Al Root

Malibu Boats posted strong quarterly sales results, but its forecasts for the coming fiscal year have shaken investors' confidence. That is dragging down shares of leisure and power-sports companies.

Thursday, Malibu announced fiscal fourth-quarter earnings per share of 42 cents from sales of $207 million. Wall Street was looking for EPS of 46 cents, but sales beat the $196 million analysts had penciled in.

The problem is that for fiscal year 2026, the 12 months through June, Malibu expects sales to be "flat to down mid-single digits." That implies 2026 sales of about $790 million. Wall Street was looking for closer to $915 million, leaving a gap of $125 million, or 14% of analysts' consensus call.

The shortfall could have come from a number of factors -- bloated dealer inventories, for example, have been a problem for Deere -- but the problem this time is caution among buyers as a result of higher interest rates and market volatility resulting from tariffs.

It comes down to "more of the consumer," CEO Steve Menneto said on a conference call to discuss the results.

Malibu stock was down 14% in midday trading at $33.99, while the S&P 500 was up 0.1% and the Dow Jones Industrial Average was down 0.2%.

Shares of other leisure and power-sports companies were under pressure. Shares of RV makers Thor Industries and Winnebago were down 2.3% and 3.1%, respectively. Shares of boat maker Brunswick were off 2.9%. And stock in Polaris and BRP, short for Bombardier Recreational Products, was down 3.1% and 1%, respectively.

Coming into Thursday trading, those five stocks were down an average of about 23% over the past 12 months. Only Thor had eked out a small positive return. Malibu Boats stock was down about 3%.

Malibu is focused on costs. Management did some buying before tariffs took effect to avoid cost increases. And improving manufacturing efficiency is a "continual" process, Menneto said.

For 2026, Malibu sees tariffs raising costs by 1.5% to 3%. That is roughly $10 to $20 million headwind.

In the long run, Menneto is confident buyers will come back. For now, they are hesitant.

Write to Al Root at allen.root@dowjones.com

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August 28, 2025 11:47 ET (15:47 GMT)

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