West Marine, Inc. reported that net sales for the five weeks ended October 2, 2004 were $54.5 million, a 3.7% decrease compared to net sales of $56.6 million for September last year. Comparable store net sales for September 2004 decreased 6.5% compared to the same period a year ago. September comparable store sales by region were as follows: Western -3.7%, Northeast -8.5% and Southeast -6.5%.
Net sales for the thirteen weeks ended October 2, 2004 were $183.1 million, a decrease of 4.6% compared to net sales of $191.9 million for the third quarter last year. Comparable store net sales for the latest thirteen weeks decreased 7.7% compared to the same period a year ago.
Net sales for the thirty-nine weeks ended October 2, 2004 were $564.9 million, an increase of 5.4% over net sales of $536.0 million for the same period a year ago. Comparable store net sales for the latest thirty-nine weeks increased 1.1% compared to the same period a year ago.
John Edmondson, CEO of West Marine, said: “Our mid-September earnings update warned about the continuing soft trend in customer spending that we first observed in the latter part of June. September sales, however, were lower than we expected because hurricanes had a more pronounced and widespread impact than we had anticipated. Hurricane Ivan, which had not yet landed when we issued our press release, tore through Louisiana, Mississippi and Florida before doubling back and striking Texas. Combined with a fourth hurricane, Jeanne, sales in our Southeast region and large parts of our Northeast region were significantly affected.
“Historically, the net effect of hurricanes on our business has been mostly neutral over time because sales in affected areas usually improve as boat owners make necessary repairs. This improvement, however, takes place over a more prolonged period of time. Comparable store sales for both the month and the third quarter were also challenged because last year Hurricane Isabel kicked off early winterizing sales in September as boaters in the mid-Atlantic and northeast states rushed to put their boats away for the season as the storm approached.
“Due to lower than expected September sales and higher than expected hurricane preparation and recovery costs, we are lowering our third quarter earnings estimate to $0.32 per share, which includes writedowns of storm-damaged merchandise. We still expect to open 35 new stores this year and we plan on increasing our store growth rate to between 50 and 55 new stores each year, starting with 2005.
“Also beginning in 2005, we plan to report sales for each quarter rather than for every month. We believe this approach will better emphasize trends in our business, as it removes some of the short-term effects that weather has in monthly sales results.”
