Onewater Marine Inc ((ONEW)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Onewater Marine Inc’s latest earnings call presented a mixed sentiment, with a blend of positive developments in revenue growth, inventory management, and finance and insurance revenue. Despite these advancements, the company faces challenges such as declining margins, weather-related impacts, and an increased net loss. The cautious optimism for 2025 reflects these balanced factors.
Revenue Increase and Market Share Gains
Onewater Marine Inc. reported a 3% increase in overall revenue, with same-store sales rising by 4%. This growth was primarily driven by a low double-digit increase in new unit sales, which significantly outpaced the industry, highlighting the company’s successful strategies in capturing market share.
Inventory Management Success
The company’s effective management of inventory levels, which are down 10% year-over-year, has led to a decrease in carrying costs and an improvement in operational efficiency. This strategic focus on inventory has been pivotal in maintaining the company’s financial health amid industry challenges.
Finance and Insurance Revenue Growth
Finance and insurance revenue saw a substantial increase of 28%, reaching $9 million. This growth underscores strong finance penetration and has been instrumental in mitigating the pressures on margins, showcasing the benefits of Onewater’s diverse business model.
Cost Reduction Initiatives
Onewater Marine Inc. successfully implemented cost reduction strategies, resulting in a 1% decrease in selling, general, and administrative expenses, both on a dollar basis and as a percentage of total revenue. This efficiency reflects the company’s commitment to optimizing its operational expenditure.
Margin Decline
Despite positive revenue growth, the company experienced an 8% decrease in gross profit, down to $84 million. This decline is attributed to lower margins on brands being exited and changes in new and pre-owned boat pricing, which have posed challenges to maintaining profitability.
Impact of Weather and Hurricanes
Sales in Florida were notably impacted by Hurricane Helene, which led to the temporary closure of several stores. Consequently, sales in the affected area saw a mid-single-digit decline compared to the previous year, reflecting the vulnerability of operations to weather-related disruptions.
Net Loss Increase
The net loss for the first quarter increased significantly to $14 million, or $0.81 per diluted share, up from a net loss of $8 million or $0.49 per diluted share in the previous year. This increase highlights the financial challenges the company is navigating amidst a complex market environment.
Forward-Looking Guidance
Looking ahead, OneWater Marine Inc. remains cautiously optimistic about 2025, despite the industry’s challenging environment. The company reported a 3% revenue increase to $376 million and a 4% rise in same-store sales for the first quarter. Inventory management continues to be a focus, with a 10% reduction year-over-year. While margins face pressure, the company anticipates total sales between $1.7 billion and $1.85 billion and adjusted EBITDA of $80 million to $110 million for fiscal 2025, emphasizing its commitment to adapting to market dynamics.
In summary, Onewater Marine Inc’s earnings call reflects a balanced view of progress and challenges. While the company has achieved notable revenue growth and operational efficiencies, it must tackle issues like declining margins and weather impacts. The cautious optimism for 2025 underscores a strategic focus on navigating the industry’s complexities and leveraging diverse revenue streams.
