West Marine, Inc. reported that sales for the second quarter ended July 2 improved 1.1 percent to $236.0 million from $233.4 million in the year-ago period. Revenues in the Retail Stores segment were $214.8 million, up 1.0% from 212.6 million in the year-ago period.
Management noted that revenues from stores opened in 2010 and the first two quarters of 2011 contributed $15.8 million to the increase while the impact of stores closed during these same periods effectively reduced revenues by $13.2 million. Port Supply segment revenues from distribution centers were $8.4 million, down 8.8 percent from sales of $7.6 million in the year-ago period.
Management said as the retailer opens larger stores and hub locations within stores, sales continue to be shifted from Port Supply to retail stores. Direct Sales segment net sales were down 10.5 percent to $12.7 million in second quarter.
Gross margins improved 70 basis points to 36.0 percent compared to 35.3 percent last year. Management said the increase in margins was attributable to 0.3% increase in raw product margin driven by less promotional and clearance activity and a 0.3% impact of lower unit buying and distribution costs. Additionally, gross margin benefited by 0.1% from improved shrinkage results.
Resulting net income was $44.7 million, or $1.92 per diluted share, compared with earnings of $35.1 million, or $1.56 per diluted share, in the year-ago period.
Looking ahead, WMAR raised previously-issued pre-tax income guidance to a range of approximately $18.5 million to $20.0 million versus a previously-communicated range of $17.5 million to $19.0 million.
Comparable store sales for the year are now anticipated to increase 1.5 percent to 2.5 percent, versus the previously-communicated range of 1 percent to 2percent, with total revenues now expected to be in a range of approximately $640 million to $645 million, versus a previously-communicated $634 million to $640 million range.
