West Marine ‘disappointed’ with sales in second quarter

WATSONVILLE — Bad weather in many parts of the country battered second quarter sales for West Marine, according to executives of the country’s largest boating supplies and services company. The company lowered its financial forecast for the year.

“This has been, not just a disappointing year, but a painful year and illustrates just how seasonal (and) weather-dependent we are,” said Matt Hyde, president and chief executive officer.

While comparable store sales were up in California, overall sales were down 2.8 percent from the same quarter a year ago. The largest factor was lower boat usage due to a cold, rainy and windy June season in many parts of the country.

Many boats, Hyde said, were still tied to the docks in June and are not likely to go into the water this year meaning those sales won’t be recaptured this year. The company reported that related industry metrics such as ramp fees, marina gas sales and boat slips usage fees are down from 15 percent to 30 percent.

“We also found that some of the changes we implemented this year yielded stronger bottom line results at the tradeoff of the top line,” Hyde told investors. “I think this is a very unusual year.” Hyde said, however, that long-term strategies are aimed at offsetting seasonal drops.

On a more positive note, the company reported that some areas of business, such as its wholesale business and boating-related services business, were doing well and the company seemed to be gaining market share in these areas. The company is also trimming costs and boosting sales in several key regions, Hyde said.

“With the majority of the boating season behind us we know that overall its been a disappointing year but we continue to see a number of bright spots giving us confidence in our business and our growth strategies.”

The company continued to push its e-commerce strategy, which resulted in a 21.5 percent jump domestically from a year ago and is now more than 6 percent of overall sales. The company is also continuing to consolidate its stores into bigger and better performing regional flagship and large format stores.

“The really important thing for us “… is how can we sort of step on the gas harder and really drive these growth strategies to move the needle more?” said Tom Moran, chief financial officer.


West Marine Inc.

WHAT: West Marine is a retailer and wholesaler of boating supplies and services with 294 company-operated stores located in 38 states, Puerto Rico and Canada and five franchised stores in Turkey.
HEADQUARTERS: 500 Westridge Drive, Watsonville.
INFORMATION: 831-728-2700; www.westmarine.com
EMPLOYEES: The company employs about 4,695 people, about 390 of who are local.
STOCK: West Marine shares on the NASDAQ closed down 18 cents Thursday to close at $11.42. The 52-week range is $9.30-$13.20.
FINANCIALS: Second quarter net revenues were $236.8 million, compared to net revenues of $243.6 million a year ago. Net income was $22.3 million, or 91 cents per diluted share, compared to $22.6 million, or 95 cents per share a year ago.

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