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West Marine reports 2Q results

West Marine today reported an 11.5 percent increase in income before taxes for the second quarter of 2010, marking the company's seventh consecutive quarter of improved operating results versus the corresponding quarter of the prior year.

The company's income before taxes for the 13 weeks that ended July 3 was $36 million, an increase of $3.7 million from $32.3 million for the second quarter last year.

Earnings per share for the second quarter were $1.52, compared with $1.46 for the same period last year at the Watsonville, Calif.-based retailer. Earnings per share for the year to date were $1.12, compared with 75 cents for the same period last year.

"I think it's noteworthy that Q2 of 2010 was the seventh consecutive quarter in which we delivered improved operating results, versus the corresponding quarter of the prior year. We are pleased with these results, especially since the second quarter is West Marine's busiest of the year," CEO Geoff Eisenberg said in a statement.

"As we continue to evolve our company, the sales and earnings results we experienced during the first half of 2010 give us confidence we're on the right track," he added.

Net revenues for the quarter were $233.4 million, an increase of $18 million, or 8.4 percent, from $215.4 million for the corresponding period last year, with comparable-store sales increasing by $17.3 million, or 9.4 percent, from last year.

Stores that opened during 2009 and the first two quarters of 2010 increased revenues by $9.9 million, compared with last year.

Stores that closed during these same periods generated revenues of $8.8 million in the second quarter last year. The majority of the closings occurred in connection with the company's ongoing real estate optimization program.

The company opened its fifth flagship store, in Newport, R.I, in the second quarter this year. Large-format stores opened in Jensen Beach, Stuart and Fort Walton Beach, Fla.

"Sales during the second quarter appeared to benefit from changes in the competitive landscape, as well as from favorable weather in the Northeast. It also appears that the boating market was somewhat stronger overall, with more people using their boats more often than during the same period last year," West Marine said.

The company said its locations in the Southeast were affected by the Gulf oil spill.

"While not significant, there was a decrease in sales of merchandise to recreational boaters and fishermen in that area; however, this was offset by increased sales of products to those connected with fighting the spill," the company said.

Net revenues for the 26 weeks that ended July 3 were $342.9 million, an 8.4 percent increase from $316.3 million for the 26 weeks that ended July 4, 2009. Comparable store sales increased 9.1 percent from the same period a year earlier.

Gross profit for the 26-week period was $107.5 million, an increase of $12.5 million from the same period in 2009.

West Marine stock closed this morning at $11.00 a share. Its 52-week high and low are $13.63 and $6.81, respectively.

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