United States boat retailer OneWater Marine has announced results for its fiscal second quarter ended March 31, 2024.
The Georgia-based firm’s revenue decreased 7 per cent in Q2 to $488m, while same-store sales decreased 5 per cent for the quarter, compared to an 11 per cent increase in the prior year period.
The chain reports an increase in pre-owned boat sales of 4.3 per cent—attributed to the increase in pre-owned sales from trade-ins.
“Our second quarter results were largely in line with our expectations and historical seasonality as we continue to outperform the industry,” says Austin Singleton, OneWater chief executive.
“Like the first quarter, the selling environment remains competitive, and boat pricing continues to moderate. However, our margins are stabilising, and finance & insurance penetration remains strong, which is encouraging as we head into the summer selling season.
OneWater fiscal second quarter 2024 results
Photo courtesy of OneWater.
The company went from a net income of $27m in Q2 2023 to a net loss of $4.5m this year. OneWater‘s revenue for Q2 2024 was $488.3m, a decrease of 6.9 per cent compared to $524.3m year-on-year.
New boat revenue decreased 7.9 per cent driven by a decrease in units sold and a decrease in average price per unit. Pre-owned boat revenue increased 4.3 per cent driven by the increase in pre-owned sales from trade-ins.
Finance and insurance income decreased 3.9 per cent compared to the prior year quarter but was in-line as a percentage of total boat sales. Service, parts, and other sales were down 13.7 per cent compared to the prior-year quarter. Excluding the impact of the disposal of Roscioli Yachting Center and Lookout Marine, which occurred in the fourth quarter of 2023, dealership segment service, parts and other sales were up. Distribution segment service, parts, and other sales were lower — this is attributed to reduced production by boat manufacturers.
Gross profit totalled $120.4m for the fiscal second quarter of 2024, down $26.3m from $146.7m year-on-year. A gross profit margin of 24.6 per cent decreased by 340 basis points compared to the prior year period. The firm attributes this to the ‘normalisation of new and pre-owned boat pricing’ and lower revenue from higher-margin businesses. Sequentially, the gross profit margin decreased by 50 basis points as the industry stabilised.
Fiscal second quarter of 2024, selling, general and administrative expenses totalled $86.5m, or 17.7 per cent of revenue, compared to $90.2m, or 17.2 per cent of revenue, in the same quarter of 2023.
As it moved to reduce overheads and expenses, the company recorded $11.8m in restructuring charges, including reduction of headcount, closure of satellite locations, termination of manufacturer relationships, and abandonment of IT-related projects.
Other expenses for the fiscal second quarter of 2024 were $2.5m. The increase compared to the prior year was primarily driven by costs associated with the impacts of two separate EF3 tornado events that significantly impacted its operations in Russell’s Point, Ohio and Panama City Beach, Florida.
“As we assess the business in a normalised environment, we are tracking in line with pre-Covid seasonal metrics, reinforcing the strength and durability of our business model,” says Singleton. “In addition to our variable cost structure, we proactively took actions in the quarter to optimise our cost structure. We remain committed to judicious expense management and we have additional flexibility, if necessary.
“We believe the business is on the right trajectory, and we will continue to execute on our proven playbook to drive growth and enhance value for our holders.”
The company reported a net loss of $0.27 per diluted for Q2 2024, compared to net income of $1.56 in 2023. Adjusted diluted earnings per for the fiscal second quarter of 2024 was $0.67, compared to adjusted diluted earnings per of $1.81 in 2023.
