• Revenue: Increased 3% to $376 million from $364 million in the prior year.
• New Boat Sales: Up 3% to $248 million in the first quarter.
• Pre-owned Boat Sales: Increased 7% to $57 million.
• Same-Store Sales: Up 4% driven by an increase in new unit sales.
• Service Parts and Other Sales: Decreased 1% to $62 million.
• Finance and Insurance Revenue: Increased 28% to $9 million.
• Gross Profit: Decreased 8% to $84 million from $91 million in 2024.
• Selling, General and Administrative Expenses (SG&A): Decreased 1% to $79 million; 21% of sales, down 90 basis points as a percentage of revenue.
• Net Loss: Totaled $14 million or $0.81 per diluted share compared to a net loss of $8 million or $0.49 per diluted share in the prior year.
• Adjusted Loss Per Diluted Share: $0.54 compared to $0.38 in the prior year.
• Total Inventory: $637 million compared to $707 million at December 31, 2023.
• Total Long-term Debt: $428 million, net of $23 million in cash, resulting in net leverage of 5.2x trailing 12-month adjusted EBITDA.
• Total Liquidity: In excess of $40 million, including $23 million of cash.

• Warning! GuruFocus has detected 6 Warning Signs with ONEW.

Release Date: January 30, 2025

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

Positive Points

• OneWater Marine Inc (NASDAQ:ONEW) reported a 3% increase in revenue to $376 million for the first quarter, driven by a 3% rise in new boat sales and a 7% increase in pre-owned boat sales.
• The company successfully reduced inventory by 10% year-over-year, which is expected to lead to lower carrying costs and improved operational efficiency.
• Finance and insurance revenue grew by 28% to $9 million, highlighting the effectiveness of the company's diverse business model.
• Same-store sales increased by 4%, outperforming the industry unit sales, which were down approximately 14% in the categories OneWater Marine Inc (NASDAQ:ONEW) participates in.
• The company is maintaining its fiscal 2025 guidance, anticipating total sales in the range of $1.7 billion to $1.85 billion, with same-store sales expected to rise in the low single digits.

Negative Points

• Gross profit decreased by 8% to $84 million, impacted by lower margins on brands being exited and pricing pressures on new and pre-owned boats.
• The company reported a net loss of $14 million for the first quarter, compared to a net loss of $8 million in the prior year.
• The industry continues to face uncertainty, with no significant market changes expected to alter the company's outlook for the year.
• Interest rates are not expected to decrease as much as previously anticipated, potentially impacting financial relief in the latter half of the year.
• The pre-owned market remains constrained by limited inventory, which continues to be a challenge for OneWater Marine Inc (NASDAQ:ONEW).

Q & A Highlights

Q: Can you discuss the cadence of the quarter and any notable trends? A: October and November were strong months, while December was average due to colder weather and holiday distractions. The Florida locations were slightly impacted by storms in October. Overall, the quarter was solid compared to the previous year. - Philip Austin Singleton, CEO; Anthony Aisquith, COO; Jack Ezzell, CFO

Q: How are exiting brands affecting margins, and what is the outlook for margin profiles? A: Exiting brands are being sold at lower or negative margins, impacting overall margins. However, new year models have healthier margins, and as we move further into the year, we expect margin improvements. We anticipate some margin pressure in the next quarter but expect improvement as we progress into the selling season. - Philip Austin Singleton, CEO; Jack Ezzell, CFO

Q: What is the target for inventory levels by fiscal year-end, and how does it compare to current levels? A: We aim to reduce inventory by over 10% year-over-year by September 2025. While inventory was down 9% this quarter, it may fluctuate as we prepare for the selling season. We are monitoring market demand closely to adjust inventory levels accordingly. - Jack Ezzell, CFO; Philip Austin Singleton, CEO

Q: Can you provide insights into the pre-owned market and its outlook for 2025? A: The pre-owned market remains limited in inventory, and we don't foresee significant improvements soon. The demand for pre-owned boats continues to exceed supply, which has been a consistent trend over the years. - Philip Austin Singleton, CEO

Q: How is the M&A pipeline looking, and what is your approach to acquisitions? A: The M&A pipeline is active, but we are not in a hurry to make acquisitions. We are being cautious and selective, waiting to see how the market evolves over the next few months. We aim to make strategic acquisitions that align with our growth objectives. - Philip Austin Singleton, CEO

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