8-K: OneWater Marine Inc. Announces Fiscal Second Quarter Results, Updates Outlook Amid Macroeconomic Uncertainty

OneWater Marine reported a slight revenue decrease of 1% to $484 million for fiscal Q2 2025 and is updating its full-year outlook due to macroeconomic uncertainty.

Summary

• OneWater Marine Inc. announced its fiscal second quarter results for the period ended March 31, 2025.
• Revenue decreased by 1% to $483.5 million compared to $488.3 million in the same quarter of the previous year.
• Same-store sales decreased by 2%.
• New boat revenue decreased by 5.4%, while pre-owned boat revenue increased by 14.1%.
• Gross profit totaled $110.4 million, down from $120.4 million in the prior year.
• The gross profit margin decreased to 22.8% from the prior year period.
• The company reported a net loss of $0.4 million, compared to a net loss of $4.5 million in the prior year.
• Adjusted diluted earnings per share were $0.13, compared to $0.67 in the prior year.
• Adjusted EBITDA decreased to $17.9 million from $28.3 million in the prior year.
• As of March 31, 2025, cash and cash equivalents were $67.5 million, and total liquidity exceeded $74.0 million.
• Inventory decreased by 12.4% to $602.4 million.
• Total long-term debt was $427.2 million.
• The company is updating its fiscal year 2025 outlook, anticipating revenue in the range of $1.7 billion to $1.8 billion.
• Dealership same-store sales are expected to be flat to down low single digits.
• Adjusted EBITDA is expected to be in the range of $65 million to $95 million.
• Adjusted Diluted Earnings Per Share are expected to be in the range of $0.75 to $1.25.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company highlights its strategic initiatives and inventory management, the financial results show a decline in revenue, profitability, and adjusted EBITDA, and the updated guidance reflects a more cautious outlook.

Positives

• Pre-owned boat revenue increased by 14.1%, driven by higher unit sales and average price.
• Finance & insurance income increased as a percentage of total boat sales.
• Inventory decreased by 12.4% year-over-year, reflecting strong inventory management.
• Net loss decreased from $(4.5) million to $(0.4) million year over year.

Negatives

• Overall revenue decreased by 1% compared to the same quarter last year.
• Same-store sales decreased by 2%.
• New boat revenue decreased by 5.4%.
• Gross profit decreased from $120.4 million to $110.4 million.
• Gross profit margin decreased to 22.8%.
• Adjusted EBITDA decreased to $17.9 million from $28.3 million in the prior year.

Risks

• Macroeconomic uncertainty may impact consumer demand.
• The company is exiting select brands, which could impact gross profit margin.
• The West Coast of Florida is still recovering from Hurricanes Helene and Milton, impacting sales.
• The company is taking a more cautious approach to the selling season given the impact of considerable macroeconomic uncertainty on consumer demand.

Future Outlook

For fiscal year 2025, OneWater anticipates revenue between $1.7 billion and $1.8 billion, with same-store sales being flat to down low single digits. Adjusted EBITDA is expected to be between $65 million and $95 million, and adjusted diluted earnings per share are expected to be between $0.75 and $1.25.

Management Comments

• Austin Singleton, Chief Executive Officer at OneWater, commented that their teams executed well in a challenging environment.
• Singleton noted that same store sales decreased 2%, driven primarily by lower sales in the West Coast of Florida which is still recovering from Hurricanes Helene and Milton.
• Management stated they continue to benefit from their strategic approach to inventory management and strong operational execution, which led to a 12% inventory reduction year over year and 5% sequentially.
• Management stated they do not expect the announced tariffs to have a material impact on their current model year product and will work closely with their manufacturing partners as they prepare for the upcoming model year boats.
• Management stated they are taking a more cautious approach to the selling season given the impact of considerable macroeconomic uncertainty on consumer demand.
• Management stated they remain focused on executing their strategic priorities, rationalizing their brand portfolio and accelerating cost reduction initiatives to position OneWater for long-term success.

Industry Context

The marine industry is facing macroeconomic headwinds, impacting consumer demand. OneWater's focus on inventory management and cost reduction aligns with strategies other retailers are likely employing to navigate the uncertain environment. The company's performance is also affected by regional factors, such as hurricane recovery in Florida.

Comparison to Industry Standards

• It is difficult to compare OneWater Marine's results directly to industry standards without specific competitor data.
• However, marine retailers such as MarineMax and Bass Pro Shops (privately held) also operate in the premium boat market.
• A 1% revenue decrease and a 2% same-store sales decrease suggest OneWater is facing similar challenges as other retailers in the discretionary spending sector.
• Inventory reduction of 12.4% indicates proactive management, which is crucial in a softening market.
• The updated guidance reflects a cautious outlook, aligning with potential industry-wide adjustments due to economic uncertainty.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue and profitability, as well as the updated, more cautious outlook.
• Employees may be affected by cost reduction initiatives and the rationalization of the brand portfolio.
• Customers may experience changes in product offerings as the company exits select brands.
• Suppliers may see adjustments in orders as the company manages its inventory and navigates the uncertain macroeconomic environment.

Next Steps

• OneWater will host a conference call on May 1st to discuss the fiscal second quarter earnings.
• The company will continue to focus on executing its strategic priorities, rationalizing its brand portfolio, and accelerating cost reduction initiatives.

Key Dates

Keywords

OneWater Marine, financial results, earnings, revenue, same-store sales, EBITDA, boat sales, marine retail, inventory management