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Burlington, Ontario, June 10, 2010 - West 49 Inc. (TSX: WXX) (the "Company"), Canada’s leading action sport retailer, today reported its financial results for its first quarter ended May 1, 2010. All comparisons are to the first quarter of fiscal 2010, ended May 2, 2009.
First quarter highlights:
· Net sales increased 0.2% to $40.9 million;
· Selling, general and administrative (“SG&A”) expense reductions offset gross margin decreases;
· EBITDA loss improved slightly to $2.1 million from $2.2 million for the first quarter of last year; and
· The Company opened three new stores, relocated and expanded a store and closed a store during the quarter.
“While we had slight improvements in a few areas, our financial results were essentially flat to the first quarter of last year,” said Sam Baio, Chief Executive Officer of West 49 Inc. “We did, however, continue to gain efficiencies in our operations and offer unique marketing promotions, which continue to set us apart from other tween and teen retailers.”
Net sales for the quarter increased $0.1 million, or 0.2%, to $40.9 million. Consolidated comparable store sales decreased 2.6%, with the core West 49 banner experiencing a decrease of 3.0%, compared to last year, with comparable store sales growth of 2.9% on a consolidated basis and growth of 7.7% for the West 49 banner. Sales results were particularly challenged in Alberta and British Columbia largely due to weather and the economy.
Gross margin decreased $0.1 million, to $7.3 million. As a rate to net sales, gross margin decreased by 30 basis points to 17.8% as a result of continued pressure in a competitive retail landscape. SG&A expenses decreased $0.2 million to $9.4 million, or 23.0% of net sales.
EBITDA for the quarter was a loss of $2.1 million, slightly improved from the loss of $2.2 million for the first quarter a year ago. The Company had a net loss for the quarter of $2.6 million, or $0.04 per share, unchanged from the prior year.
Store Real Estate Activity
During the quarter, the Company opened a West 49 store at Shoppers’ Mall, in Brandon, Manitoba, and two West 49 Outlets: one at Signal Hill Shopping Centre, in Calgary, Alberta and one at Riocan Durham Centre in Ajax, Ontario. The Company also relocated and expanded a D-Tox store in Carrefour Angrignon, Montreal, Quebec. An Off The Wall store was closed in Coquitlam, British Columbia as a result of a lease expiry in an underperforming location.
“Our outlook remains cautiously optimistic.” said Mr. Baio. “We continue to operate in a retail environment where overall consumer confidence has yet to be restored. Until then, we will remain focused on our unique marketing programs and offering our customers exceptional value. We also remain committed to real estate growth opportunities, mainly in our core West 49 banner, and have plans to open up to four more stores and relocate and expand as many as five more stores this year.”
Notice of Conference Call
The Company will host a conference call on Thursday, June 10, 2010 at 9:00 a.m. (ET) to discuss its fiscal 2011 first quarter results. To access the conference call by telephone, dial 647-427-7450 or 1-888-231-8191. Please connect approximately 15 minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until Wednesday, June 17, 2010 at midnight. To access the archived conference call, dial 416-849-0833 or 1-800-642-1687 and enter the reservation number 79269749 followed by the number sign.
A live audio webcast of the Company’s first quarter results conference call will be available at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3102000. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that maybe required to join the webcast. The webcast will be archived at the above web site for 90 days.
About West 49 Inc.
West 49 Inc. is a leading Canadian specialty retailer of apparel, footwear, accessories and equipment related to the youth action sports lifestyle. The Company’s stores, which are primarily mall-based, carry a variety of high-performance, premium brand name and private label products that fulfill the lifestyle needs of identified target markets, primarily tweens and teens. At May 1, 2010, the Company operated 138 stores in nine provinces, under the banners West 49, Billabong, Off The Wall, Amnesia/Arsenic and D-Tox. The Company’s common shares are listed on the Toronto Stock Exchange under the symbol WXX. The Company has approximately 64 million shares outstanding.
For more information, please contact:
Chief Financial Officer and Corporate Secretary
West 49 Inc.
The Equicom Group Inc.
(905) 336-5454 ext. 224
(416) 815-0700 ext. 270