West 49 Inc., the Canadian action sports chain, reported first quarter revenues fell 5.1% to $38.9 million ($38.1 million) from $41 million (40.2 million). Comparable store sales were down 8.1% on a consolidated basis and down 7.4% for the core West 49 banner. Comps continued to be impacted by the transition at Off The Wall, cross border shopping, and a challenging Ontario market for the West 49 banner.
However, the company noted that while West 49 comparable store sales were down in February and March, the banner had positive comparable store sales in April.
Gross margin decreased 620 basis points to 12.3% for the quarter. The decrease was due primarily to lower product margins (driven largely by markdowns at Off The Wall to clear merchandise during the first two months of the quarter) and the weaker net sales results not being sufficient to leverage higher occupancy costs. Increased freight costs also contributed to the year-over-year variance.
EBITDA loss for the quarter was $4.3 million ($4.2 million) compared to $2.6 million ($2.5 million) , excluding restructuring costs of $600,000 incurred in the first quarter of last year. The higher EBITDA loss was due to the lower gross margin for the quarter, which was partially offset by a 90 basis point reduction achieved in selling, general and administrative expenses through continued improvements in expense management.
Net loss for the quarter was $4.2 million ($4.1 million), or 7 cents a share, compared to $2.8 million ($2.7 million), or 4 cents, excluding the after-tax impact of $400,000 of restructuring costs in the first 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 a weighted average of 63,208,263 common shares outstanding for the same period a year ago.
At the end of the quarter the company was operating 134 stores compared to 128 stores at the end of the first quarter of fiscal 2008.
