West Marine Q3 income catapulted 81% to $5.3 million, or 24 cents per
share, but the boating retailer slashed its 2007 guidance due to lower
boat usage and boating market softness. Earnings guidance has been
revised to a range of 14 cents to 18 cents per share from a range of 24
cents to 34 cents previously. In the previous year, it earned 12 cents
a share.
West Marine said sales in the direct channel are anticipated to be
lower than previously forecasted, yielding total company sales of
approximately $681 million to $684 million as compared to previous
guidance of $683 million to $688 million. For the year, comparable
store sales guidance is narrowed to a decrease of between 1.5% and
2.0%. Previous guidance reflected a decrease of between 1.5% and 2.5%.
In addition to lower sales, the guidance reduction also reflects a
reduction in gross profit margins, and higher than anticipated expenses.
“At a higher expense, we are processing more merchandise through our
distribution centers to stores as we distribute more lower-priced
merchandise to achieve the same sales, and keep store shelves more full
for customers,” says Peter Harris, West Marine's CEO.
In Q3, net sales decreased 4.1% to $187.5 million, while comps
increased 0.3%. The year-ago third quarter included a $1.5 million
pre-tax, or four cents per share after-tax, charge for store closure
costs.
