West Marine CEO says 2008 plans reflect "cautious expectations"
West Marine, Inc. (Nasdaq:WMAR) CEO Geoffrey Eisenberg said the boating supplies and accessories retailer is assuming continued economic softness and a challenging environment in 2008. Eisenberg, however, noted that the firm remains optimistic about its long-term prospects. The chief executive made the comments during a midday investor conference call.
Going forward, the Watsonville, Calif.-based firm’s plans reflect “cautious expectations,” he said. Eisenberg said West Marine will revise pricing and product margins, as well as open bigger flagship stores in larger markets. The company plans on opening a 30,000 square-foot location in Jacksonville, Fla., he said.
“We have set our plans for the year based a conservative expectation for sales due to industry and economic conditions,” CFO Thomas Moran said.
For fiscal 2008, West Marine said in a statement that it expects earnings in the range of $0.02 to $0.09 per share and sales of between $660 million and $670 million. Wall Street analysts, on average, expect 2008 earnings of $0.24 per share on sales of $680 million. West Marine also said it expects a decrease in comparable-store sales ranging between 3.5% to 5%.
The earnings estimate does not include expenses related to an ongoing SEC investigation regarding the accounting restatement of several years of earnings.
“It is difficult to anticipate the timing or level of [the SEC investigation] expenses,” Moran said. “However, we will continue to break out the impact of that to our financial results as we report them during the year.”
Before the opening, West Marine posted a fourth-quarter loss of $65.7 million, or $3 per share, compared with a loss of $12.8 million, or $0.60 per share, a year earlier. Analysts anticipated a loss of $0.57 per share.
Quarterly revenue dipped 5% to $118.3 million from $124 million during the same period of 2006. Analysts expected $117.8 million.
In 2008, the firm plans to open between five and 10 new stores and close between 10 and 15 stores, Moran said. West Marine also expects to remodel 10 to 20 stores, he said.
In afternoon trading, WMAR shares are down 8.11%, or $0.70, at $7.93. Shares have traded between $6.20 and $18.38 over the last 52 weeks.
