U.S. consumer electronics retailer Circuit City says earnings for its fiscal fourth quarter will be lower than forecast, due to lower-than-expected sales and special costs for remodeling of its stores.

The profit warning comes as Circuit City is losing customers to rival retailer "Best Buy," while also preparing to remodel and relocate some of its stores - a project that is estimated to cost $182 million.

Circuit City also plans to break away its auto store business, CarMax, and make it a separate publicly-traded company. The move will allow investors to assess CarMax's performance independently from the Circuit City's electronic stores business.

Some information for this report provided by Bloomberg.

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