West Marine Q2 Sales Slip 0.4%, Income Drops 9.5%

West Marine, Inc. reported a 9.5% drop in net income for the second quarter ended July 2, 2005 to $22.8 million, or $1.07 per share, compared to $25.2 million, or $1.17 per share, for the second quarter of 2004. Net sales for the second quarter were up 0.4% to $253.5 million, compared to net sales of $252.6 million a year ago. Comparable store sales for the quarter decreased 3.5%, versus an increase in comp sales of 4.6% for the same period a year ago. Comparable store sales are defined as sales from stores that have been open at least thirteen months and where selling square footage did not change by more than 40% in the previous thirteen months.

Net income for the twenty-six weeks ended July 2, 2005 was $17.3 million, or 81 cents per share, compared to net income of $22.1 million, or $1.04 per share, for the same period a year ago. Net sales for the first six months of 2005 were $378.9 million, compared to net sales of $381.8 million for the same period last year. Comparable store sales for the first six months of 2005 decreased 4.6%, versus an increase in comparable store sales of 6.2% reported for the same period a year ago.

2005 Guidance

Peter Harris, West Marine's chief executive officer, stated, “As we reported in our sales release a few weeks ago, poor weather in April and May on both coasts dampened second quarter results, especially when compared to the great spring weather we enjoyed last year. We also explained that while a poor second quarter for us has sometimes been followed by a better third quarter, not achieving a rebound early on could result in a reduction in our earnings forecast for the full year.

“As we started to see in June, sales in July continued to improve with better weather, although not enough to offset lower sales earlier in the year. Based on results for the first three weeks in July, we now believe that earnings for the 2005 fiscal year will be in the range of 95 cents to $1.00 per share, as we indicated in our sales release earlier this month.”

West Marine, Inc.
Condensed Consolidated Statements of Income
For the 13 Weeks Ended July 2, 2005 and July 3, 2004
(Unaudited, in thousands except per share amounts and store data)



                                       13 Weeks Ended  13 Weeks Ended
                                        July 2, 2005    July 3, 2004
                                       --------------- ---------------
Net sales                              $253,547 100.0% $252,606 100.0%
Cost of goods sold, including buying
 and occupancy                          159,631  63.0%  158,087  62.6%
                                       --------------- ---------------
   Gross profit                          93,916  37.0%   94,519  37.4%
Selling, general and administrative
 expense                                 55,463  21.8%   51,692  20.4%
                                       --------------- ---------------
   Income from operations                38,453  15.2%   42,827  17.0%
Interest expense, net                     1,624   0.7%    1,576   0.7%
                                       --------------- ---------------
   Income before income taxes            36,829  14.5%   41,251  16.3%
Income taxes                             14,038   5.5%   16,088   6.3%
                                       --------------- ---------------
      Net income                       $ 22,791   9.0% $ 25,163  10.0%
                                       =============== ===============

Net income per common and common
 equivalent share:
   Basic                               $   1.08        $   1.21
   Diluted                             $   1.07        $   1.17