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West Marine reports 4Q, year-end results

West Marine reported an increase in fourth-quarter sales, but posted an $11 million loss to end a year that disappointed the California-based boating supplies and accessories retailer.

Net revenue was $118.8 million for the quarter that ended Dec. 28, compared with $118.2 million in the same quarter the previous year. The company reported a loss for the quarter of $11.2 million, or 46 cents a diluted share, compared with a loss of $11.7 million, or 50 cents a share, a year earlier.

For the full year, the company reported net revenue of $663.2 million, 1.8 percent less than $675.3 million in 2012. Comparable-store sales also decreased by 1.8 percent. The company said direct-to-consumer sales increased by 15.7 from the previous year, driven by strategic investments in eCommerce.

Net income for the year was $7.8 million, or 32 cents a diluted share, compared with $14.7 million, or 62 cents a share, the previous year. Excluding the impact of a $1.7 million valuation allowance recorded during the second half of the year, which resulted from a California tax law change, net income for the full year would have been $9.5 million, or 39 cents a share.

"I would characterize 2013 as a challenging year due to the unusually cold, rainy and windy weather in many of our markets during the first half of the year,” West Marine CEO Matt Hyde said in a statement. “We were disappointed in the results, but we have continued to make great progress with our three key growth strategies: eCommerce development; merchandise expansion; and store optimization. Our growth strategies continue to evolve West Marine into a waterlife outfitter by offering broader product selections, a more appealing in-store experience and ease of shopping options.”

The company projected that 2014, a 53-week fiscal year for West Marine, will see net revenue of $695 million to $710 million, an increase of 4.8 percent to 7.1 percent from 2013.

It also forecast comparable-store sales growth of 3.5 to 6 percent for the year and earnings per share of 39 to 45 cents. The predictions were based on the company’s implementation of what it calls the “15/50 plan,” a three- to five-year plan that will accelerate investments in strategic growth initiatives. That includes capital expenditures of $30 million to $34 million in 2014.

“Successful execution of this plan, supported by our merchandise expansion strategy, should deliver incremental sales and operating margin improvement,” the company said in a statement.

“The first number in the 15/50 plan refers to our objective to grow our eCommerce business to 15 percent of total sales. The second number reflects our expectation that sales derived from consolidated or revitalized stores will grow to 50 percent of total sales. The 15/50 plan represents the diversification of West Marine, positions us to realize higher profitability and to be less seasonal and weather-dependent, and allows us to serve our customers' lives more completely as a waterlife outfitter.”



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