West Marine reports 4Q, year-end results

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West Marine continued its trajectory of growth in the fourth quarter and for fiscal 2015 and said it anticipates a pretax profit increase of more than 50 percent in 2016.

The company said it continued its overhaul of existing stores, closings of underperforming stores and its focus on e-commerce.

“Our updated store experience, new product assortments and high-quality service culture, along with momentum in our e-commerce business, resulted in a very strong fourth-quarter business and a full year that beat our expectations,” CEO Matt Hyde said Thursday during a conference call with investors and analysts.

Net revenue for fiscal 2015, which ended Jan. 2, was $704.8 million, an increase of 4.3 percent from the 53-week period last year and an increase of 5.4 percent from the first 52 weeks of 2014.

Adjusted earnings before interest, taxes, depreciation and amortization increased to $29.5 million, compared with adjusted EBITDA of $22.6 million last year.

Net income and earnings per share were $4.5 million and 18 cents, respectively, compared with $1.9 million and 8 cents last year — a 132 percent increase in net income.

“The strength of our business in 2015 was driven by the continued execution of our three growth strategies — store optimization, e-commerce and merchandise expansion,” Hyde said. “These three strategies are focused on repositioning West Marine to appeal to a broader base of customers and to serve our current customers with a wider set of products for their life on the water.”

The focus on online sales helped the company outperform expectations on holiday sales, which were up 9.4 percent.

“The work of repositioning West Marine started three years ago when we recognized the megatrends impacting the retail industry,” Hyde said.

“We envisioned that the future of retail meant fewer but better stores, the customers were going to demand excellence at e-commerce and that retailers couldn't simply focus on the transaction, but they needed to serve the customer broadly and become an integral part of their lives. Since we started this work, West Marine has made significant progress in updating and improving our store fleet. In 2015 we opened three new stores and revitalized 14 locations. Five of those locations were completed in the fourth quarter. Revitalization consists of light remodeling, space optimization, product assortment changes and associate training. We continue to see strong performance when we revitalize the store with a positive comp growth spread in excess of 8 percent over controlled stores.”

The company said fourth-quarter revenue rose by $800,000, or 0.6 percent, to $130.2 million, from $129.4 million in the quarter a year earlier. Despite negative pressure of 2 percent from the shift in the fiscal calendar following a 53-week fiscal year in 2014, comparable store sales increased 8 percent when comparing the 13 weeks of the 2015 quarter with the first 13 weeks of the 2014 quarter.

West Marine reported a fourth-quarter loss of $11.1 million, or 45 cents a share, compared with a loss of $10.3 million, or 42 cents a share, in the 2014 quarter. The company said the increased fourth-quarter loss primarily was driven by higher variable compensation expense and non-recurring charges to reduce overhead employment expenses.


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