-based compensation in

                                 Page 19 of 29


accordance  with SFAS No. 123,  "Accounting for  Stock-Based  Compensation,"  as
amended by SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and
Disclosure."  Under SFAS No. 123(R),  we will continue to use the  Black-Scholes
option-pricing  model to estimate the fair value of stock option  grants.  We do
not  expect the  adoption  of SFAS No.  123(R) to have a material  impact on our
financial position, results of operations or cash flows.

In  October  2005,  the FASB  issued  FASB  Staff  Position  (FSP) No. FAS 13-1,
"Accounting for Rental Costs Incurred During a Construction Period." FSP No. FAS
13-1  requires  companies to expense rent payments for building or ground leases
incurred  during a  construction  period.  FSP No. FAS 13.1 is effective for all
interim  or  annual  reporting   periods  beginning  after  December  15,  2005.
Retrospective  application is permitted, but not required. We will adopt FSP No.
FAS 13-1 on a  prospective  basis in the first quarter of fiscal 2007. We do not
believe the adoption of this new standard will have a significant  impact on our
financial position, results of operations or cash flows.

FINANCIAL CONDITION


Liquidity and Capital Resources

Summary

At November 30, 2005, we had cash, cash  equivalents and short-term  investments
of $535.9 million,  compared with $1.00 billion at February 28, 2005. During the
first nine months of fiscal 2006,  we used $298.5  million of cash to repurchase
common stock under our stock repurchase authorization.  At November 30, 2004, we
had cash and cash equivalents of $752.5 million.  The  year-over-year  change in
the cash  balance  primarily  reflects the use of $348.3  million to  repurchase
common stock under our stock repurchase authorization.

Cash Flows

We used net cash from  operating  activities of $78.5 million in the nine months
ended  November 30,  2005,  compared  with  generating  net cash from  operating
activities  of $101.7  million in the nine months ended  November 30, 2004.  The
primary use of cash in the nine months ended  November  30,  2005,  was an $86.7
million  decrease in accrued income taxes primarily due to the payment of taxes.
In addition, there was a $50.4 million increase in merchandise inventory, net of
accounts  payable,  which  was  due to the  seasonal  build  in  inventory.  The
generation of cash in the nine months ended  November 30, 2004,  resulted from a
$32.9 million decrease in retained interests in securitized  receivables related
to the  sale  of the  private-label  finance  operation  and an  $893.5  million
increase  in  accounts  payable,  which was partly  offset by an $832.1  million
increase in merchandise inventory.

For the  nine  months  ended  November  30,  2005,  net cash  used in  investing
activities was $89.1 million and primarily  relates to purchases of property and
equipment  and  investment   securities  partly  offset  by  proceeds  from  the
maturities  of  investment  securities.  For the nine months ended  November 30,
2004, net cash provided by investing  activities was $74.9 million and primarily
relates to cash  proceeds of $475.9  million from the sale of the  private-label
finance operation, partly offset by the acquisition of InterTAN, Inc. for $259.3
million,  net of acquired cash of $30.6  million,  and purchases of property and
equipment.

We used net cash from financing  activities of $218.2 million in the nine months
ended  November 30, 2005,  compared with $204.6 million in the nine months ended
November  30,  2004.  The  primary use of cash for both  periods  relates to the
repurchase  of  common  stock.  The  board of  directors  has  authorized  stock
repurchases of up to $800 million, of which $157.3 million remained available at
November 30, 2005. We repurchased  17.8 million shares of common stock at a cost
of $298.5 million during the nine months ended November 30, 2005. We repurchased
15.6 million  shares of common stock at a cost of $210.1 million during the same
period last fiscal  year.  As of November  30,  2005,  we had  repurchased  46.2
million shares of common stock at a cost of $642.7 million.  Based on the market
value of the common  stock at  November  30,  2005,  the then  remaining  $157.3
million of the $800 million  authorization  would allow for the repurchase of up
to approximately 4 percent of the 177.0 million shares then outstanding.

