Wednesday, January 29, 2025

MarineMax Reports Declining Sales

Recreational boat, yacht and superyacht services company MarineMax has released its financial results for the fiscal 2025 first quarter, which ended on 31 December 2024.

In Marinemax’s 2025 Q1 financial results, the firm reported revenue of $468.5m, with same-store sales down 11 per cent year-on-year – a reflection of the impact of a challenged retail market environment and the impact of hurricanes Helene and Milton, which affected the company’s locations along Florida’s west coast.

The firm reported a gross profit margin of 36.2 per cent, a net income of $18.1m, with diluted earnings per share (EPS) of $0.77. Adjusted diluted EPS was $0.17, and adjusted EBITDA was $26.1m.

 

“Our December quarter revenue and same-store sales performance reflected a combination of the soft retail environment that affected the recreational boating industry throughout 2024 and the significant disruptions caused by Hurricanes Helene and Milton,” says Brett McGill, chief executive officer and president of MarineMax. “With continued uncertainty in the economy, demand remained muted for much of the quarter, resulting in lower revenue and higher inventory at quarter-end compared with our expectations.

“Despite the macroeconomic headwinds, our consolidated gross profit margin strengthened, improving 290 basis points to 36.2 per cent from 33.3 per cent in the first quarter of fiscal 2024,” McGill says. “The increase was attributable to the promotional environment and the mix of sales year-over-year, along with meaningful contribution from our higher-margin lines of business, including our marinas, superyacht services, and finance and insurance operations.

“The expansion of our higher-margin revenue streams through strategic acquisitions and organic growth has significantly improved our margin profile over the past several years. This diversification also has enhanced our resilience to the challenges faced by the industry during periods of uncertainty, as demonstrated by our relatively stable adjusted EBITDA despite the revenue decline.

“Consistent with our strategy, we continued our expense-reduction initiatives in the first quarter, including the divestiture or closure of three locations,” McGill says. “Maintaining a focus on cost efficiency, while also keeping a strong balance sheet, will be central to our plans in fiscal 2025 as we work to enhance profitability and further strengthen our operational foundation.”

Marinemax 2025 Q1 financial results

Revenue for the first quarter declined by 11.2 per cent to $468.5m from $527.3m in the same period of fiscal 2024. This decrease was mainly due to lower boat sales and disruptions caused by Hurricanes Helene and Milton. Same-store sales decreased by 11 per cent, compared with an increase of 4 per cent in the first quarter of fiscal 2024 from the same period in fiscal 2023.

Gross profit declined 3.3 per cent to $169.7m, compared with $175.5m in the same period last year. However, the gross profit margin improved to 36.2 per cent, up from 33.3 per cent in the prior-year period, due to the promotional environment, year-over-year sales mix, and higher contributions from the company’s higher-margin operations.

Selling, general and administrative (SG&A) expenses totalled $130.7m, or 27.9 per cent of revenue, compared with $156.5m, or 29.7 per cent, in the same period of fiscal 2024. Adjusted SG&A2, which excludes changes in contingent consideration, hurricane and tornado expenses, intangible amortisation, restructuring expenses, and other costs, decreased 1.5 per cent to $149.4m from $151.7m in the prior-year period.

Interest expense rose to $18.7m, representing 4 per cent of revenue, from $18.4m, or 3.5 per cent, in the first quarter of fiscal 2024. The increase was driven by higher inventory levels, partially offset by lower floor plan financing costs.

Net income for the quarter was $18.1m, with diluted EPS of $0.77, compared with $0.9m, or $0.04 per diluted share, in the prior-year period. Adjusted net income was $4.1m, or $0.17 per diluted share, down from $4.4m, or $0.19 per diluted share, in the first quarter of fiscal 2024. Adjusted EBITDA stood at $26.1m, compared with $26.6m in the prior year.

Fiscal 2025 guidance

The company has reaffirmed its fiscal year 2025 guidance, expecting adjusted net income in the range of $1.80 to $2.80 per diluted share, and adjusted EBITDA between $150m and $180m. These projections do not include the impact of any material acquisitions or unforeseen events, such as changes in global economic conditions.

“While economic conditions in the recreational marine industry remain challenging, we anticipate that the pace of activity improves as we move into the spring selling season,” McGill says.

“Early activity at this year’s retail boat shows has been encouraging, and we believe that our position within the premium category of the segment will enable us to outperform the industry and more meaningfully grow as conditions improve.”