Financial Report: Musician’s Friend Increases Net Sales

Westlake Village, CA-based Guitar Center, (Nasdaq:GTRC) which mails the Musician’s Friend catalog, posted a whopping 98% net income increase to $12.1 million for the quarter ended June 30, compared to net income of $6.2 million for last year. Consolidated net sales for the quarter increased 17% to $339.6 million, up from $291.6 million last year. Musician’s Friend’s net sales increased 13% to $68.2 million, compared with $60.4 million last year. Selling, general and administrative expenses for the direct response division were flat 21.4% compared with last year.

Gross margin increased slightly for the direct response division to 33.7%, compared with 32.1% in the second quarter of 2003. The increase in gross margin was from higher margins on selling and a reduction in sales returns, offset by higher freight costs.