West Marine reported an increase in net income and net revenues for fiscal 2011 and announced it ended the year debt-free.
“Our strong results for 2011 reflect continued progress in executing our focused strategies to drive higher sales and profit and position us very well for 2012,” West Marine CEO Geoff Eisenberg said in a statement. “Due to the success of our many initiatives, from our new store formats to our new merchandise assortments, we have a great deal of optimism about our future.”
Pretax income for fiscal 2011, which ended Dec. 31, was $21.2 million, 49 percent higher than pretax income of $14.2 million in fiscal year 2010. Net income for the year was $29.7 million, or $1.27 a diluted share. This was an improvement of $16.5 million from net income in 2010 of $13.2 million, or 57 cents a diluted share.
Net revenues for fiscal 2011 were $643.4 million, a 3.3 percent increase from net revenues of $622.8 million for fiscal 2010.
Comparable-store sales increased 2.3 percent, compared with the previous year. The primary driver of growth was increased sales to Port Supply (wholesale) customers through its store locations as part of West Marine’s efforts to better serve this group and to leverage store facilities.
Real estate activity connected with the company’s real estate optimization strategy drove an $8.9 million increase in net revenues, as stores that opened during the fourth quarter of 2010 and during 2011 generated $39.9 million in net revenues, whereas stores that were closed during those periods effectively reduced net revenues by $31 million, West Marine said.
Gross profit for 2011 was $185 million, an increase of $9.4 million, compared with 2010. As a percentage of net revenues, gross profit margin rose 0.6 percent, to 28.8 percent, compared with a gross profit margin of 28.2 percent last year. The increase was primarily attributable to a 0.3 percent reduction in unit buying and distribution costs and a 0.2 percent improvement in inventory shrink.
Net revenues for the fourth quarter were $113.4 million, an increase of $6.1 million, or 5.7 percent, compared with net revenues of $107.3 million for the corresponding period in the previous year. Comparable-store sales increased by $3.5 million, or 4.3 percent, compared with the previous year.
The company reported a fourth-quarter net loss of $14 million, or 61 cents a diluted share, compared with a loss of $19.8 million, or 88 cents a share, a year earlier.
West Marine’s earnings guidance for 2012 currently assumes that the market for boating supplies and related merchandise will remain relatively flat. The company anticipates total sales to be in the range of $660 million to $676 million, with comparable-store sales growth of 0.5 percent to 2.5 percent.