West Marine turning a corner?

WATSONVILLE, Calif. – After over a year of disappointing results, boating supplies retail chain West Marine, Inc. (Nasdaq:WMAR) was able to report yesterday that it met its expectations for the quarter.

However, whether this is the result of true progress made toward the company’s strategic initiatives, the development of more realistic expectations or, more likely, a combination of both is not yet clear. Last quarter, the company revised its expectations for the year downward.

Net sales for the 13 weeks ended September 30 were $195.6 million, an increase of 3.7 percent from net sales of $188.6 million for the same period a year ago. Comparable store sales for the third quarter of 2006 increased 2.4 percent. Net sales for the 39 weeks ended September 30 were $592.8 million, an increase of 4.5 percent from net sales of $567.5 million for the same period a year ago. Comparable store sales for the 39 weeks ended September 30 increased 2.8 percent.

Net sales attributable to West Marine’s stores division for the first nine months of 2006 were $523.8 million, an increase of $29.5 million, or 6.0 percent, compared to the same period last year. Port Supply (wholesale) division sales through its distribution centers for the first nine months of 2006 were $34.5 million, a decrease of $4.3 million, or 11.2 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 nine months of 2006 were $34.5 million, an increase of $0.2 million, or 0.6 percent, compared to the same period last year.

“It is encouraging to see our sales growing in the midst of an overall down cycle in the boating industry,” said Peter Harris, chief executive officer of West Marine. “Our third quarter sales results are generally as we expected during this difficult period.”

In related news, West Marine reported it will hold a conference call and webcast on Thursday, October 26 at 8:30 AM Pacific Time to discuss third quarter results. The live call will be webcast and available in real time on the Internet at www.westmarine.com in the “Investor Relations” section.

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