MarineMax: record revenue, but profits plummet
The boating conglomerate’s fiscal first quarter felt the sting of rising expenses, high interest rates and tough retail conditions…
MarineMax has once again reported record revenue for the first quarter of its fiscal year, with the figure exceeding $525 million. However, a surge in expenses, operational costs and rising interest rates resulted in a drastic decline in net income, plummeting over 95% compared to the same period last year.
“I’m proud of our team’s ability to drive a strong close to the December quarter, generating the highest first-quarter revenue in our history,” says Brett McGill, Chief Executive Officer and President of MarineMax. “This growth came despite a challenging retail environment, which required us to take more aggressive pricing actions than expected.”
Revenue in the fiscal 2024 first quarter (ending December 31, 2023) reached a record $527.3 million, a 4% increase from $507.9 million in the comparable period last year. The growth was mainly driven by higher new and used boat sales, contributing to a 4% increase in same-store sales.
However, there was a slight dip in profit, decreasing by 6.1% to $175.5 million from the prior-year period. The margin of 33.3%, while historically high, decreased by 350 basis points (3.5%) from 36.8% in the fiscal 2023 first quarter. According to McGill, this is the result of more aggressive promotional strategies in response to retail environment challenges during the 2024 first quarter.
Selling, general and administrative expenses totalled $156.5 million, or 29.7% of revenue, in the first quarter, rising from $150.4 million (29.6% of revenue) for the same period last year. The increase was driven by acquisitions completed during the year, as well as inflation and other specific cost increases.
Rising interest rates continue to have an impact, with interest expenses totalling $18.4 million (3.5% of revenue) in the first quarter, compared with $9.5 million, reflecting higher interest rates and increased inventory in the firm's fiscal 2024 period.
This has ultimately led to a dramatic decline in net profits. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) for the quarter was $26.6 million, marking a sharp 50% decline compared to the same period last year when the Adjusted EBITDA was at $53.2 million.
Adjusted net income (net income that excludes certain one-time or non-operational items) amounted to $4.4 million, plummeting 83.8% from the same period last year, which was more substantial at $27.3 million.
MarineMax disclosed a net income (the total profit a company has earned after deducting all expenses, taxes, and interest) of $0.9 million, reflecting the notable 95.7% decrease from the corresponding period last year, where the net income stood significantly higher at $19.7 million.
Despite the limited profitability from the first quarter, McGill remains confident that its balance sheet and cash position will allow it to continue executing its long-term growth plans. “With the seasonally smallest quarter of the year behind us, we are cautiously encouraged by the reasonably strong start to the winter boat show season, along with the increased support from our industry-leading manufacturing partners,” he says.
Earlier this month, MarineMax announced the planned acquisition of Williams Tenders USA. For the remainder of its fiscal 2024, McGill says that the company is focused on capturing further synergies and increasing its earnings power, embedded in the acquisitions it completed over the last few years.
“In addition, we continue to expand our portfolio of higher-margin product and service offerings that complement our business model,” he adds. “The growth of the yacht and luxury yacht markets represents a tailwind for our business as we advance our strategic priorities.”
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