                                 Page 20 of 29

Sources of Liquidity

We have a $500 million, four-year revolving credit facility secured by inventory
and accounts receivable.  This facility is scheduled to mature on June 27, 2009.
On  October  18,  2005,  we  amended  the terms of the  facility  to revise  the
borrowing  limits for the  international  and domestic  segments.  The amendment
increased the international  segment's  borrowing limit from $50 million to $100
million and decreased the domestic  segment's  borrowing limit from $450 million
to $400 million.  At November 30, 2005,  short-term  borrowings on this facility
were $68.6  million and related to our  international  segment.  At November 30,
2005, outstanding letters of credit related to this facility were $55.9 million,
leaving $375.5 million  available for borrowing.  We are in compliance  with all
covenants at November 30, 2005.

Net-owned  inventory  increased  by $56.2  million from  February  28, 2005,  to
November 30, 2005.  Net-owned  inventory is calculated by  subtracting  accounts
payable  from  merchandise  inventory.  Accounts  payable  includes  merchandise
payable,  expenses  payable,  the  liability  related  to gift  cards,  customer
deposits  and the rebate  liability.  Merchandise  inventory  increased to $2.68
billion at November 30, 2005, from $1.46 billion at February 28, 2005, driven by
an increase in domestic  segment  inventory of $1.13 billion due to the build of
inventory to support  shifts in the portfolio of products and to increase  store
in-stock positions.

Our primary  sources of liquidity  include  available cash,  borrowing  capacity
under  the  credit  facility,   landlord   reimbursements   and   sale-leaseback
transactions. We expect that our primary sources of liquidity will be sufficient
to fund capital expenditures and working capital for the foreseeable future.

FISCAL 2006 OUTLOOK

Our strategy for improving our operations, financial performance and shareholder
value  includes  the  following:  
o    upgrading processes, systems and talent to improve the core business
o    evolving the core business to generate incremental revenues and profits
o    innovating  to create  new  businesses,  related to our core  business,  to
     produce long-term growth

Key initiatives to upgrade the core business include the following:
o    store revitalization program
o    promotional and marketing effectiveness
o    product transition and pricing management
o    multiple sourcing alternatives
o    inventory  management,  including  improved  customer-encountered  in-stock
     levels and reduced net-owned inventory
o    collaborative vendor relationships
o    information systems enhancements,  including a company-wide data warehouse,
     as well as improved supply chain, merchandising and marketing systems

Key initiatives to evolve the core business include the following:
o    portfolio  management  of  merchandise  product  categories,  matching  our
     investments in merchandise  product categories with the strategic intent of
     the specific business
o    expanded service offerings
o    continued  investment  in Circuit City brand  awareness and in marketing by
     our Circuit City Direct business, ensuring a consistent multi-channel brand
o    improved customer experience led by Associate engagement
o    reduction of  performance  gap between the best and the poorest  performing
     stores

Key initiatives to innovate include the following:
o    win  in  home   entertainment   -  be  the  retail   destination  for  home
     entertainment products and services
o    digital home services - develop  breakthrough  consumer electronics service
     offerings

                                 Page 21 of 29

o    multi-channel retailing - move focus from transactions to relationships and
     provide solutions to customers wherever they want them

We have updated our fiscal 2006  outlook.  We revised the range of  expectations
for total sales growth. We now expect total sales growth of 10 to 12 percent. We
now expect  domestic  comparable  store sales growth in the  upper-single  digit
range. We narrowed the range of expectations for operating margin (earnings from
continuing  operations before income taxes as a percent of sales) to 1.6 percent
to 2.0 percent.

The fiscal 2006 outlook is based on the following assumptions:
o    continued strong sales performance
o    a stable competitive environment
o    a stable macroeconomic environment
o    no unforeseen inventory shortages

Domestic segment Superstore openings are shown in the table below.

