MarineMax has continued to experience a decline in profits in challenging retail conditions, despite reporting a modest increase in its revenue for its second fiscal quarter ending 31 March, 2024.

“Although we continue to operate in a challenging market environment, as evidenced by industrywide larger than expected declines in boat registrations, we drove an increase in sales in the second quarter. Our gross margin also remains strong as a direct result of the strategic growth in our higher-margin businesses,” says Brett McGill, Chief Executive Officer and President of MarineMax.

The boating conglomerate reported revenue of $582.9 million. The rise in revenue was accompanied by a 2% increase in same-store sales, demonstrating the company's ability to maintain customer demand. And despite grappling with elevated interest rates and persistent inflation, MarineMax managed to uphold its gross profit margin at 32.7%, albeit with a 2.5% decrease from the same period the previous year. This is slightly marred by a decline in gross profit of 5.2% to $190.4 million, down from $200.9 million in the prior-year period.

“Our performance was impacted by ongoing softness in the marine market, highlighting broader macroeconomic concerns including elevated interest rates and persistent inflation,” adds McGill. “While interest in boating remains encouraging, more aggressive promotional activity was required to assist consumers in making purchase decisions.”

Selling, General, and Administrative (SG&A) expenses amounted to £169.0 million, representing 29% of revenue, marking a rise from 25.5% of revenue during the same period last year. After excluding transaction costs, changes in contingent consideration, weather events and other non-recurring items in 2024 adjusted SG&A increased by £16.4 million or 11% compared to 2023.

Interest expenses surged to $19.4 million, reflecting the impact of higher interest rates and increased inventory levels. Consequently, net income for the quarter amounted to $1.6 million, a sharp decrease from $30.0 million reported in the previous year's corresponding period. Adjusted net income stood at $4.1 million, with adjusted EBITDA for the quarter totalling $29.6 million, down from $57.4 million in the prior-year period.

Looking to the future, one of the significant milestones highlighted by McGill was the acquisition of Williams Tenders USA, a move aimed at fortifying MarineMax's position in the yacht market.

“We are taking additional steps to reduce expenses while maintaining our customer experience and service,” concludes McGill. “These additional measures are directed at better aligning our cost structure with the current environment. Our actions will enhance our strong cash position and healthy balance sheet, positioning us for greater opportunities as market conditions improve.”

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Marine Max (Woods & Oviatt)

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