WATSONVILLE, Calif. – Net revenues may have declined at boating supplies retailer West Marine, Inc. (Nasdaq:WMAR) during the third quarter ended Oct. 3, but that hasn’t discouraged the company’s management team.
“We had planned for considerably lower revenues, so we’re quite pleased with our third quarter sales results,” said West Marine CEO Geoff Eisenberg. “We experienced a number of favorable impacts on our business including continued improvement in boat usage, continued movement towards do-it-yourself projects, continued good results from our product expansions and larger store formats, favorable weather conditions in most markets, and continued progress in attracting customers who previously shopped at now-closed competitors.”
While Eisenberg said the company’s stores fared rather well in the third quarter, he pointed out that the segments of its business related to serving new boat manufacturers and dealers continued to be soft.
“Though there were some glimmers of strength in certain markets, we would not say there has been a meaningful change in trend in this area as of yet,” he commented. “Fortunately, we have concentrated on supporting the maintenance and improvement of existing boats, and not relied on new boat sales to drive our revenues.”
Calendar shift impacts results
West Marine’s net revenues during the third quarter decreased by 6.7 percent to $168.2 million, the company reported in a recent statement. This compares to net revenues of $180.2 million during its 2008 fiscal third quarter.
Comparable store sales decreased by $6.3 million, or 4.3 percent, from last year, according to West Marine.
“The calendar shift versus last year obviously makes the analysis of our numbers more difficult,” explained Eisenberg. “While we benefited from the calendar shift during the first half of 2009, our reported sales are negatively impacted by the shift in the second half of the year.”
Adjusted for the impact of a fiscal calendar shift due to a 53-week 2008 fiscal year, 2009 fiscal third quarter net revenues would have increased by $0.3 million, or 0.2 percent, and comparable store sales would have increased by $5.1 million, or 3.7 percent, over last year, according to the company.
Since West Marine’s sales typically build week-over-week leading up to the peak of boating season, the fiscal calendar shift from last year meant that there were fewer peak season days in the third quarter of this year, which negatively affected comparable store sales comparisons, the company explained. In addition to the calendar shift impact, the move of the Fourth of July holiday from the third fiscal quarter in 2008 to the second fiscal quarter in 2009 further affected the quarter. Stores closed during the third and fourth quarters of 2008 and first three quarters of 2009 reduced net revenues by $8.9 million versus last year, but this decline was largely offset by $5.9 million of net revenues from new stores opened during the third and fourth quarters of 2008 and first three quarters of 2009, stated West Marine.
Net revenues in the stores segment for West Marine’s 2009 fiscal third quarter were $151.4 million, a decrease of $8.4 million, or 5.2 percent, compared to same period last year. Adjusted for the impact of the fiscal calendar shift, net revenues improved by $3.6 million, or 2.4 percent, with comparable store sales increasing by 3.7 percent or $5.1 million, the company reported. Store closures in 2008 and the first nine months of 2009 reduced net revenues by $8.9 million versus last year, but largely was offset by $5.9 million of net revenues from new stores opened, according to West Marine.
Its Port Supply (wholesale) segment revenues through the distribution centers for the third quarter of 2009 were $7.5 million, a decrease of $2.4 million, or 24.3 percent, compared to the same period last year. This comparison was not affected materially by the calendar shift, according to West Marine. Port Supply sales to wholesale customers through store locations are included in the Stores segment.
Net revenues in the Direct Sales segment for the fiscal third quarter of 2009 were $9.2 million, a decrease of $1.3 million, or 12.4 percent, compared to same period last year, the West Marine reported. Excluding the impact of the fiscal calendar shift, net revenues declined by $0.9 million, or 8.7 percent, over last year.
Net revenues for the 39 weeks ended Oct. 3 were $484.5 million, a decrease of $35.7 million, or 6.9 percent, from net revenues of $520.2 million for the same period a year ago, primarily due to a comparable store sales decline of 3.4 percent, or $14.4 million. There was a further decrease of $22.7 million from store closures in 2008 and the first nine months of 2009, partly offset by $13.8 million of net revenues generated by new stores, West Marine reported. Net revenues comparisons for the first nine-month period were not affected materially by the fiscal calendar shift.