DOMESTIC SEGMENT SUPERSTORE OPENINGS



                                                            Q1          Q2        Q3       Q4(a)   FY06(a)
----------------------------------------------------------------------------------------------------------
Incremental Superstores..............................        0          5          10       3        18
Relocated Superstores................................        3          2           4       1        10
                                                             -          -         ---       -        --
Total expected Superstore openings...................        3          7          14       4        28
                                                             =          =          ==       =        ==

(a)The number of fourth quarter Superstore openings is estimated.


For the year, we expect expenses related to domestic  segment store  relocations
to total  approximately  $7 million and  stock-based  compensation  expenses are
expected  to  total   approximately  $28  million.   For  fiscal  2006,  capital
expenditures,  net of landlord  reimbursements and sale leaseback  transactions,
are expected to total  approximately  $205 million.  We expect the  consolidated
effective income tax rate applicable to results from continuing  operations will
be 37.2 percent.

MANAGEMENT TRANSITION

As  reported  on Form 8-K on  December  22,  2005,  Circuit  City  Stores,  Inc.
announced  that W. Alan  McCollough  has  decided  to retire as chief  executive
officer effective February 28, 2005 and as chairman of the board of directors at
the 2006  Annual  Meeting of  Shareholders.  Mr.  McCollough  will not stand for
re-election to the board at the end of his term that expires in June 2006.

At a meeting of the Circuit City board of  directors  on Saturday,  December 17,
2005, following Mr. McCollough's confirmation of his intention to retire, Philip
J. Schoonover was elected unanimously to the board, effective  immediately,  and
named chief executive officer effective March 1, 2006.

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 2006 and
beyond,   are   forward-looking   statements  and  involve   various  risks  and
uncertainties. In most cases, you can identify our forward-looking statements by
words such as "expect," "anticipate," "believe," "should," "may," "plan," "will"
or similar words.

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

                                 Page 22 of 29

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 the following:
o    changes in the amount and degree of competition  and  promotional  pressure
     exerted  by  current   competitors  and  potential  new  competition   from
     competitors  using  either  similar or  alternative  methods or channels of
     distribution  such as the Internet,  telephone  shopping  services and mail
     order
o    changes in general  economic  conditions  including,  but not  limited  to,
     financial market performance, consumer credit availability, interest rates,
     inflation,  personal  discretionary  spending  levels,  trends in  consumer
     retail   spending,   both  in  general  and  in  our  product   categories,
     unemployment 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    the impact of new products and product  features on the demand for existing
     products and the pricing and profit margins associated with the products we
     sell
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    the lack of  availability  or access to sources of inventory or the loss or
     disruption in supply from one of our major suppliers
o    the impact of initiatives related to upgrading merchandising, marketing and
     information   systems  on  revenue  and  operating  margin  and  the  costs
     associated with these investments
o    the  impact  of  inventory  and  supply  chain  management  initiatives  on
     inventory levels and profitability
o    our 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 direct
     sales  channel and to generate  sales and margin  growth  through  expanded
     service offerings
o    the  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    the effect of pricing and promotional activities of our competitors and our
     response to those actions
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 our  advertising  and marketing  programs for  increasing
     consumer traffic and sales
o    the successful  implementation  of our  initiatives to upgrade,  evolve and
     innovate the core business
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    reduced investment returns in our pension plan
o    changes in our anticipated cash flow
o    whether,  when and in what amounts share  repurchases may be made under our
     stock buyback  authorization  
o    adverse results in significant litigation matters
o    impacts from legal  proceedings,  tax audits or other  contingencies  that,
     while not material to the company's  financial  position or ongoing results
     of operations,  may be material with respect to results of operations for a
     particular fiscal period
o    the ultimate outcome of the litigation instituted by RadioShack Corporation
     to terminate InterTAN's right to use the RadioShack(R) name in Canada
o    currency exchange rate  fluctuations  between Canadian and U.S. dollars and
     other currencies
o    the regulatory and trade environment in the U.S. and Canada
o    the disruption of global, national or regional transportation systems

                                 Page 23 of 29

o    the  occurrence of severe  weather  events or natural  disasters that could
     significantly damage or destroy stores or prohibit consumers from traveling
     to our retail locations
o    the successful  execution of the  initiatives to achieve revenue growth and
     increase  operating  margin and the accuracy of the assumptions  underlying
     our projected 2006 results as discussed under "Fiscal 2006 Outlook" in MD&A

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.

