West Marine reports 3Q results

West Marine reported double-digit earnings growth year-to-date.
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West Marine reported double-digit earnings growth year-to-date, with net income of $15.6 million in the third quarter and earnings per share of $0.63, compared to $12.2 million and $0.50 last year.

For the first nine months of the year, pretax income was $27.6 million, an increase of 20.1 percent, compared to pretax income of $23 million last year.

Net revenues for the first nine months of fiscal 2015 were $574.6 million, an increase of 5.2 percent compared to last year.

Sales from the e-commerce website increased by 25.1 percent, compared to last year, and represented 8.3 percent of total sales, compared to 7 percent for the same period last year. The company said it aims to increase the percentage of e-commerce sales to 15 percent by the end of 2019.

“The West Marine team is delivering strong results, with good top-line sales from our strategies flowing through to double-digit earnings growth year-over-year,” West Marine CEO Matt Hyde said in a statement. “As we wrap up the core boating season, our associates are now focusing on expanding our holiday presence, with new gift items and compelling offers for our customers.”

Due to the impact of a calendar shift, compared to 2014, net revenues for the third quarter decreased by $2.1 million, or 1.1 percent, to $194.4 million, compared to $196.5 million for the third quarter of 2014.

Comparable store sales decreased by 0.7 percent for the third quarter.

Sales comparisons were negatively impacted this year from a shift in the fiscal calendar following a 53-week fiscal year, decreasing sales by approximately 6 percent.

The calendar shift affected the company’s key selling season, moving the selling period leading up to July 4 to the second quarter, compared to July 4 being part of the third quarter last year.

Comparable store sales guidance was revised up, and is expected to be in the range of 3.5 to 5.5 percent, up from a previously issued range of 1 to 4 percent.

“Our comparable store sales are trending to the high end of our original guidance. However, we are experiencing lower than anticipated gross profits,” the company said. “The lower gross profits have been driven by increased inventory shrinkage and a charge for a product quality issue. Additionally, we had higher than expected clearance sales resulting from the successful launch of our ship-from-store program and the liquidation of inventory associated with the closure of our stores in Canada.”

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