Q2 sales and profits climb for West Marine

IMG_8505Company founder Randy Repass steps down from chairmanship after 37 years

WATSONVILLE—Stronger second quarter sales numbers show that business strategies to broaden its niche boater customer base are working, West Marine’s top executive said Thursday.

“We’re making great progress in providing a more consistent and improved experience both in store and online as we continue West marine’s transition to a broader water life outfitter,” Matt Hyde, chief executive officer and president, said during a conference call with investors and analysts Thursday.

Total company sales, profits, comparable store sales and online sales were all up for the quarter compared to a year ago. The investments — store remodeling, online technology, a product offering expansion, and new marketing campaigns — all contributed to better sales, Hyde said. Better overall weather and an improved economy also helped boost sales.

The company also announced that it broke a 10-year standing record for single day store sales on the Friday before Independence Day. Hyde noted that the company had 50 percent more stores 10 years ago.

The company reported initial success with several key initiatives in test stores.

While pleased, Hyde said there was still “a long way to go to be top of mind for this broader set of water life products.”

Other bright spots for the company include a 25 percent jump in Internet sales, a new ship from store program that increases product offerings, and a shift to digital marketing.

“We’ve now experienced six straight quarters of active customer growth after a very long period of decline,” Hyde reported.

Repass steps down after 37 years

In other company news, company founder, former chief executive and president Randy Repass is stepping down from serving as chairman of the board of directors, a position he has held since 1968. Repass owns more than 26 percent of company stock. He served as the company’s chief executive officer from 1968 to April 1995 and for five months in 1998. He also served as president from 1968 to 1990 and from August 1993 to March 1994.

In a letter to stockholders, he said he will stay active in the company business but wants to spend more time on other interests such as marine conservation. “I’m looking forward to spending time with my family, cruising in beautiful places, “product testing” and talking to customers,” he wrote.

Barbara Rambo, who has been on West Marine’s board since 2009, was unanimously appointed by the board to serve as its new chair. Rambo served as head of national commercial banking for Bank of America and as chief executive officer of Nietech Corp. and OpenClose Technologies. Since 2009, she has served as the CEO of Taconic Management Services. She sits on the board of PG&E Corp. and is chair of the Finance Committee and as a member of the Compensation and Nominating and Governance committees.

New executive

The company also hired a new executive, Paul Rutenis, formerly of Radio Shack, to serve as executive vice president of Merchandising, Replenishment & Logistics. Rutenis will receive an annual base salary of $400,000, a one-time sign-on bonus of $75,000, up to six months of temporary housing, moving costs, and a $10,000 relocation payment, in addition to bonuses, incentives and stocks.

 

West Marine Inc.

WHAT: West Marine is a retailer and wholesaler of boating supplies and water-related products. The publicly held company has 279 stores in 38 states, Puerto Rico and Canada and operates full-service distribution centers in Hollister and Rock Hill, SC.

HEADQUARTERS: 500 Westridge Drive, Watsonville.

INFORMATION: 728-2700; http://www.westmarine.com

HISTORY: Founded by Randy Repass in 1968 as a mail order business. The first store opened in 1975. The company went public in 1993.

LEADERSHIP: Matt Hyde, president and chief executive officer.

EMPLOYEES: The company employs about 4,472 people; about 347 work in the Watsonville headquarters.

STOCK: West Marine shares on the Nasdaq closed up 27 cents Thursday to close at $9.07. The 52-week range is $8.50-$13.72.

FINANCIALS: Revenues for the second quarter were $253.18 million, compared to $236.48 a year ago in the same quarter. Net income was $20.9 million, or 85 cents diluted earnings per share, compared to $18.3 million, or 75 cents per share last year. The company is debt-free and has $115.5 million available on revolving credit.

BASE 2014 SALARY OF CEO & SENIOR VICE PRESIDENTS: $600,000 and $320,000 to $400,000, respectively.

GUIDANCE: The company reaffirmed its previous forecast for the year of $6 million to $11 million in sales and earnings per share of 14 to 27 cents. Comparable store sales are expected to climb 1 to 4 percent for the year.

This article was first published in the Santa Cruz Sentinel.

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