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,
2005,  U.S. dollar purchase  orders totaled  approximately  $17.1 million.  A 10
percent  decline in the value of the Canadian dollar would result in an increase
in product cost of  approximately  $1.7 million.  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, to the degree commercially feasible.

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
consolidated results of operations or financial position.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure 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.

Changes in Internal Controls

There were no changes in the company's internal control over financial reporting
in the quarter ended November 30, 2005,  that have materially  affected,  or are
reasonably  likely to materially  affect,  the company's  internal  control over
financial reporting.

                                 Page 24 of 29


                           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  has  operated   retail   consumer   electronics   outlets   under  the
RadioShack(R)  name in Canada under a licensing  agreement  with a subsidiary of
RadioShack  Corporation.  InterTAN has also operated 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 and  February  4, 2005 (the
"RadioShack  litigation").  InterTAN disputes the various termination  scenarios
alleged by RadioShack  and is defending  vigorously  against  those claims.  The
parties argued a RadioShack  motion for partial summary  judgment on February 3,
2005.  On March 24, 2005 the court  issued an order on that motion  stating that
the three  agreements were terminated no later than December 31, 2004. Under the
ruling, InterTAN's rights under the three agreements expired June 30, 2005.

Circuit  City  continues  to believe  that  RadioShack  is not entitled to early
termination of the  agreements,  that InterTAN has  substantial  defenses to the
RadioShack  claims and that  RadioShack  has breached the  agreements by seeking
early termination.  InterTAN intends to continue defending vigorously the claims
and to exercise its rights under the agreements, as well as any appeal rights.

Because of the ongoing  legal  conflict with  RadioShack,  Circuit City has been
taking  steps  to  position  its  Canadian  operations  for  continued  success,
regardless  of the outcome of this  litigation.  Circuit City believes that this
litigation  will not have a material  adverse effect on the company's  financial
condition or results of operations.

                                 Page 25 of 29



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, 2005:




                                                                                                                    Approximate
                                                                                              Total Number        Dollar Value of
                                                                                                of Shares           Shares that 
                                                                              Average         Purchased as           May Yet Be
                                                       Total Number            Price        Part of Publicly         Purchased
                                                        of Shares              Paid             Announced              Under
(Amounts in millions except per share data)            Purchased(a)           per Share           Program           the Program(b)
-----------------------------------------------------------------------------------------------------------------------------------
Sept. 1 - Sept. 30, 2005.........................           0.6               $16.82               0.6                   $249.5
Oct. 1 - Oct. 31, 2005...........................           5.4               $17.19               5.4                   $157.3
Nov. 1 - Nov. 30, 2005...........................             -               $    -                 -                   $157.3
                                                     -----------------                      -----------------
Total fiscal 2006 third quarter..................           6.0               $17.15               6.0       
                                                     =================                      =================

(a)In  addition to shares  purchased  as part of a publicly  announced  program,
includes   5,000  shares  that   represent   shares   purchased  in  open-market
transactions  by an officer of the company who may be  considered  an "affiliate
purchaser" as defined in Rule 10b -18(c)(3).

(b) In January  2003,  the company  announced  that the board of  directors  had
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 repurchase  capacity to $400 million. In March 2005,
the  company   announced  a  $400  million  increase  in  its  stock  repurchase
authorization,  raising the  repurchase  capacity to $800  million.  There is no
expiration date under the  authorization.  At November 30, 2005,  $157.3 million
remained   available   for  share   repurchases   under  the  share   repurchase
authorization.


