Higher sales, lower margins for West Marine

swadminJanuary 6, 2006

WATSONVILLE, Calif. – Aggressive advertising and sales promotions led boating supplies and accessories retailer West Marine, Inc. (Nasdaq: WMAR) to report better than expected sales for the fourth quarter, but lower than expected margins, according to a recent company statement.

Peter Harris, CEO of West Marine, said this was “primarily due to deep promotional pricing and a greater proportion of sales from lower margin electronics.”

As a result, it lowered its earnings estimates for fiscal year 2005 to range from $0.20 to $0.25 per share.

This news came in the wake of a disappointing third quarter attributed to the “significant negative impact” of hurricanes and continued high fuel prices.

For the thirteen weeks ended December 31, West Marine net sales were $124.8 million, an increase of 5.7 percent from net sales of $118.1 million a year ago. Comparable store sales for the fourth quarter of 2005 increased 3.9 percent, compared to a comparable store sales decrease of 3.3 percent reported for the fourth quarter a year ago.

Fourth quarter comparable store sales were up 3.9 percent in the Northeast, 1 percent in the Southeast and 8.9 percent in the West.

Net sales for the fifty-two weeks ended December 31 were $692.2 million, an increase of 1.4 percent from net sales of $683.0 million for the same period a year ago. Comparable store sales for the latest fifty-two weeks decreased 2.2 percent, compared to a comparable store sales increase of 0.3 percent reported for the same period a year ago.