WATSONVILLE – Despite increased revenues, West Marine Inc. boating supply company said Thursday that net income and earnings per share slid as expected during the first quarter.
The numbers were still better than expected, said Geoff Eisenberg, president and chief executive officer. “We’ve always reported losses for the first fiscal quarter due to the seasonality of our business,” he said during a web cast conference call with investors and industry analysts.
The company reported a $12.35 million net loss or a loss of 55 cents earnings per share. Last year in the same quarter, the company reported a loss of $9.55 million or 43 cents per share. Revenues for the first quarter were $113.80 million compared to $109.56 last year.
The company which has shifted to higher margin products said there has been renewed strength in bigger ticket categories which had been negatively affected in the past few years during the economic downturn. “We are regaining some confidence in the market overall,” Eisenberg said.
The company experienced stronger than expected results in its wholesale business and online and virtual call center sales channels.
“These indicators signal to us that the main boating season may be stronger than we had originally anticipated, and thus we are raising our 2011 sales guidance.”
Net revenues are expected to be $634 million to $640 million, compared to $623 million last year. Earnings per share guidance increased to 68 cents to 77 cents per share compared to 57 cents last year.
The Watsonville-based company, which is the largest retailer and wholesaler of boating supplies in the country, continued to consolidate stores and ended the quarter with a total of 325 stores. About 4,200, up about 200 from the previous quarter people work for the company nationwide.
The company opened a flagship 23,000-square-foot store in Woburn, Mass., and a 12,000-square-foot store in Stratford, Conn., during the quarter. The company closed four smaller stores in the quarter. Next month the company plans to open a 28,000-square-foot flagship store in St. Petersburg, Fla.
“Like many companies, we keep a close eye on rising prices of gas and fuels,” Eisenberg said. “Unlike when prices spiked a few years ago, we have yet to see boaters materially reduce their boating. Currently we don’t have any way of projecting whether there will be lower activity.”
Company shares trading on the NASDAQ as WMAR were unchanged Thursday, closing at $10.83. The 52-week range is $8.37-$13.63
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