A depressed economy and unseasonably cool weather compounded weakness in what was already a traditionally slow quarter for West 49, but second quarter losses narrowed for Canada’s largest action sports retailer despite declining comps. Same store sales West 49 were off by 4.7% while the West 49 banner slid 0.2%.
”We are pleased with the sales performance of our core West 49 banner,” said CEO Sam Baio, “However, we are disappointed by the sales performance of our girls business, which we will continue to monitor and address.”
The net loss for West 49 narrowed to CN$0.9 million ($US 0.8 mm), or CN $.01 per share, (1 cent), from a loss CN$1.8 million ($1.7 mm), or CN$.03 per share (3 cents) in the year-ago period. Gross margins improved 50 basis point to 21.8% of sales for the quarter, compared to 21.3% of sales in the year-ago quarter.
Management said the improvement came as a result of the company “closely working with merchandise vendors to ensure product assortments reflected current trends and provided exceptional value ”
SG&A expenses were down 130 basis points for the quarter, an improvement the company attributed to it’s focus on tightening variable store operating costs and other discretionary spending.
EBITDA for the quarter was CN$0.3 million ($0.3 mm), compared to an EBITDA loss of CN$0.5 million ($0.5 mm) for the second quarter a last year. The improvement was due primarily to the improved gross margin as a rate to sales and cost savings.
During the quarter, the company also renewed its existing credit facilities to include more “accommodating financial covenants.”