Sales fall 4.1 percent for West Marine

WATSONVILLE, Calif. – West Marine, Inc. reported its sales for the four weeks ended Aug. 28 were $56.8 million, a 4.1-percent decrease compared to net sales of $59.2 million for the same four-week period in 2003, the company said in a release yesterday afternoon.

Comparable store net sales for August decreased 6.4 percent compared to the same period a year ago, the company said.

But West Marine’s net sales for the 34 weeks ended Aug. 28, were $510.4 million, an increase of 6.5 percent over net sales of $479.5 million for the same period a year ago, and comparable store net sales for the latest 34 weeks increased 2.0 percent compared to the same period a year ago.

“Sales in August continued the soft trend that we first observed in the latter part of June,” John Edmondson, CEO of West Marine, said. “Late in the month, Hurricane Charley affected a number of stores in our Southeast region, including the closure of one store.

“Although our gross margin remained strong compared to last year, it was not enough to offset the lower sales. As a result, we do not expect to meet our previous earnings guidance for the third quarter of $0.43 to $0.44 per share. We will update our earnings guidance in mid-September, allowing us to consider activity over the important Labor Day weekend.”

Edmondson said over 70 percent of the merchandise West Marine sells is related to maintenance and repair, and as a result customers typically make purchases as the need arises.

“Consequently, it is becoming increasingly apparent to us that our comparable store sales over the entire year can usually be expected to remain relatively flat,” he said. “We remain committed to expanding our earnings by 18 to 20 percent annually. We believe that growing sales and earnings by gaining market share is the correct strategy and, toward this end, we are on track for opening 35 new stores this year and increasing our annual new store growth rate to between 50 and 55 new stores in 2005.”

Edmondson also said that beginning in 2005, West Marine plans to report its sales quarterly rather monthly, as the company believes this approach will better emphasize trends in the business and remove some of the short-term effects weather has in monthly sales results.

West Marine’s August comparable store sales by region were: Western (down 4.0 percent), Northeast (down 9.1 percent) and Southeast (down 4.5 percent).

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