West Marine, Inc. (Nasdaq:WMAR) today released unaudited financialresults for the first quarter of 2012. First Quarter 2012 Highlights: Net revenues were $121.5 million, an increase of 6.7% versus lastyear. Comparable store sales increased by 4.3%.
Pre-tax loss was $10.6 million, a 13.5%, or $1.7 millionimprovement versus last year. (Due to seasonality, West Marine hashistorically reported a loss for the first quarter.) Net loss per share was $(0.27) compared to $(0.55) in 2011. (2012net loss reflected the significant favorable impact of a change ineffective tax rate to a benefit of 41.2% this year versus aprovision of 0.5% last year.) At quarter end, the company was debt-free. At the end of thecomparable period last year, West Marine had $21.1 millionoutstanding under its credit facility. Inventory per square foot decreased by 4.3% compared to the firstquarter last year.
Geoff Eisenberg, West Marine's CEO, commented: "2012 is off toa strong start for West Marine and we are encouraged by theseresults. The success of our growth strategies, combined with arelatively warm and dry Spring, puts us in a great position as weenter our key boating season. Our outstanding teams of Associatescontinued to manage the business effectively and deliver improvedbottom line results." 2012 First Quarter Results Net revenues for the 13 weeks ended March 31, 2012 were $121.5million, up 6.7 % compared to net revenues of $113.8 million forthe 13 weeks ended April 2, 2011. Revenues in the Stores segmentwere $108.1 million, up $7.9 million, or 7.9%, compared to the sameperiod last year. Comparable store sales grew by 4.3% versus thesame period last year.
We believe this growth was driven by bothinternal and external factors. We experienced higher sales in allcore categories during the first quarter, especiallymaintenance-related products, which we believe were related to thedry, warm weather and early Spring experienced this year acrossmost areas of the country. We also saw growth in our soft goodscategories, reflecting the success of our merchandise expansionstrategy. Our revenues from stores opened or expanded in 2011 andthe first three months of 2012 contributed $13.8 million to ourStores segment. The impact of stores closed during these sameperiods effectively reduced revenues by $9.2 million.
The majorityof the closures were a result of our ongoing real estateoptimization strategy to evolve into having fewer, larger stores. Our Port Supply segment revenues, representing sales to ourwholesale customers through our distribution centers, for the firstquarter of 2012 were $6.3 million, a decrease of $0.2 million, or3.6%, compared to the same period last year. Our ongoing executionof real estate optimization, including adding hubs in our storelocations that target and cater to Port Supply customers, continuesto shift revenue from the Port Supply segment to the Storessegment. We believe these initiatives improve our service model toour wholesale customers.
Net revenues in our Direct-to-Customer segment for the quarter were$7.1 million, a decrease of $0.1 million, or 0.7%, compared to thesame period last year. Our domestic sales demonstrated solidgrowth. This growth was offset, however, by lower sales tointernational customers. Gross profit for the first quarter was $29.5 million, an increaseof $4.8 million compared to 2011. As a percentage of net revenues,gross profit increased by 2.6% to 24.3%, compared to gross profitof 21.7% last year.
This increase was driven primarily by a 1.7%improvement in raw product margins, due to less promotional andclearance activity. There also was a sales mix shift away fromhigher-priced, but lower margin items, such as electronics, tohigher-margin maintenance-related items. We attribute this shift tothe mild and dry weather, which prompted customers to prepare theirboats earlier in the season this year. The increase in gross profitas a percentage of revenues also resulted from our leveraging ofrelatively-fixed occupancy expense by 1.1% on the higher sales anda 0.1% improvement in shrink results.
Gross profit marginimprovements were partially offset by a 0.3% increase in unitbuying and distribution costs incurred this year. Selling, general & administrative ("SG&A")expense for the quarter was $39.9 million, an increase of $3.0million compared to the same period last year. As a percentage ofnet revenues, SG&A expense increased by 0.5% to 32.9%, onhigher sales. Drivers of the higher SG&A expense included: $1.0million in higher accrued bonus expense, reflecting performanceabove budgeted expectations; $0.7 million in higher store payrollto support the higher sales and for training related to our newpoint-of-sale system; $0.7 million in higher store project expensereflecting the opening of three flagship stores during the firstquarter this year compared to one flagship store last year; and$0.4 million in higher information technology spending. Pre-tax loss for the 13 weeks ended March 31, 2012 was $10.6million, a $1.7 million, or 13.5%, improvement from pre-tax loss of$12.3 million last year.
