West Marine reports increased revenues, lower losses for quarter

West Marine reported improved results for the first quarter of 2015, but is still posting losses.

The company reported its financial results for the first quarter ended April 4, 2015, on Thursday.

Overall net revenues increased by 12.1 percent over 2014 to $127.1 million and comparable-store sales increased by 13.3 percent, although some that increase was due to a 53-week fiscal year in 2014 affecting season business, the company said.

Despite those gains, the company’s pre-tax loss was $18.1 million for the quarter (compared to $19.2 million in 2014) and earnings before interest, taxes, depreciation and amortization (“EBITDA”) was a loss of $13.0 million ($15.0 million in 2014).

“The 2015 boating season is off to a strong start and we are very pleased with our comparable store sales results in the first quarter,” West Marine CEO Matt Hyde said in a statement. “Our three key strategies performed well as a result of excellent execution by the entire West Marine team. Also, we introduced our first Super Sale in March, which drove top line sales and brought new customers into our stores. We believe we are well positioned for the peak boating in the months ahead.”

West Marine also reported progress on several of its growth initiatives

• eCommerce: Sales from eCommerce websites were up by 27.1 percent as compared to last year, and represented 9.3 percent of total sales, compared to 8.2 percent for the same period last year.
• Store optimization: Sales driven by West Marine’s store optimization strategy increased to 43.1 percent of total sales compared to 38.2 percent last year.
• Merchandise expansion: Sales in these product lines, which include footwear, apparel, clothing accessories, fishing products and paddle sports equipment, were up by 21.2 percent, with core product sales up 11.1 percent, compared to last year.

Pre-tax margin improved by 2.8 percent of revenues to -14.2 percent for the first quarter compared to -17.0 percent for the first quarter last year. This change was primarily driven by a decrease in selling, general and administrative expense of 3.5 percent of revenues, partially offset by a 0.8 percent lower gross profit margin driven by higher inventory shrinkage expense during the first quarter this year, the company said.

Net loss for the first quarter was $10.3 million, or $0.42 per share, compared to net loss of $11.0 million, or $0.46 per share for the first quarter last year.

Total inventory at the end of the first quarter was $256.6 million, an increase of $11.4 million, or 4.7 percent, versus the balance at March 29, 2014, and a 5.4 percent increase on an inventory per square foot basis.