West Marine, Inc. reported comparable store sales excluding a calendar shift, surged 7.3 percent in the fiscal first quarter ended April 4, 2015 compared with a year earlier thanks in part to a new Super Sale in March.
The retailer reported comparable store sales increased by 13.3 percent versus the 1.7 percent decrease reported for the same period last year. However, approximately 6 percent of the increase was attributable to the calendar shift in fiscal 2014 from a 53 week fiscal year to a 52 week fiscal year in fiscal 2015, which has a meaningful impact on the company's seasonal business.
“The 2015 boating season is off to a strong start and we are very pleased with our comparable store sales results in the first quarter,” said West Marine CEO Matt Hyde. “Our three key strategies performed well as a result of excellent execution by the entire West Marine team. Also, we introduced our first Super Sale in March, which drove top line sales and brought new customers into our stores. We believe we are well positioned for the peak boating in the months ahead.”
West Marine's net revenues for the 13 weeks ended April 4, were $127.1 million, an increase of 12.1 percent, compared to net revenues of $113.3 million for the 13 weeks ended March 29, 2014.
Pre-tax margin improved by 2.8 percent of revenues to (14.2) percent for the first quarter compared to (17.0) percent for the first quarter last year. This change was primarily driven by a decrease in selling, general and administrative expense of 3.5 percent of revenues, partially offset by a 0.8 percent lower gross profit margin driven by higher inventory shrinkage expense during the first quarter this year.
Net loss for the first quarter was $10.3 million, or ($0.42) per share, compared to net loss of $11.0 million, or ($0.46) per share for the first quarter last year.
Total inventory at the end of the first quarter was $256.6 million, an $11.4 million, or 4.7 percent, increase versus the balance at March 29, 2014, and a 5.4 percent increase on an inventory per square foot basis.
Growth strategy update
Hyde laid out the following examples of progress the company made on its growth strategies during the first quarter.
- E-commerce: Sales from our e-commerce websites were up by 27.1 percent as compared to last year, and represented 9.3 percent of total sales, compared to 8.2 percent for the same period last year.
- Store optimization: Sales driven by our store optimization strategy increased to 43.1 percent of total sales compared to 38.2 percent last year. During the quarter, we opened two new flagship stores and revitalized nine existing stores.
- Merchandise expansion: Sales in these product lines, which include footwear, apparel, clothing accessories, fishing products and paddle sports equipment, were up by 21.2 percent, with core product sales up 11.1 percent, compared to last year.
Hyde said West Marine said the calendar shift will continue to benefit West Marine through the first half of the year, but result in tough comps in the back half, particularly during the third quarter as peak boating season winds down. The annualized impact is expected to be negligible.
West Marine reaffirmed its guidance, which calls for pre-tax income for the year to be in a range of approximately $6.0-to-$11.0 million and EBITDA to be in the range of approximately $26.0-to-$31.0 million. GAAP diluted earnings per share is expected to be in the range of approximately $0.14-to-$0.27. Comparable store sales for full-year 2015 are expected to range from up 1.0-to-4.0 percent. West Marine plans for capital expenditures for fiscal 2015 to be in the range of $22 million to $25 million.