West Marine, Inc. (WMAR) has reported 21.24 percent fall in profit for the quarter ended Oct. 01, 2016. The company has earned $3.85 million, or $0.15 a share in the quarter, compared with $4.89 million, or $0.20 a share for the same period last year.

Revenue during the quarter went down marginally by 1.30 percent to $191.85 million from $194.38 million in the previous year period. Gross margin for the quarter contracted 9 basis points over the previous year period to 28.85 percent. Total expenses were 96.10 percent of quarterly revenues, up from 95.53 percent for the same period last year. That has resulted in a contraction of 57 basis points in operating margin to 3.90 percent.

Operating income for the quarter was $7.48 million, compared with $8.68 million in the previous year period.

Matt Hyde, chief executive officer of West Marine, commented: "We are pleased that our growth strategies are resulting in a 24% increase in eCommerce sales and solid top-line gains in our Waterlife stores. At the same time, we continue to make changes to our professional services business to improve its long-term profitability. Despite the challenging retail environment, we’ve increased comparable store sales and product margins and remain on track to achieve a double digit increase in pre-tax income for 2016."

The company has spent $14.77 million cash to meet investing activities during the nine month period as against cash outgo of $15.61 million in the last year period. It has incurred net capital expenditure of $14.77 million on net basis during the nine month period, down 5.37 percent or $0.84 million from year ago period.

Cash flow from financing activities was $0.16 million for the nine month period, down 87.76 percent or $1.16 million, when compared with the last year period.

Cash and cash equivalents stood at $93.92 million as on Oct. 01, 2016, up 55.28 percent or $33.44 million from $60.49 million on Oct. 03, 2015.
 

Working capital increases marginally
West Marine, Inc. has recorded an increase in the working capital over the last year. It stood at $246.97 million as at Oct. 01, 2016, up 1.10 percent or $2.68 million from $244.29 million on Oct. 03, 2015. Current ratio was at 3.37 as on Oct. 01, 2016, down from 3.86 on Oct. 03, 2015.

Cash conversion cycle (CCC) has decreased to 46 days for the quarter from 138 days for the last year period. Days sales outstanding were almost stable at 5 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 77 days for the quarter compared with 163 days for the previous year period. At the same time, days payable outstanding went up to 36 days for the quarter from 30 for the same period last year.