Merry-Go-Round posts record sales, earnings

March 12, 1991|By Cindy Harper-Evans

Joppa-based Merry-Go-Round Enterprises Inc. reported yesterday that it had record sales and earnings for the fourth quarter and the fiscal year that ended Feb. 2.

The stellar performance is part of a continuing pattern at the teen clothing chain of seemingly being immune to the high unemployment and debt levels among consumers and unrest in the Middle East that has hurt many retailers' sales and earnings figures.

For the fourth quarter, net sales increased 19.6 percent from a year earlier, to $220.8 million. Earnings rose 26.8 percent, to $14 million.

Sales at stores open a year or more increased approximately 15 percent, a figure analysts called phenomenal since many retailers are posting only single-digit increases -- or none at all.

For the fiscal year, Merry-Go-Round sales increased 31.2 percent, to $628.1 million. Earnings increased 68.6 percent, to $37.5 million.

Merry-Go-Round stock, which is traded over the counter, closed down $1.75 yesterday to $22.375. Like other stocks, it was pushed down by investors' worries about the outlook of the economy and the overall corporate earnings picture, market analysts said.

Analysts reached yesterday were not surprised at Merry-Go-Round's sound fourth quarter and year-end performance.

"They always do better than we expect," said Edward F. Johnson, a Lynch, Jones & Ryan analyst who follows the retailer closely. "They appeal to an age group of young men that spend a lot on their clothes. Even more than women."

Merry-Go-Round targets 15-to-25-year-old men and women -- but mostly men -- with its high-style, trendy clothes in its 700 'N locations in 38 states. It operates under the Merry-Go-Round, DeeJaiz, Attivo and Cignal banners.

"The increases from the prior year are especially gratifying considering that the results for the fourth quarter and fiscal 1990 were records as well," President and Chief Executive Michael D. Sullivan said in a prepared statement yesterday.

The retailer said it could not make statements beyond the press release because it is in a "quiet period" stemming from its registration with the Securities and Exchange Commission to sell 900,000 shares from the Goldsmith Foundation and the estate of Harold Goldsmith.

Mr. Goldsmith, co-founder of the clothing store empire, was killed Feb. 13 when his chartered Lear jet crashed and burned while landing in a light snow in Aspen, Colo.

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