West Marine Inc. reported comparable store sales grew 7
percent in the second quarter ended July 4, or 3 percent excluding the impact
from a change in its retail calendar.

Net revenues for the second quarter increased by $16.7 million, or 7.1 percent,
to $253.2 million compared to $236.5 million for the second quarter of 2014.

Pre-tax profit margin improved by 1.0 percent of revenues to 14.7 percent for
the second quarter, compared to 13.7 percent for the second quarter last year.
The change was driven by a 1.0 percent increase in gross profit margin
resulting from leverage of fixed costs, including occupancy, offset by a 0.1
percent increase in selling, general and administrative expense.

Net income for the second quarter was $20.9 million, or $0.85 per diluted
share, compared to net income of $18.3 million, or $0.75 per diluted share, for
the second quarter of 2014.

Total inventory at the end of the second quarter was $258.1 million, a $14.5
million, or 6.0 percent increase versus the balance at June 28, 2014, and a 6.7
percent increase on an inventory per square foot basis. Inventory turns for
2015 increased to 2.7 percent versus the first six months of last year.

Progress on West Marine growth
strategies year-to-date was as follows:

  • eCommerce: Sales from e-commerce increased by 27.0 percent
    compared to last year and represented 8.4 percent towards a 2019 goal of 15 percent of total
    sales, compared to 7.2 percent for the same period last year.
  • Store optimization: Sales through optimized stores increased to 41.7 percent of
    total sales compared to 41.5 percent last year. This year-over-year increase
    supports West Marine's end of 2019 goal
    to deliver 50 percent of  West Marine's
    total sales through optimized stores.
  • Merchandise expansion: Sales in these product lines, which include footwear,
    apparel, clothing accessories, fishing products and paddle sports equipment,
    increased by 20.2 percent, with core product sales up 6.3 percent, compared to
    last year.


West Marine, which operates more than 270 stores in
38 states, Puerto Rico and Canada and an e-commerce website, reaffirmed its full year guidance, which calls for:

  • Pre-tax income in a range of approximately $6.0 million to $11.0 million
  • EBITDA in the range of approximately $26.0 million to $31.0 million
  • GAAP diluted earnings per share in the range of approximately $0.14 to $0.27
  • Comparable store sales in the range from 1.0% to 4.0%
  • Capital expenditures for fiscal 2015 to be in the range of approximately $22 million to $25 million

West Marine, Inc.
Condensed Consolidated Statements of Income
(Unaudited and in thousands, except per share data)
13 Weeks Ended
July 4, 2015 June 28, 2014
Net revenues $ 253,177 100.0% $ 236,483 100.0%
Cost of goods sold 162,417 64.2% 154,205 65.2%
Gross profit 90,760 35.8% 82,278 34.8%
Selling, general and administrative expense 53,492 21.1% 49,715 21.0%
Income from operations 37,268 14.7% 32,563 13.8%
Interest expense 120 0.0% 115 0.1%
Income before income taxes 37,148 14.7% 32,448 13.7%
Provision for income taxes 16,203 6.4% 14,144 6.0%
Net income $ 20,945 8.3% $ 18,304 7.7%
Net income per common and common equivalent share:
Basic $ 0.85 $ 0.76
Diluted $ 0.85 $ 0.75