West 49 Inc. reported net income in the third quarter improved 38.1% to CN$2.9 million ($2.8 mm), or CN5 cents per share, compared to CN$2.1 million ($2 mm), or CN3 cents per share, a year ago. Sales for the Canadian action sports chain declined 3.7% to CN$59.4 million ($56.5 mm).
The lower net sales for the quarter were driven by a 6.0% decrease in consolidated comparable store sales, impacted by continued weakness in consumer confidence and a highly competitive retail environment. The company's core West 49 banner was more resilient, with comparable store sales down 1.2% for the quarter.
Gross margin for the quarter increased 180 basis points to 27.9% of net sales. The company said the improved gross margin was largely the result of continued improvements in product margins and the progress made on the supply chain side as W49 improved the flow of goods into its stores and reduced its supply chain costs.
Selling, general and administrative expenses decreased to 18.0% of net sales, a 30 basis point improvement. The higher gross margin achieved and the company's continued focus on cost reduction and containment resulted in a CN$1.1 million ($1.04 mm) improvement in EBITDA for the quarter.
