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West Marine reports 1Q results

West Marine Inc. reported first-quarter net revenue of $130.4 million, an increase of 2.6 percent from the same period last year.

The company said comparable-store sales increased 2.7 percent for the quarter that ended April 2.

“West Marine had a quarter that exceeded expectations on several fronts,” West Marine CFO Jeff Lasher told investors and analysts during a conference call to discuss first-quarter earnings. “And we've made progress to improve profitability in future quarters. We've also made strides to improve cash flow from operations to improve balance sheet initiatives.”

The company reported a first-quarter loss of $9.1 million, or 37 cents a diluted share, compared with a loss of $10.3 million, or 42 cents a share, in the quarter a year earlier. Its pretax loss was $15.2 million, compared with $18.1 million last year.

Sales from eCommerce increased 32.3 percent, compared with the quarter a year earlier, and represented 11.9 percent of total sales, compared with 9.3 percent for the same period last year, showing progress toward a goal of 15 percent of total sales.

Sales through waterlife stores were 52.8 percent of total sales, compared with 49.4 percent last year. The company said the year-over-year increase demonstrates the company’s progress toward its goal of delivering 50 percent of total sales through stores that have been optimized to offer a broader selection of merchandise than traditional stores that focus on core boating products.

“We were particularly satisfied with the results, as we are up against a 7 percent comparable increase for the first quarter of 2015,” CEO Matt Hyde said during the call. “For the first quarter, sales were lifted by year-over-year conversion rate increases, both in-store and online.”

Regionally, northern districts had stronger sales than those in the Southeast, mainly driven by weather, Hyde said.

Sales in merchandise expansion product lines, which include footwear, apparel, clothing accessories, fishing products and paddle sports equipment, increased 6.9 percent, and core product sales were up 0.9 percent from the same period last year.

“In the past 24 months our product mix has changed dramatically, with both our core boating and merchandise expansion categories,” Hyde said. “Our merchandise expansion products, which include pedal sports, fishing gear and apparel, are helping to redefine West Marine as a broader waterlife outfitter.”

“We are pleased with the first-quarter comparable store sales, including a 32 percent increase in eCommerce revenue,” Hyde said in a statement. “The team continues to succeed in positioning product and services to meet the changing needs of our customers, while at the same time improving profitability. This resulted in our gross margin expanding by 400 basis points, compared to the same period last year.”

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