West 49 Inc., Canada‘s action sport retailer, reported sales for the second quarter ended July 26 rose 6.1% to $45 million. Comparable store sales climbed 3.9% on a consolidated basis. Comps rose 6.2% at the West 49 banner, representing the strongest performance of the past six quarters.


 


Gross margin for the quarter decreased 10.3% to $9.6 million from $10.7 million a year ago. As a rate to net sales, gross margin decreased 390 basis points to 21.3% for the quarter as products were strategically priced to better position the Company heading into the Back-to-School selling season.


 


EBITDA loss for the quarter was $0.6 million compared to positive EBITDA of $0.9 million, normalized, for the same quarter last year. Selling, general and administrative expenses increased $0.5 million, however was 20 basis points lower as a rate to net sales, representing an improvement compared to the same quarter last year on a normalized basis. The company remains focused on managing costs, specifically with respect to store payroll as the company absorbs mandatory minimum wage increases in most provinces.


 


Net loss for the quarter was $1.8 million, or 3 cents per share, compared to normalized net loss of $0.5 million, or $0.01 per share, for the second quarter of last year. Net loss per share is based on a weighted average of 63,544,818 common shares outstanding during the quarter compared to 63,254,236 during the second quarter of fiscal 2008.


 


“Our top line growth for the quarter is the result of our exceptional branded offering at prices competitive with like retailers on both sides of the border,” said Sam Baio, Chief Executive Officer of West 49 Inc. “Strong sales from our core West 49 banner, including stores in the challenging Ontario market, drove growth in our consolidated comparable store sales. While cross border shopping still had somewhat of a dampening effect on our results, it has also benefited us in forcing our Company to become more competitive. A great example of this is our sales incentive program launched in March, which is really engaging our store associates and driving higher units per transaction.”


 


In the six months,  sales increased 0.6% to $83.9 million for the six months ended July 26, compared to $83.4 million last year. Comparable store sales decreased 2.0% including a 0.6% decrease at the West 49 banner.     Gross margin for the period was $14.4 million, or 17.2% of net sales, compared to $18.2 million, or 21.8% of net sales for the same period a year earlier.


 


EBITDA loss for the period was $5.0 million compared to $1.7 million, normalized, for the first six months of last year. Net loss for the year-to-date was $5.9 million, or $0.09 per share, compared to normalized net loss of $3.3 million, or $0.05 per share, for the same period a year earlier.