The effective income tax rate for the first quarter of 2012 was abenefit of 41.2%, compared to a provision of 0.5% in 2011. Theyear-over-year change in our effective tax rate primarily was dueto the release of most of our valuation allowance during the secondquarter of fiscal 2011. The release of this valuation allowancelast year returned us to a more normalized effective tax rate thisyear. As a result, we were able to record a tax benefit in thefirst quarter of 2012 since it was a loss quarter within aforecasted profitable year.
This benefit was not available to usduring the first quarter of 2011 since a full valuation allowancewas in place against our deferred tax assets at that time. Net loss per share was $(0.27) per share, a 50.9% improvementcompared to a net loss per share of $(0.55) per share last year. Total inventory at the end of the first quarter was $240.9 million,a $6.8 million, or 2.7%, decrease versus the first quarter of lastyear, and a 4.3% decrease on an inventory per square foot basis.Inventory turns for 2012 were up slightly versus the first quarterof last year. We are encouraged by our first quarter results and are confirmingour previously-communicated full-year guidance for 2012.
WEBCAST AND CONFERENCE CALL As previously announced, West Marine will hold a conference calland webcast on Thursday, April 26, 2012, at 10:00 AM Pacific Timeto discuss first quarter 2012 financial results. The live call willbe webcast and available in real time on the Internet atwestmarine.com under "Investor Relations." The earningsrelease will also be posted on the Internet at westmarine.com under"Press Releases" on the Investor Relations page. Pleaseallow extra time prior to the call to visit the site and downloadthe streaming media software required to listen to the Internetbroadcast. Interested parties can also connect to the conference call bydialing (800) 341-6235 in the United States and Canada and (706)634-1041 for international calls. Please be prepared to give theconference ID number 70199041.
The call leader is Geoff Eisenberg,West Marine's President and Chief Executive Officer. An audio replay of the call will be available April 26, 2012 at1:00 PM Pacific Time through May 3, 2012 at 8:59 PM Pacific Time.The replay number is (855) 859-2056 in the United States and Canadaand (404) 537-3406 for international calls. The access code is70199041. ABOUT WEST MARINE West Marine, the largest specialty retailer of boating supplies andaccessories, has 313 company-operated stores located in 38 states,Puerto Rico, Canada and three franchised stores located in Turkey.Our Direct-to-Customer division, which comprises our call center,direct mail and e-commerce channels, offers Customers over 75,000products plus the convenience of exchanging catalog and e-commercepurchases at our Store locations. Our Port Supply division is oneof the largest wholesale distributors of marine equipment servingboat manufacturers, marine services, commercial vessel operatorsand government agencies.
For more information on West Marine'sproducts and store locations, or to start shopping, visitwestmarine.com or call 1-800-BOATING (1-800-262-8464). SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release includes "forward-looking statements"within the meaning of Section 21E of the Securities Exchange Act of1934, including statements concerning statements that arepredictive or express expectations that depend on future events orconditions that involve risks and uncertainties. Theseforward-looking statements include, among other things, statementsthat relate to our expectations and projections with respect to ourability to execute on our strategic growth strategies, expectationsrelated to our earnings and growth in profitability, and ourexpectations for full-year 2012 results, as well as facts andassumptions underlying these expectations and projections. Inaddition, the results presented in this release are preliminary andunaudited, and may change as we finalize our financial statements.Actual results for our first quarter of 2012 and the current fiscalyear may differ materially from the preliminary expectationsexpressed or implied in this release due to various risks,uncertainties or other factors, including the risk factors setforth in West Marine's annual report on Form 10-K for the fiscalyear ended December 31, 2011, as well as the discussion of criticalaccounting policies in our Form 10-K for the year ended December31, 2011.
Except as required by applicable law, West Marine assumesno responsibility to update any forward-looking statements as aresult of new information, future events or otherwise. Last Updated ( Thursday, 26 April 2012 ). I am China Energy Manufacturers writer, reports some information about samsung sgh t500 , fiber media converter.
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