West Marine, Inc. on Thursday reported its financial results for the second quarter ended July 2, 2016.
The company reported net revenues of $251.6 million in the quarter, a decrease of 0.6 percent compared to the same period last year. Comparable store sales increased 1.1 percent. Pre-tax income was $36.4 million compared to pre-tax income of $37.1 million last year in the same period. Earnings per diluted share increased 1 cent to 86 cents per share.
“We are pleased with the progress of our growth strategies, including a 27 percent increase in eCommerce and solid increases in our Waterlife store sales," said CEO Matt Hyde. "These results were in contrast to a challenging retail environment and unfavorable weather patterns seen earlier in the quarter. We believe that our growth strategies have us on track to deliver our 2016 sales and profit targets.”
Further progress on growth strategies
- Sales from eCommerce increased by 26.7 percent compared to the second quarter of 2015 and represented 10.0 percent of total sales, compared to 7.9 percent for the same period last year
- Sales through Waterlife stores were 48.6 percent of total sales compared to 45.1 percent last year.
- Sales in merchandise expansion product lines, which include footwear, apparel, clothing accessories, fishing products and paddlesports equipment, increased 3.3 percent while core product sales were down 1.7 percent, compared to the same period last year.
Results for the second quarter of 2016
Net revenues for the quarter ended July 2, 2016 decreased by $1.6 million, or 0.6%, to $251.6 million compared to $253.2 million for the quarter ended July 4, 2015.
Gross margin declined slightly to 35.5 percent of revenues, compared to 35.8 percent during the same period in 2015. Selling, general and administrative (“SG&A”) expense decreased year-over-year by $0.8 million, as lower payroll expenses and a partial settlement from the Deepwater Horizon Settlement program were partially offset by higher depreciation and health claims expenses in the quarter.
Net income for the second quarter was $21.6 million, or $0.86 per share, compared to net income of $20.9 million, or $0.85 per share, for the second quarter of 2015.
Inventory at the end of the second quarter was down $4.5 million compared to the same period in 2015, while accounts payable increased $24.0 million. As of July 2, 2016, the company had cash and cash equivalents totaling $89.6 million compared to $44.2 million at the same point in 2015.
Results for the first six months of 2016
Net revenues for the six months ended July 2, 2016, increased by $1.8 million, or 0.5 percent, to $382.0 million compared to $380.2 million for the six months ended July 4, 2015. Comparable store sales for the period increased 1.6 percent compared to the first six months of 2015.
Gross margin expanded to 32.0 percent of revenues compared to 31.0 percent during the same period in 2015. SG&A expense increased year-over-year by $2.3 million as a result of higher expenses in the first half of the year from the company’s biennial training meeting and higher benefit expenses. These increases were partially offset by lower payroll expense and a partial settlement from the Deepwater Horizon Settlement program.
Net income for the first six months was $12.5 million, or $0.50 per share, compared to net income of $10.7 million, or $0.43 per share, for the first six months of 2015.