West Marine, Inc. (WMAR) saw its loss narrow to $7.27 million, or $0.29 a share for the quarter ended Apr. 01, 2017. In the previous year period, the company reported a loss of $9.11 million, or $0.37 a share.
Revenue during the quarter went down marginally by 1.03 percent to $129.06 million from $130.40 million in the previous year period. Gross margin for the quarter expanded 28 basis points over the previous year period to 25.51 percent. Operating margin for the quarter stood at negative 9.27 percent as compared to a negative 11.61 percent for the previous year period.
Operating loss for the quarter was $11.97 million, compared with an operating loss of $15.14 million in the previous year period.
Adjusted EBITDA for the quarter stood at negative $6.20 million compared to negative $9.70 million in the prior year second quarter. At the same time, adjusted EBITDA margin stood at negative 4.80 percent for the quarter compared to negative 7.44 percent in the last year period.
Matt Hyde, chief executive officer of West Marine, commented: "We are pleased that the improvements in our cost structure and our strategies are resulting in solid bottom-line gains. Despite the challenging weather and retail environment in the quarter, we've maintained our comparable store sales and improved gross margins over last year."
For financial year 2017, West Marine, Inc. expects revenue to be in the range of $707 million to $715 million. The company reiterated its most recently issued full-year 2017 pre-tax income guidance of $13 to $16 million on comparable store sales increases of 1% to 2%.
Operating cash flow remains negative
West Marine, Inc. has spent $24.75 million cash to meet operating activities during the quarter as against cash outgo of $19.38 million in the last year period.
The company has spent $4.21 million cash to meet investing activities during the quarter as against cash outgo of $6.34 million in the last year period. It has incurred net capital expenditure of $4.21 million on net basis during the quarter, down 33.50 percent or $2.12 million from year ago period.
The company has spent $0.21 million cash to carry out financing activities during the quarter as against cash outgo of $0.09 million in the last year period.
Cash and cash equivalents stood at $46.97 million as on Apr. 01, 2017, up 110.15 percent or $24.62 million from $22.35 million on Apr. 02, 2016.
Working capital increases
West Marine, Inc. has recorded an increase in the working capital over the last year. It stood at $233.34 million as at Apr. 01, 2017, up 7.02 percent or $15.30 million from $218.03 million on Apr. 02, 2016. Current ratio was at 3.18 as on Apr. 01, 2017, up from 3 on Apr. 02, 2016.
Cash conversion cycle (CCC) has decreased to 85 days for the quarter from 192 days for the last year period. Days sales outstanding were almost stable at 6 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 122 days for the quarter compared with 229 days for the previous year period. At the same time, days payable outstanding went down to 42 days for the quarter from 43 for the same period last year.
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