West Marine, Inc. , the largest specialty retailer of boating supplies and accessories in the United States, reported financial results for the third quarter ended September 28, 2013.
-Net revenues were $193.4 million, an increase of 0.7% compared to last year.
-Comparable store sales increased by 0.9%.
-Direct-to-Consumer sales were up 20.3%, driven by our strategic investments in eCommerce.
-Sales in our merchandise expansion categories (which include footwear, apparel, clothing accessories, fishing products and paddle sports equipment) were up 11.0%, with core usage-related product sales down 0.8%, compared to last year.
-Pre-tax income was $13.0 million, down 23.2% compared to pre-tax income of $17.0 million last year.
-The company is reaffirming its 2013 full-year pre-tax guidance, with pre-tax income expected to be in the range of $15.5 million to $17.5 million, compared to pre-tax income of $24.3 million for 2012.
-The company remained debt-free at quarter-end and has $105.9 million available on its revolving credit line at the end of the period.
-Net revenues for the 13 weeks ended September 28, 2013 were $193.4 million, an increase of 0.7% compared to net revenues of $191.9 million for the 13 weeks ended September 29, 2012.
In line with our omni-channel focus, beginning in the first quarter, we changed the definition of comparable store sales to now include sales from our Direct-to-Consumer and wholesale channels. As before, store sales are included in comparable store sales in the fiscal period in which they commence their 14th full month of operations.
Stores that were closed or substantially remodeled (i.e., resulting in an increase or decrease of 40% or more of selling square footage) are excluded. Using this new definition, comparable store sales for our third quarter increased by 0.9% over the same period last year. For the third quarter last year, we reported a 4.9% increase in comparable store sales. Using the new definition, our third quarter 2012 comparable store sales also increased by 4.9%.
Net income for the third quarter was $6.3 million, or $0.26 per diluted share, compared to net income of $10.3 million, or $0.43 per diluted share, for the third quarter last year. Excluding the impact of the $1.5 million valuation allowance recorded during the third quarter of this year, which resulted from a California tax law change, net income for the third quarter would have been $7.9 million, or $0.32 per diluted share.
Net revenues for the 39 weeks ended September 28, 2013 were $544.4 million, a decrease of 2.3% compared to net revenues of $557.0 million for the 39 weeks ended September 29, 2012. Comparable store sales decreased by 2.3% for the first nine months of 2013 versus the same period last year. For the first nine months last year, we reported a 3.5% increase in comparable store sales. However, using the new definition, our first nine months 2012 comparable store sales would have increased by 3.2%.
Net income for the first nine months was $19.7 million, or $0.80 per diluted share, compared to net income of $26.6 million, or $1.12 per diluted share for the first nine months last year.
Total inventory at the end of the third quarter was $222.2 million, a $9.1 million, or 4.3%, increase versus the balance at September 29, 2012, and a 3.3% increase on an inventory per square foot basis. Inventory turns for 2013 were down 0.6% versus the first nine months of last year.