West Marine reports 4Q, year-end results

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West Marine reported 2016 net income of $6.5 million, which it said was a 44.6 percent increase from the previous year.

The profit amounted to 26 cents a diluted share, compared with 18 cents a share in 2015.

Net revenue for the year totaled $703.4 million, a decrease of 0.2 percent from $704.8 million the previous year, the company said Thursday. Comparable-store sales increased by 0.8 percent in 2016, and income before income taxes was $11.6 million, an increase of 59.1 percent from the previous year.

Earnings before interest expense, income tax expense, depreciation and amortization increased to $34 million, compared with $28.3 million in 2015.

“I’m pleased with how the team has continued to execute on our strategies while driving higher profitability,” said West Marine CEO Matt Hyde in a statement.

“Of note, our overall pretax profits increased 59 percent on flat sales. These results reflect our vigilance in improving the customer experience, increasing our margins by closing underperforming stores, implementing targeted expense structure improvements, focusing on waterlife store expansion and improving our omni-channel business.”

The company said its gross profit for 2016 increased 1.8 percent, from $202 million in 2015 to $205.7 million last year; selling, general and administrative expenses decreased 0.3 percent, from $194.3 million to $193.6 million.

Net revenue for the fourth quarter, which ended Dec. 31, decreased by $700,000, or 0.5 percent, to $129.5 million, compared with $130.2 million the previous year. Comparable-store sales decreased 1 percent in the fourth quarter from the previous year.

Gross profit for the quarter increased 0.5 percent, from $28 million in 2015 to $28.2 million in 2016; selling, general and administrative expenses decreased 6.8 percent, from $48.3 million to $45 million.

West Marine said it had a net fourth-quarter loss of $9.8 million, or 39 cents a basic share, compared with a loss of $11.1 million, or 45 cents a share, in the 2015 quarter.

The company said it expects net revenue to increase by 1 to 2 percent this year. The revenue growth, combined with continued expense control, is expected to improve profitability.

The company expects pretax profits to be up from $11.6 million in 2016 to a range of $13 million to $16 million this year.

“We are looking forward to 2017, as a number of our initiatives continue to produce results for the company overall,” Hyde said. “We project an increase in profitability driven by cost controls, incremental revenue gains and improvements in margin management.”

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