Financial Report: Net Income Down 67% at Guitar Center

Westlake Village, CA–Guitar Center, which mails the Musician’s Friend and American Music catalogs, (Nasdaq: GTRC), posted a 15% net sales increase for the quarter ended Sept. 30, to $225.0 million, compared to $191.0 million last year. However, net income fell 67% for the quarter to $1.4 million, compared to net income of $4.3 million last year.

“We experienced slower traffic in our Guitar Center stores and reduced order volume in our direct response division that resulted in consolidated sales in September being significantly below our original expectations for the month,” said Marty Albertson, president and co-chief executive officer in a statement. Net sales in its direct response division increased 15%, to $35.7 million, from $31.1 million last year. The company says sales have stabilized in the last few weeks. Sales at the direct response division have also improved and the Musician’s Friend catalog that was mailed to consumers in the first week in October is performing well. Additionally, American Music catalog sales have been in line with our expectations. We are cautiously optimistic regarding the upcoming holiday season.”

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