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Santa Cruz Sentinel
WATSONVILLE – The boating season finally picked up and West Marine watched second quarter net income climb more than 26 percent from this time last year, the company announced Thursday morning.
The unexpected boost spurred the boating supplies company to increase its guidance and stock climbed more than 66 cents, more than 6.8 percent, during the day.
The sales trends at the end of the quarter were very promising, said Geoff Eisenberg, chief executive officer and president of West Marine.
On a webcast conference call Thursday with investors and analysts, Eisenberg said the second quarter “was not for the faint of heart here at West Marine as things did not start out very well.” April and May revenues were weaker than anticipated mostly due to poor weather in the northern U.S. Finally Memorial Day brought better weather.
Preseason maintenance, electronics sales and salt water angler sales were strong, Eisenberg said. The company is also expanding its product lines including a line of women’s apparel.
An ongoing plan to replace smaller stores with fewer, larger stores continues with the closure of 10 stores and the opening or six during the first half of the year.
The company is on schedule to open its first 50,000-square-foot flagship store in Fort Lauderdale, Fla., at the end of the year. The new store will be double the size the company’s current largest store.
Eisenberg said he expected the boating market to remain flat or slightly up for the remainder of the year.
In other company business, the company recently announced its annual Marine Conservation Grants, awards of $30,000 to nonprofit organizations in Florida, North Carolina, New Jersey, Maryland and California which are working to improve and protect marine habitat.
In California, recipients include Save The Bay, a regional organization working to protect and restore San Francisco Bay, and The Sportfishing Conservancy, a group advocating catch and release fishing trips in Southern California.
AT A GLANCE
WHAT: West Marine is a retailer and wholesaler of boating supplies with 321 company-owned stores in 38 states, Puerto Rico and Canada and three franchised stores in Turkey.
HEADQUARTERS: 500 Westridge Drive, Watsonville.
INFORMATION: 728-2700; www.westmarine.com
: 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 about 4,700 employees.
STOCK: West Marine shares trading on the NASDAQ as WMAR were up about 66 cents Thursday, closing at $10.34. The 52-week range is $8.37-$13.48.
FINANCIALS: Second quarter net revenues were $40 million compared to $36 million the same period last year. Net income, which included a nearly $5 million tax benefit, was $44.7 million, or $1.92 per fully diluted share, compared to $35.1 million, or $1.52 per fully diluted share in the same period last year.
GUIDANCE: West Marine raised its expectations for the year, forecasting total revenues of about $640 million to $645 million, versus a previously-communicated $634 million to $640 million range. Earnings per share guidance increased to $1.05-$1.16 from 68 to 77 cents per share earlier this year and compared to 57 cents a year ago.