                                 Page 26 of 29



ITEM 6.       EXHIBITS

      Articles of Incorporation and Bylaws

      3.1      Circuit  City  Stores,  Inc.  Amended  and  Restated  Articles of
               Incorporation,  effective  February 3, 1997,  as amended  through
               August 16, 2005, filed as Exhibit 3.1 to the company's Form 8-A/A
               filed  September  13,  2005  (File  No.  1-5767),  are  expressly
               incorporated herein by this reference.

      3.2      Circuit City Stores,  Inc. Bylaws,  as amended December 17, 2005,
               filed as Exhibit 3.1 to the company's  Current Report on Form 8-K
               filed  December  22,  2005  (File  No.  1-5767),   are  expressly
               incorporated herein by this reference.

      Material Contracts

      10.1     Circuit City Stores,  Inc. Benefit  Restoration  Plan, as amended
               and  restated  effective  February  28, 2005 and amended  through
               December 2005, filed herewith.*

      10.2     Retirement and Consulting  Agreement  between Circuit City Stores
               and  W.  Alan  McCollough  effective  December  22,  2005,  filed
               herewith.*

      10.3     Amendment  to the Circuit City Stores,  Inc.  Executive  Deferred
               Compensation Plan effective January 1, 2005, filed herewith.*

      10.4     Third  Amendment  to the Amended and Restated  Credit  Agreement,
               dated as of October 18, 2005, filed herewith.

      Rule 13a-14(a)/15d-14(a) Certifications

      31.1     Certification  of CEO  under  Rule  13a-14(a)  of the  Securities
               Exchange Act of 1934

      31.2     Certification  of CFO  under  Rule  13a-14(a)  of the  Securities
               Exchange Act of 1934

      Section 1350 Certifications

      32.1     Certification of CEO under Section 906 of the  Sarbanes-Oxley Act
               of 2002

      32.2     Certification of CFO under Section 906 of the  Sarbanes-Oxley Act
               of 2002

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


                                 Page 27 of 29


                                   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 and Chief Executive Officer



                           By:   /s/ Michael E. Foss                   
                                 --------------------------------------
                                 Michael E. Foss
                                 Executive 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 6, 2006


                                 Page 28 of 29


                                  EXHIBIT INDEX

      Articles of Incorporation and Bylaws


      3.1      Circuit  City  Stores,  Inc.  Amended  and  Restated  Articles of
               Incorporation,  effective  February 3, 1997,  as amended  through
               August 16, 2005, filed as Exhibit 3.1 to the company's Form 8-A/A
               filed  September  13,  2005  (File  No.  1-5767),  are  expressly
               incorporated herein by this reference.

      3.2      Circuit City Stores,  Inc. Bylaws,  as amended December 17, 2005,
               filed as Exhibit 3.1 to the company's  Current Report on Form 8-K
               filed  December  22,  2005  (File  No.  1-5767),   are  expressly
               incorporated herein by this reference.

      Material Contracts

      10.1     Circuit City Stores,  Inc. Benefit  Restoration  Plan, as amended
               and  restated  effective  February  28, 2005 and amended  through
               December 2005, filed herewith.*

      10.2     Retirement and Consulting  Agreement between Circuit City Stores,
               Inc. and W. Alan McCollough  effective  December 22, 2005,  filed
               herewith.*

      10.3     Amendment  to the Circuit City Stores,  Inc.  Executive  Deferred
               Compensation Plan effective January 1, 2005, filed herewith.*

      10.4     Third  Amendment  to the Amended and Restated  Credit  Agreement,
               dated as of October 18, 2005, filed herewith.

      Rule 13a-14(a)/15d-14(a) Certifications

      31.1     Certification  of CEO  under  Rule  13a-14(a)  of the  Securities
               Exchange Act of 1934

      31.2     Certification  of CFO  under  Rule  13a-14(a)  of the  Securities
               Exchange Act of 1934

      Section 1350 Certifications

      32.1     Certification of CEO under Section 906 of the  Sarbanes-Oxley Act
               of 2002

      32.2     Certification of CFO under Section 906 of the  Sarbanes-Oxley Act
               of 2002

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

                                 Page 29 of 29