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January 06, 2006

West Marine Lowers Earnings Expectations

West Marine, shaking off the effects of hurricanes and high fuel prices, said Wednesday its fourth quarter net sales rose 5.7 percent...

West Marine, shaking off the effects of hurricanes and high fuel prices, said Wednesday its fourth quarter net sales rose 5.7 percent to $124.8 million, up from $118.1 million in the same quarter last year.

Comparable store sales - sales at stores open at least a year -increased 3.9 percent for the quarter,  compared to a 3.3-percent sales decline for the same period last year.

"In our third quarter conference call, we described the significant negative impact that hurricanes and continued high fuel prices were having on sales of boating merchandise," said CEO Peter Harris, in a statement. "We responded to that trend with aggressive advertising and sales promotions designed to draw customers back into our stores. These efforts produced higher than expected fourth-quarter sales, although at much lower than expected margins, primarily due to deep promotional pricing and a greater proportion of sales from lower margin electronics."

The highest increase in sales was reported in the western stores, with an 8.9-percent increase during the quarter. Sales for the quarter rose 3.9 percent in the Northeast and 1 percent in the Southeast.

Net sales for the year were $692.2 million, an increase of 1.4 percent from net sales of $683 million for the same period a year ago. Comparable store sales for the latest 52 weeks dipped 2.2 percent, compared to a comparable store sales increase of 0.3 percent reported for the same period a year ago.

The Watsonville, Calif.-based company expects 2005 earnings to range from 20 cents to 25 cents a share, compared with its October estimate of 35 cents to 40 cents a share.