Onewater Marine Inc ((ONEW)) has held its Q2 earnings call. Read on for the main highlights of the call.
Onewater Marine Inc. Faces Challenges Amid Market Share Gains
The recent earnings call for Onewater Marine Inc. painted a mixed picture of the company’s performance in a challenging quarter. While there were positive developments such as market share gains and successful inventory reduction, the decline in new boat sales, challenged margins, and increased expenses highlighted significant hurdles. Overall, the guidance was revised downward, reflecting ongoing uncertainties in the market.
Market Share Gain Despite Industry Decline
Onewater Marine managed to outperform the industry with a same-store sales decline of only 2%, compared to an industry decline of over 10%. This indicates a significant gain in market share, showcasing the company’s resilience in a tough market.
Successful Inventory Reduction
The company achieved a 12% year-over-year and 5% sequential reduction in inventory, outpacing the industry. This strategic move strengthens Onewater Marine’s long-term position and reflects effective inventory management.
Strong Pre-Owned Boat Sales
Pre-owned boat sales surged by 14% to $90 million, driven by an increase in trade-ins and trade-ups. This growth in the pre-owned segment provided a much-needed boost to the company’s overall sales performance.
Improved Financial Performance
Onewater Marine reported a net loss of $375,000 for the fiscal second quarter, a substantial improvement from the $5 million net loss in the previous year. This indicates progress in financial performance despite the challenging environment.
Decline in New Boat Sales
New boat sales fell by 5% to $310 million in the second quarter, contributing to a 1% decrease in total revenue. This decline underscores the challenges faced in the new boat market.
Challenged Gross Margins
Gross profit decreased to $110 million from $120 million in the previous year, impacted by lower margins on exiting brands and pricing environment challenges. This highlights the pressure on profitability.
Increased Selling, General and Administrative Expenses
SG&A expenses rose by 1% to $88 million, with inflationary pressures and costs associated with boat shows contributing to the increase. This rise in expenses poses an additional challenge to the company’s financial performance.
Updated Downward Guidance
Onewater Marine updated its fiscal 2025 guidance, anticipating total sales between $1.7 billion and $1.8 billion, with same-store sales expected to be flat to down in the low single digits. Adjusted EBITDA is forecasted to range from $65 million to $95 million, reflecting tariff impacts and increased costs. This cautious outlook underscores the uncertainties in the market.
In conclusion, Onewater Marine Inc. navigates a challenging landscape with mixed results. While the company has made strides in market share and inventory management, it continues to face significant challenges in new boat sales and profitability. The revised downward guidance reflects the ongoing uncertainties, but the company’s focus on strategic planning and cost alignment offers a path forward.