Guitar Center executives discussed the company's expansion plansduring a conference call in which the Westlake Village-basedcompany reported first-quarter net income of $17.2 million and 57cents per diluted share for the first quarter ended March 31,against net income of $15.7 million and 55 cents per diluted sharein the first quarter the year before. Total sales increased 13.5%to $534.5 million in the first quarter from $470.7 million in theyear-before quarter.Erick Mason, EVP and chief financial officerfor the Guitar Center, commented in the conference call that theresults "exceeded our expectations." He noted that growth in salescame mainly as a result of new store openings, adding that thecompany is proceeding with its store expansion plans. During thequarter, the company opened 12 new Guitar Center stores, includingthe acquisition of the former Victor's House of Music location inParamus, NJ.

The 12 new stores that opened during the quarter included fiveof what the Guitar Center calls "primary format" stores, includingthe Victor's House of Music acquisition, as well as seven secondaryformat stores. The company's primary store format is its "largebox" retail store of 17,000 sf, designed for the largest cities andmarkets. The secondary format is the company's 10,000-sf store,which is designed for cities with populations of from 250,000 to900,000. Guitar Center executives have said in past presentationsthat the company sees the potential to expand to 160 locations ofeach of the formats.

Marty Albertson, chairman and CEO, said that the opening of the12 stores in the quarter was "consistent with our expansion plan toopen a significant portion of our new stores in the first half ofthis year." Albertson noted that although the Guitar Center hasre-branded the Victor's House of Music location, it has not yetremodeled it.