Guitar Center Posts Sharp Jump in Profit

Musical instruments retailer Guitar Center Inc. said Wednesday that its fourth-quarter profit doubled on a 15% gain in sales. The Westlake Village company also projected higher sales and profit in the first quarter.

Guitar Center, the largest retailer of guitars, drums and other music products, said its net income for the quarter ended Dec. 31 rose to $13.4 million, or 57 cents a share, up from $6.6 million, or 29 cents, a year earlier.

Analysts had expected a profit of 53 cents a share, according to Thomson First Call.

Revenue climbed to $334.8 million from $289.9 million.

The company citied solid traffic in its stores during the peak holiday shopping season. Looking ahead, it expects first-quarter profit in a range of 16 cents to 18 cents a share on revenue of $284.8 million to $290.5 million. Guitar Center posted earnings of 15 cents on revenue of $251.5 million in the first quarter of 2002.

For the year, Guitar Center reported a profit of $25.2 million, or $1.09 a share, up 48% from $17 million, or 75 cents a share, a year earlier. Annual sales rose 16%, to $1.1 billion.

Shares of Guitar Center fell 48 cents to $18.03 on Nasdaq. The results were reported after the markets closed.

Although the recorded music industry continues to suffer from a protracted sales decline, business for sellers of musical instruments and products such as Guitar Center remains fairly strong.