West Marine, Inc. lowered its earnings and sales outlook for 2007,
citing softness in the market. The boat supplies retailer now expects
full year earnings in the range of 24 cents to 34 cents per share, down
from its previous range of 45 cents to 55 cents per share. Analysts
surveyed by Thomson Financial expect a profit of 38 cents per share.
West Marine also revised its 2007 same-store sales forecast to a
decline of 1.5 percent to 2.5 percent, versus a previous prediction of
growth between 1 percent and 2 percent. Total sales are expected to
range between $683-$688 million. In 2006, West Marine lost earned $7.1
million on sales of $716.6 million.
“As we move through the peak season, boating activity throughout the
country has not shown signs of recovery, and revenues have been
disappointing,” said Peter Harris, West Marine's chief executive
officer. “Primarily, we are seeing softness in the Southeast,
particularly Florida, which is a key boating market. Broadly, sales of
higher-priced discretionary items, such as electronics, have been weak,
and in-store traffic levels, which we believe reflect boat usage, have
been lower than expected. We indicated during our earnings call in
April that a continuance of the broader marine industry weakness would
impact our ability to generate anticipated sales. Overall, there has
not been the anticipated revenue improvement that would have been
required to deliver this year's previously communicated expected
results.”
West Marine said it would continue to optimize cash flow by maintaining a strong inventory management and expense discipline.
