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WATSONVILLE – Although sales climbed only slightly from a year ago, West Marine announced Thursday that third quarter profits increased 50 percent and the company was gearing up to open the biggest boating store in the U.S., a 50,000-square-foot flagship store in Fort Lauderdale, Fla.
The quarter’s numbers came in as expected, according to Geoff Eisenberg, company chief executive officer and president, who said the company has been undergoing major changes internally during recent years.
He credited the more than 4,000 associates at the company for being “the single biggest reason West Marine has been basically able to rebuild itself” and realize significant internal savings during the difficult economy.
The boating supplies company reported Thursday that it was debt-free, had a record $44 million cash in the bank, and although it is the end of the boating season in most areas of the country, will have five more stores open by the end of the year.
The Fort Lauderdale store will open Nov. 11, just in time for the holidays, Eisenberg said.
For several years, West Marine has been replacing smaller stores with consolidated larger, regional stores. By the end of the year, there will be a new 25,000-square-foot store in Honolulu, which is intended to serve the military and shoppers from Japan and the Pacific islands as well as typical boaters. There are also plans for 25,000-square-foot stores in Texas and Connecticut, as well as a one half that size in Biloxi, Miss.
Early marketing efforts to add boating apparel to its core boat supply business has been successful and would increase, Eisenberg said.
“We believe we have hardly scratched the surface in performance footwear and apparel,” he said to investors and analysts on a webcast conference call about the earnings.
Eisenberg reaffirmed the company’s guidance for the year of $640 million to $645 million in total revenues. He described the market as “tepid” and said the company would be conservative because the economy probably wouldn’t be giving it much help for awhile.
“We continue to be optimistic about our business, as exemplified by the upcoming opening, in just a few weeks, of our super-flagship store in Fort Lauderdale, which will be almost twice as large as any store we’ve ever done.”
Changes continue internally, Eisenberg said. Less immediately apparent to customers will be the company’s new technology which promises to integrate all of its sales channels, such as retail, internet and wholesale, into a single comprehensive point-of-sale system for all locations.
“Passion for boating does not die,” Eisenberg said. “It only recedes. We’re just getting started.”
ABOUT THE COMPANY
West Marine Inc.
WHAT: West Marine is a retailer and wholesaler of boating supplies with 319 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
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 about 4,100 employees.
STOCK: West Marine shares trading on the NASDAQ as WMAR spiked $1 Thursday, closing at $9.40. The 52-week range is $7-$13.48.
FINANCIALS: Third quarter net revenues were $180.3 million, compared to net revenues of $172.5 million a year ago. Net income was $11.22 million compared to $7.43 million a year ago. Diluted earnings per share were 48 cents compared to 32 cents a year ago.
GUIDANCE: West Marine maintained its expectations for the year, forecasting total revenues of $640 million to $645 million, net income (before taxes) of $18.5 million to $20 million and earnings per share of $1.05-$1.16.
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