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WATSONVILLE—West Marine executives hailed double digit, year-to-date growth Thursday and announced that customers are embracing the boating company’s shift to a broader water lifestyle product mix.
Although third quarter revenues were down from a year ago, executives said it was largely due to a fiscal calendar shift that changed how the numbers were calculated compared to last year. Net income and earnings jumped 27.4 percent for the first nine months of the year.
“These results reflect solid boat usage in the summer and demonstrate that our key strategies are resonating with our customers,” said Matt Hyde, chief executive officer and president.
The company, which was originally founded as a mail order rope company and grew into a national boat supplies business, has, in recent years, moved from the seasonal world of the boat owner to the more general, year-round water sports and lifestyle customer. The company now provides more clothes, shoes, paddleboat equipment and fishing gear. The year-round products are selling well, Hyde said.
On a conference call with analysts and investors, Hyde pointed to stronger conversion rates and better online sales and said he was pleased to see higher year-over-year sales and profits.
The company, which once had more than 400 stores throughout the U.S. Canada and Puerto Rico, has been consolidating stores for several years and now has 265. This year, West Marine is expected to close a total of 20 stores and open four stores.
Yet, the number of customers grew 5.5 percent in the third quarter, Hyde said. In addition to drawing back lapsed customers, the company has attracted a slightly younger demographic and more women shoppers.
The work is far from being done, however, Hyde said.
“In going forward, our work will focus on accelerating our growth while dialing in appropriate refinements and business efficiencies,” he said.
West Marine Inc.
WHAT: West Marine is a retailer and wholesaler of boating supplies and water-related lifestyle products. The publicly held company has 265 stores in 38 states, Puerto Rico and Canada and operates full-service distribution centers in Hollister and Rock Hill, South Carolina.
HEADQUARTERS: 500 Westridge Drive, Watsonville.
INFORMATION: 728-2700; 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 3,902 people; about 352 people work in the Watsonville headquarters.
STOCK: West Marine shares on the Nasdaq closed down 9 cents Thursday to close at $10.16. The 52-week range is $7.65–$13.72.
FINANCIALS: Net revenues for the third quarter were $194.4 million compared to $196.5 million a year ago. Net income was $4.89 million, or 20 cents per diluted share, compared to $4.94 million, or 20 cents per diluted share, a year ago. Because of the company’s fiscal calendar, fiscal year 2015 was one week shorter than FY 2014.
GUIDANCE: The company lowered its guidance for the year. Pretax income is expected to $6 million to $8 million, down from a previous guidance of 6 million to $11 million. Diluted earnings per share is expected to be 14-20 cents, lowered from 14-27 cents per share.
This article appeared in the Santa Cruz Sentinel.