‘Softness’ in market leads to gross profit decline for MarineMax

MarineMax, which describes itself as the world’s largest recreational boat, yacht and superyacht services company, has announced results for its second quarter ended March 31, 2024.

In its summary, it says its experienced a same-store sales increase of 2 per cent, a gross profit margin of 32.7 per cent and March quarter revenue of $582.9 million (top-line growth was primarily driven by an increase in boat sales).

Gross profit decreased 5.2 per cent to $190.4 million from $200.9 million in the prior-year period. MarineMax‘s gross profit margin of 32.7 per cent decreased 250 basis points from 35.2 per cent in the comparable period last year, as a higher level of promotional activity amid challenging retail conditions resulted in lower boat margins.

“Our performance was impacted by ongoing softness in the marine market, highlighting broader macroeconomic concerns including elevated interest rates and persistent inflation,” says Brett McGill, CEO and president MarineMax. “While interest in boating remains encouraging, more aggressive promotional activity was required to assist consumers in making purchase decisions.

“Although we continue to operate in a challenging market environment, as evidenced by industry-wide larger than expected declines in boat registrations, we drove an increase in sales in the second quarter. Our gross margin also remains strong as a direct result of the strategic growth in our higher-margin businesses.

“We continue to focus on driving growth through investments in strong, higher-margin businesses that enhance the customer experience and expand our margin profile. During the quarter, we completed the purchase of Williams Tenders USA. This transaction advances our growth strategy, giving MarineMax distribution exclusivity in the US and the Caribbean for the world’s premier brand of rigid inflatable jet tenders for the luxury yacht market.

“We are taking additional steps to reduce expenses while maintaining our customer experience and service. These additional measures are directed at better aligning our cost structure with the current environment. Our actions will enhance our strong cash position and healthy balance sheet, positioning us for greater opportunities as market conditions improve,” says McGill.