OneWater Marine’s Mixed Earnings Call: Growth Amid Challenges

Onewater Marine Inc ((ONEW)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for OneWater Marine Inc. presented a balanced sentiment, reflecting both achievements and challenges. The company reported growth in revenue and maintained strong same-store sales performance despite a tough industry environment. However, it faced significant hurdles with declining gross profit and new boat sales. On a positive note, inventory management and pre-owned boat sales were highlighted as strong points, indicating a mixed performance overall.

Revenue Growth

OneWater Marine reported a 2% increase in total revenue, reaching $553 million in the third quarter. This growth is notable given the challenging market conditions, showcasing the company’s resilience and strategic market positioning.

Same-Store Sales Performance

Despite the industry experiencing a decline of over 15% in the categories where OneWater Marine operates, the company achieved a 2% growth in same-store sales. This performance underscores the effectiveness of their market strategies and execution.

Inventory Management Success

The company successfully reduced its total inventory by 14% year-over-year and is on track to meet its target of a 10% to 15% reduction by year-end. This strategic inventory management is a positive highlight in the earnings call.

Pre-Owned Boat Sales Growth

Pre-owned boat sales surged by 18% to $126 million, marking the third consecutive quarter of growth. This segment continues to be a strong performer for OneWater Marine.

Positive Customer Feedback

Early feedback from customers on new boat models has been positive, with owners appreciating the latest innovations. This bodes well for future sales and customer retention.

Decline in Gross Profit

Gross profit declined to $129 million from $133 million in the previous year, primarily due to lower new boat volumes and a competitive promotional environment. This decline poses a challenge for the company moving forward.

New Boat Sales Decline

New boat sales decreased by 2% to $326 million in the third quarter. This decline reflects broader industry trends and presents a challenge for OneWater Marine.

Parts and Service Revenue Decline

Revenue from service parts and other sales fell by 2% to $83 million, driven by lower production from boat manufacturers. This decline is another area of concern for the company.

Decreased Net Income

Net income for the fiscal third quarter was $11 million or $0.65 per diluted share, down from $17 million or $0.99 per diluted share in the prior year. This decrease highlights the financial pressures faced by OneWater Marine.

Forward-Looking Guidance

Looking ahead, OneWater Marine updated its full-year guidance, anticipating total revenue to range between $1.8 billion and $1.85 billion, with adjusted EBITDA between $65 million and $80 million. Adjusted earnings per diluted share are expected to be between $0.50 and $0.75. The company remains focused on optimizing inventory, disciplined cost management, and leveraging operational expertise to outperform industry trends.

In summary, OneWater Marine’s earnings call presented a mixed picture, with both positive and negative aspects. While the company achieved revenue growth and strong same-store sales, challenges remain with declining gross profit and new boat sales. The company’s strategic focus on inventory management and pre-owned boat sales offers a path forward amidst industry challenges.