• Revenue: Decreased 1% to $484 million in Q2 2025 from $488 million in Q2 2024.
• New Boat Sales: Down 5% to $310 million.
• Pre-owned Boat Sales: Increased 14% to $90 million.
• Same-Store Sales: Down 2% due to a decrease in new boat sales.
• Service Parts and Other Sales Revenue: Increased 2% to $69 million.
• Gross Profit: Declined to $110 million from $120 million in the prior year.
• SG&A Expenses: Increased 1% to $88 million, representing 18% of sales.
• Operating Income: Increased to $16 million.
• Adjusted EBITDA: $18 million.
• Net Loss: $375,000 or $0.02 per diluted share, compared to a net loss of $5 million or $0.27 per diluted share in the prior year.
• Adjusted Income Per Diluted Share: $0.13 compared to $0.67 in the prior year.
• Total Inventory: $602 million as of March 31, 2025, down from $687 million on March 31, 2024.
• Total Long-term Debt: $427 million as of March 31, 2025.
• Net Leverage: 5.4 times trailing 12 months adjusted.
• Fiscal 2025 Guidance: Total sales expected to be $1.7 to $1.8 billion; adjusted EBITDA forecasted at $65 million to $95 million; adjusted EPS projected at $0.75 to $1.25.

• Warning! GuruFocus has detected 7 Warning Signs with ONEW.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• OneWater Marine Inc (NASDAQ:ONEW) outperformed the industry with a 2% decline in same-store sales compared to an industry decline of over 10%.
• The company successfully reduced inventory by 12% year-over-year and 5% sequentially, improving working capital and long-term positioning.
• Pre-owned boat sales increased by 14%, supported by higher trade-ins and trade-ups, indicating strong demand in this segment.
• Financing and insurance revenue showed strength, with penetration up slightly, highlighting the effectiveness of in-store financing programs.
• The company is on track to exceed its initial full-year goal of a 10% reduction in inventory, now expecting a 10-15% reduction, which will lead to a more productive lineup of brands.

Negative Points

• Gross margins remain challenged due to a competitive promotional environment, impacting profitability.
• Higher costs associated with boat shows and inflationary pressures led to increased selling, general, and administrative expenses.
• Revenue decreased by 1% to $484 million, with new boat sales down 5%, reflecting challenges in the new boat segment.
• The company reported a net loss of $375,000 for the fiscal second quarter, although this was an improvement from the prior year's loss.
• The macroeconomic environment remains uncertain, with potential impacts from tariffs and increased costs affecting the business outlook.

Q & A Highlights

Q: What are you seeing in April from a demand standpoint post the tariff announcements? A: April was in line with last year, with units and dollars slightly up, which is positive. As we move into May, the beginning looks ahead of last year. The main focus is on improving margins as inventory corrects itself, positioning us well for the bulk of the season.

Q: The margins on used boats were softer than expected. What drove that margin down? A: The margin was affected by the model mix between pre-owned, brokerage, and consignment sales. We are being more aggressive with trades to keep everything moving forward, which is positive as it indicates customers are trading up.

Q: Can you provide more color on the share gains, particularly in the premium versus value segment? A: Most share gains are in the premium segment, where we primarily operate. While the industry is down over 10%, we are down around 2%, which is positive and aligns with our expectations.

Q: Are you having to discount heavily to move more volume and gain share? A: Yes, there is strategic discounting, especially on non-current models due to high interest rates and competitive pressures. However, we are making decent margins on current year models, and as inventory cleans up, we expect modest gross margin increases.

Q: How do you see the industry evolving post-slowdown? Will there be fewer brands, leading to a more rational market? A: The industry may see consolidation or some brands struggling due to higher costs and a closed gap between premium and lower brands. We aim to focus on premium brands and consolidate with top manufacturers, exiting 15 brands to strengthen our position.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.