West Marine reports 2017 2Q results

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Retailer West Marine reported a net second-quarter profit of $21 million, slightly less than it earned in the same quarter last year.

The company said net income for the period that ended July 1 was $21.2 million, or 84 cents a share, compared with $21.6 million, or 86 cents a share, for the comparable quarter in 2016.

Second-quarter 2017 net revenue was $247.2 million, a decrease of 1.7 percent from the same period last year. Comparable-store sales were down 1.2 percent and pretax income was $36 million, compared with $36.4 million a year earlier.

The company said it incurred expenses during the quarter of $1.4 million associated with its pending merger with private-equity firm Monomoy Capital Partners and recorded a $600,000 charge related to the reclassification of accumulated foreign currency translation balances to selling, general and administrative expense as a result of cessation of operations in Canada.

Those charges were partially offset by a $1.1 million credit related to a supplier refund for prior-year overbilling. Adjusting for these unique events, the company said it improved second-quarter pretax profit by $700,000.

Gross margin improved to 36.5 percent, compared with 35.5 percent during the 2016 quarter. Lower promotional and clearance activity, along with lower professional sales as a percentage of total revenue, resulted in the improved margin, the company said.

Selling, general and administrative expense increased year over year by $1.4 million, primarily because of $1.4 million in merger-related expenses.

Inventory at the end of the second quarter was $243.4 million, down $10.2 million from the same period in 2016.

As of July 1 the company had cash and cash equivalents totaling $113.3 million, compared with $89.6 million at the same point in 2016.

The company said its net income for the first six months this year was $14 million, or 55 cents a share, compared with $12.5 million, or 50 cents a share, at the same time last year.