Marine Electronics
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West Marine Inc.(Nasdaq:WMAR), one of the largest specialty retailers of boating supplies and accessories in the United States, reported that its revenues for its 2010 fiscal quarter that ended April 3, 2010 increased $8.6 million or 8.5 percent over the same period last year. Sales reached $109.6 million, an increase of $8.6 million, or 8.5%, from net revenues of $101.0 million a year ago.
West Marine reported that the sales increase was primarily from its retail stores and direct sales channels. Overall, West Marine retail store sales were up $8.1 million, 9.1 percent over last year’s level of $96.4 million. Of total retail store channel sales it reported a $6.9 million, or 8.4%, increase in comparable store sales and $5.0 million in sales from stores opened in 2009 and the first quarter of 2010. West Marine’s direct sales channel, which includes Internet and call center transactions showed the largest increase, 11.1 percent, to $6.5 million. On the down side, West Marine’s Port Supply segment, or wholesale channel, revenue dropped about 1.6 percent to $6.7 million. The company noted that some wholesale revenue is recorded as retail store revenue.
The increase in the retail sales channel was partly attributed to the closure of Boater World stores. Geoff Eisenberg, Chief Executive Officer of West Marine on that point said, “From a competitive perspective, we are still benefiting from the closure of Boater’s World stores, which was not completed until the mid-part of last year.
Overall though, the sales improvement was perceived as broad based and somewhat unexpected. Eisenberg said, “We are very pleased with our first quarter sales results, which were ahead of our expectations. We believe these results were driven by a number of factors, both external and internal. From a marketplace perspective, with increased sales of maintenance-type products, we are seeing signs that more people are preparing their boats for usage this year. We also are seeing recovery in demand for bigger-ticket items, such as boats, motors and electronics. Further, our expansion in the assortment of clothing and technical apparel is receiving good customer response. What is particularly encouraging is that the overall sales improvement was broad-based, across all regions of the country.”
Although sales have increased year-over-year at West Marine, and are considered to be on a positive economic trend, sales levels are still trailing significantly below years past. Back in 2006, West Marine’s revenue was well over $700 million. However since that peak, sales have continually declined, reaching below the $600 million level in 2009.
West Marine has attributed these lower sales in part to inventory and vendor supplies problems. Eisenberg however believes these problems have been resolved, and that is reflected in the increased sales for the quarter, “Finally, we believe that our strong inventory position is helping us to fulfill customer needs and maximize sales. As we talked about previously, given some vendor challenges we faced last year, we made a strategic decision to bring core goods in earlier and in greater quantity so that we’d be more prepared to respond in the event of an increase in demand. I am pleased to say that even with first quarter comparable store sales that were up more than 8% versus last year, we have maintained target in-stock levels across the board.
