WATSONVILLE — West Marine beat its own expectation for the traditionally slow first quarter, reporting Thursday smaller losses and an 8.6 percent jump in net revenues from a year ago.
“We continued to make great progress during the first quarter of this year, building upon the substantially improved results we delivered in 2009,” said Geoff Eisenberg, chief executive officer and president.
The boating supply and accessory company typically reports first quarter losses due to seasonality, but the company said a strong operating performance helped make it the sixth consecutive quarter of improved year over year improvement. Eisenberg credited the company’s associate teams.
“It’s a clear indication that the changes West Marine has undergone to reposition itself have been quite effective,” Eisenberg said.
Shares of West Marine stock shot up more than a dollar, or 9.33 percent, Thursday to close at a 52-week high of $12.65, more than double what it closed at a year ago.
“For the first time in many years, we’ve experienced solid sales growth,” Eisenberg told investors and analysts Thursday on a national conference call. An improving economy, the closure last year of a major competitor, better inventory control and fortunate weather, particularly in the Northeast, also contributed to bottom line improvements.
Although boat sales continue to drop on the national front, for West Marine, sales climbed significantly for some categories, such as boat maintenance.
“We’ve been seeing signs that more customers are preparing their boats for usage this year,” Eisenberg said. Bigger-ticket items, especially high-margin electronics, are also selling better. The improvements were “broad-based.”
Brunswick Corp., a major boating retailer that also announced its quarterly report Thursday, said there are early signs of recovery in the boating industry, however, the industry saw a decline in retail sales for new boats overall during the first quarter.
West Marine, which once had more than 400 stores in the U.S., plans to continue with its long-term plan to replace and consolidate smaller stores and replace them with larger format and superstores of more than 20,000 square feet. During the quarter, the company opened a 15,000-square-foot store in Maryland and a 17,000-square-foot store in North Carolina. The company has 334 stores in 38 states, in addition to a wholesale and Internet business.
West Marine Inc.
WHAT: West Marine is a retailer and wholesaler of boating supplies with 334 company-owned stores in 38 states, Puerto Rico and Canada and two franchised stores in Turkey.
HEADQUARTERS: 500 Westridge Drive, Watsonville
INFORMATION: 728-2700; http://www.westmarine.com
HISTORY: Founded by Randy Repass in 1968 as a mail order business. First store opened in 1975 and the company went public in 1993.
LEADERSHIP: Geoff Eisenberg, president and chief executive officer
EMPLOYEES: The company employed 4,149 people at year-end
STOCK: West Marine shares trading on the NASDAQ as WMAR climbed $1.08 Thursday to close at $12.65. The 52-week range is $5.15-$12.65.
FINANCIALS: First quarter net loss was $8.98 million, or a loss of 40 cents per share, on revenues of $109.6 million, compared to a loss of $15.78 million, or a loss of 71 cents per share, on revenues of $100.97 million in the first quarter of 2009. Comparable store sales increased 8.4 percent from a year ago.
Published in the Santa Cruz Sentinel (HERE )