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WATSONVILLE — West Marine, the nation’s largest boating supplier, reported Thursday a $1.4 million drop in net income compared to last year and a post July Fourth slowdown in sales.
Unusual weather on both coasts probably helped and hindered third quarter sales, according to Geoff Eisenberg, company president and chief executive officer.
The company reported a 2.6 percent jump in third quarter net revenues over last year, but earnings per share for the quarter dropped to 32 cents compared to 38 cents a year ago. Net income was $7.43 million compared to $8.47 million last year for the same quarter.
Overall, the company has been plodding along during the economic downturn, focusing on consolidations and new strategic store expansions. The focus in recent years has been to have fewer, larger stores, rather than many small locations. Thursday, the company announced plans to open a one-of-a-kind 50,000-square-foot store in Fort Lauderdale.
“We continue to be very pleased with our overall year-to-date performance,” Eisenberg said. “While some unusually large year-over-year expense variances impacted our bottom line comparisons for the third quarter, our improvement in sales and margin indicate to us that the fundamental aspects of our business, as well as our key growth strategies, are making good progress.”
The company closed four stores during the quarter but maintained a fairly flat amount of square footage due to expansions at others. Comparable store sales climbed about 3.7 percent, in part due to an increased focus on selling to wholesale customers through existing store locations. The company is also expanding its private label category to include women’s clothes and is working to improve its online presence, which has had some setbacks since its re-launch earlier this year. Eisenberg said a mobile application would be available soon.
“Our key strategies have been meeting with success,” Eisenberg said, describing his philosophy as “trying to be appropriately aggressive” with “a methodical approach.”
The company reported zero debt and $37.5 million in cash at the end of the third quarter, compared to zero debt and a cash balance of $22.3 million at the end of the third quarter last year.
As of Oct. 2, net revenues for the year were up 6.4 percent and comparable store sales increased 7.2 percent from last year. Net income for the first nine months of 2010 was $33 million, or $1.44 per share, compared to $25.2 million, or $1.13 per share last year.
Earlier in the month, the company announced for the first time recipients of a new annual Marine Conservation Grants program. Nine nonprofit organizations in the U.S. received a total of $30,000. Recipients included:
Since 1994, West Marine has donated more than $4.5 million to nonprofit organizations that support youth boating, boating safety and the marine environment.
West Marine Inc.
WHAT: West Marine is a retailer and wholesaler of boating supplies and apparel with 328 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 employs 4,521, about 370 of whom work locally.
STOCK: West Marine shares trading on the NASDAQ as WMAR dropped 19 cents Thursday to close at $9.47. The 52-week range is $6.81-$13.63.
FINANCIALS: Net income for the third quarter was 7.43 million or 32 cents per diluted share on revenues of $172.54 million, compared to net income of $8.47 million or 38 cents per diluted share on revenues of $168.15 million in the same quarter.
This article was first published here.