West Marine: Sales don't meet expectations
Posted on 10 July 2008
West Marine today reported an 8.3 percent drop in sales for the second quarter ending June 28 because of continued weakness in the U.S. marine market.
“Net sales results during the second quarter were below our expectations,” said CEO Geoff Eisenberg in a statement. “Now that we are in the peak boating season, we continue to see softness throughout our U.S. markets. While our international business has continued to be strong, it’s a relatively small part of our overall sales mix.
“Fuel prices and the weak economy have absolutely affected boat usage, which in turn negatively impacts traffic to our stores and Web site,” Eisenberg added.
Net sales fell to $226.7 million, from $247.1 million in the year-ago quarter. This was primarily because of a $16.4 million, or 7.8 percent, decline in same-store sales in the second quarter.
Net sales for the six-month period ending June 28 dropped 8.8 percent to $339.9 million, from sales of $372.9 million for the same period a year ago. This was primarily because of a $25.8 million sales decrease in same-store sales, or 8.4 percent, and a $7 million sales decrease attributable to stores that were closed in 2007. Same-store sales for the recent six-month period do not include net sales of $9.2 million from new stores and $3.7 million from remodeled or expanded stores.
Net sales attributable to the company’s stores segment for 2008 second quarter fell 9.2 percent to $198.6 million. The decrease primarily was because of a $16.4 million drop in same-store sales and $4.1 million of prior-year sales at closed stores.
Port supply, the wholesale segment, had a 4.1 percent decline in sales, to $12.8 million, compared to the 2007 second quarter. Net sales in the direct-sales segment for the recent second quarter fell 5.1 percent to $14.3 million.
Eisenberg said West Marine executives will discuss their plans for “successfully navigating through this challenging environment” in the company’s second-quarter earnings conference call and Webcast scheduled for July 24 at 11:30 a.m. EDT.