GUITAR CENTER GETS ROCKED.

Byline: Dave McNary Daily News Staff Writer

Stock of music-instrument specialist Guitar Center Inc. hit its lowest point in more than a year Tuesday as part of Wall Street's continued disenchantment with the retail sector.

The Agoura Hills-based retailer's shares lost 14 percent, dropping $2.375 to $14.25. That represents a 56 percent decline since Guitar Center hit its all-time high of $32.75 on July 17 and its worst performance since May 1997.

Investors began hammering Guitar Center shares after it announced in late July that same-store sales in the third and fourth quarters would not match the ``very strong'' growth of 15.7 percent posted in the first two quarters. Six analysts have issued ``buy'' ratings on the stock since then.

``Like many other retail stocks, Guitar Center has come under intense pressure since mid-July because of the perception that the retail group is not the place to be,'' said analyst Alan M. Rifkin of Piper Jaffray. Retail issues have been falling since the market peaked July 17 on fears that the U.S. economy will follow Asia and other emerging markets into recession.

``Guitar Center is as strong as it's ever been,'' asserted Rifkin, who has a ``strong buy'' rating on the stock with a 12-month target price of $24. ``The weakness in the stock does not reflect any change in fundamentals. They are gaining market share in an industry that's growing four times faster than the gross domestic product.''

Guitar Center, which operates 44 stores, earned $4.9 million on sales of $91.3 million in the second quarter. It became the first music-instrument retailer to go public, with a $115 million offering at $15 a share in March 1997.