Shares in Merry-Go-Round Enterprises Inc., whose sales and earnings have been bucking the recession for more than a year, fell sharply yesterday in heavy trading for a second day after an analyst cut his earnings estimates for the Joppa-based company.
The company's stock fell $1.75 to close yesterday at $11.75, a 13 percent drop, as 1.29 million shares were traded. Average daily volume for Merry-Go-Round is 476,400 shares.
Robert F. Buchanan, an analyst at Baltimore-based Alex. Brown & Sons, said in a report yesterday that the "fashion-forward retailer" has lost sales momentum because the items it carries are discretionary purchases and mall traffic is down nationally.
Mr. Buchanan told the Dow Jones News Service that he expects Merry-Go-Round's earnings for its third quarter, which ends this month, to be 19 cents a share instead of the 24 cents he had predicted earlier for the retailer. He also lowered his fourth-quarter prediction from 30 cents to 27 cents.
A Merry-Go-Round spokesman could not be reached for comment.
Mr. Buchanan's revised prediction was the second to buffet Merry-Go-Round's stock in the past two trading days.
On Friday, the stock fell 87 1/2 cents, or 6.1 percent, after a First Manhattan Co. analyst cut his third-quarter earnings estimate to between 19 cents and 21 cents a share. Friday's stock loss came on a volume of 846,000 shares.
Merry-Go-Round, which caters to younger shoppers who are slow to cut their spending in a downturn, has largely escaped the problems that have ravaged many retailers' earnings.
The company posted a 26 percent earnings gain for the second quarter, compared with the corresponding part of the previous year.