West Marine sales meet expectations

WATSONVILLE, Calif. – Boating supplies retail giant West Marine, Inc. (Nasdaq: WMAR) saw its net sales for the fourth quarter ended Jan. 3 decline 6.1 percent and its net sales for the 53 weeks decline 7.1 percent. However, the company was pleased with its performance, given the conditions in which it’s operating.

“Sales levels in the fourth quarter were in line with our expectations,” said Geoff Eisenberg, Chief Executive Officer of West Marine. “While the challenging economic conditions, which have affected boat usage and thus our customer traffic and sales, were very difficult, we are pleased with our overall sales performance in Q4 and for 2008 in total.”

Net sales for the fourteen weeks ended Jan. 3 were $111.1 million, a decrease of $7.2 million from net sales of $118.3 million for the thirteen weeks ended Dec. 29, 2007, according to a statement from the company yesterday.

The company attributed the decline primarily to a $4.9-million decrease in comparable store sales. Comparable store sales for the fourth quarter decreased 5.1 percent. As compared to the corresponding fourteen-week period a year earlier, comparable store sales decreased 9.9 percent, West Marine stated.

Net sales for the fifty-three weeks ended Jan. 3 were $631.3 million, a decrease of $48.3 million from net sales of $679.6 million for the fifty-two weeks ended Dec. 29, 2007, primarily due to a $38.2 million decrease in comparable store sales and a $7.1 million sales decrease attributable to stores that were closed in 2007, according to the company. Comparable store sales for the fifty-three weeks ended Jan. 3 do not include net sales of $6.4 million from new stores and $7.3 million from remodeled or expanded stores. Comparable store sales for the fifty-three weeks ended Jan. 3 decreased 6.8 percent. As compared to the corresponding fifty-three week period a year earlier, comparable store sales decreased 7.6, the company explained.

Net sales attributable to West Marine’s Stores segment for the fourth quarter of 2008 were $95.3 million, a decrease of $6.1 million, or 6.0 percent, compared to the thirteen weeks ended Dec. 29, 2007, the company reported. The sales decrease primarily was due to a $4.9 million decrease in comparable store sales, according to West Marine.

Port Supply (wholesale) segment sales through the distribution centers for the fourth quarter of 2008 were $7.7 million, a decrease of $0.1 million, or 1.2 percent, compared to the thirteen weeks ended Dec. 29, 2007. Port Supply sales to wholesale customers through its retail store locations are included in the Stores segment.

Net sales in the Direct Sales segment for the fourth quarter of 2008 were $8.1 million, a decrease of $1.0 million, or 10.6 percent, compared to same period last year.

Losses estimated to be lower than expected

West Marine also shared its preliminary estimate of 2008 full year results – an after-tax loss range of $0.44 to $0.50 cents per share. This is an improvement compared to previously-communicated guidance of an after-tax loss of $0.55 to $0.65 per share, according to the company. The revised range does not include the following:

Including the above items, West Marine said it anticipates an after-tax loss of $1.84 to $1.90 per share for fiscal 2008. In addition, the impact of the ongoing SEC investigation is not included.

This improvement in results was driven by lower-than-expected restructuring charges and reduced operating expenses, the company reported.

“Through the outstanding efforts of our associates, we have successfully completed the restructuring effort announced earlier this year, and we are well prepared for 2009,” Eisenberg added. “We remain focused on execution, managing both operating and capital expenses, and generating cash flow, which are all especially critical during these turbulent times.”

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