Challenging retail environment, says MarineMax
A challenging retail environment has led to MarineMax being “required . . . to take more aggressive pricing actions,” says its CEO Brett McGill. This comes as the company has announced its results for its fiscal first 2024 quarter, ending December 31, 2023. The company, which bills itself as the ‘world’s largest recreational boat, yacht and superyacht services company’, says it saw a record December quarter revenue of $527.3m, with a gross profit margin of 33.3 per cent.
Revenue increased to $527.3m from $507.9m in the comparable period last year. A 4 per cent top-line growth was driven largely by higher new and used boat sales, contributing to a 4 per cent increase in same-store sales.
Gross profit decreased 6.1 per cent to $175.5m from $186.9m in the prior-year period.
“I’m proud of our team’s ability to drive a strong close to the December quarter, generating the highest first quarter revenue in our history,” says Brett McGill, CEO and president of MarineMax. “This growth came despite a challenging retail environment which required us to take more aggressive pricing actions than expected.
“Our pricing actions did result in lower gross margins and profitability. This was primarily due to increased discounting on certain boat models in response to the softer retail environment, as well as a greater mix of larger boats, which historically carry a lower gross margin than other product categories.”
MarineMax‘s first quarter gross profit margin of 33.3 per cent, while historically high, has decreased 350 basis points from 36.8 per cent in the fiscal 2023 first quarter.
“However, with the seasonally smallest quarter of the year behind us, we are cautiously encouraged by the reasonably strong start to the winter boat show season, along with the increased support from our industry leading manufacturing partners,” McGill continues.
“Our healthy balance sheet and strong cash position allow us to continue to execute on our long-term growth plans. In fiscal 2024, we are focused on capturing further synergies and increasing the earnings power of MarineMax imbedded in the acquisitions we completed over the past several years. In addition, we continue to expand our portfolio of higher-margin product and service offerings that complement our business model.
“This month, we announced the planned acquisition of Williams Tenders USA, the exclusive distributor in the United States and the Caribbean for the premier brand of rigid inflatable jet tenders for the luxury yacht market. The growth of the yacht and luxury yacht markets represents a tailwind for our business as we advance our strategic priorities.”
MarineMax has over 130 locations worldwide, including 81 dealerships and 66 marina and storage facilities. Its integrated business includes IGY Marinas, Fraser Yachts Group and Northrop & Johnson, and Cruisers Yachts among others. Earlier in January, the company announced it had entered into a definitive agreement to acquire Williams Tenders USA. The acquisition is expected to close by March 31, 2024, and be accretive in its first full year of operations.
