WATSONVILLE, Calif. - Bad weather in June and mixed results from new strategic initiatives led to second quarter earnings that failed to meet West Marine's (Nasdaq: WMAR) expectations.
With that said, the results reflected an improvement over the previous year. The boating supplies retail chain's net sales for the 13 weeks ended July 1 were $264.5 million, an increase of 4.3 percent from net sales of $253.5 million for the same period a year ago.
Comparable store sales for the second quarter of 2006 increased 2.3 percent. Net sales for the 26 weeks ended July 1 were $397.2 million, an increase of 4.8 percent from net sales of $378.9 million for the same period a year ago. Comparable store sales for the 26 weeks ended July 1, 2006 increased 3.1 percent.
Net sales attributable to the retailer's stores division for the first six months of 2006 were $350.0 million, an increase of $21.1 million, or 6.4 percent, compared to the same period last year. Port Supply (wholesale) division sales through the company's distribution centers for the first six months of 2006 were $23.9 million, a decrease of $3.0 million, or (11.0 percent), compared to the same period last year, primarily due to increased sales to Port Supply customers through our store locations, which are included in stores sales. Net sales of the company's Direct Sales division for the first six months of 2006 were $23.4 million, an increase of $0.2 million, or 0.8 percent, compared to the same period last year.
"While we are encouraged by the positive comparable store sales results, they are below our expectations and internal projections,” commented Peter Harris, chief executive officer of West Marine. “Most of our stores reported positive comp sales in the second quarter. However, the majority of our northeast and mid-Atlantic locations were negatively impacted by unusually heavy rainfall during June, which is our biggest revenue month. Additionally, we experienced mixed results from our new initiatives. As a result of the sales shortfall in the second quarter, we expect to revise our full year 2006 guidance and discuss progress on our strategic initiatives when we report our second quarter operating results."
West Marine will hold a conference call and Web cast on Tuesday, August 8 at 8:30 AM Pacific Time to discuss second quarter results and revised full year 2006 earnings guidance. The live call will be Web cast and available in real time on the Internet at www.westmarine.com in the "Investor Relations" section.
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