MarineMax Reports Fiscal 2024 Third Quarter Results

Rhea-AI Summary

MarineMax (NYSE: HZO) reported its fiscal 2024 third quarter results, showcasing a 5% year-over-year revenue increase to $757.7 million. The company achieved a 4% same-store sales growth and maintained a strong gross margin of 32.0%. Net income for the quarter was $31.6 million, with diluted EPS of $1.37 and adjusted diluted EPS of $1.51. Despite retail headwinds, MarineMax's strategic expansion into high-margin, less cyclical revenue streams has strengthened its financial position. The company reaffirmed its fiscal 2024 guidance, projecting adjusted net income between $2.20 and $3.20 per diluted share and adjusted EBITDA ranging from $155 million to $190 million.

Positive

• Revenue increased 5% year-over-year to $757.7 million
• Same-store sales grew by 4%
• Gross margin remained strong at 32.0%
• Formation of new SuperYacht Division (SYD) to generate synergies
• Strategic cost-cutting actions initiated to improve operating leverage
• Reaffirmed fiscal 2024 financial guidance

Negative

• Net income decreased to $31.6 million from $44.4 million in the same period last year
• Gross profit margin decreased 180 basis points year-over-year
• SG&A expenses increased to 23.9% of revenue from 23.4% in the prior year
• Interest expense rose to $18.2 million (2.4% of revenue) from $14.8 million (2.1% of revenue)
• Adjusted EBITDA declined to $70.4 million from $83.5 million in the prior-year period

Insights

Financial Analyst

MarineMax's Q3 fiscal 2024 results present a mixed picture. While the company achieved 5% year-over-year revenue growth to $757.7 million and a 4% increase in same-store sales, there are some concerning trends beneath the surface.

The gross profit margin contracted by 180 basis points to 32.0%, indicating increased promotional activity to drive boat sales in a challenging retail environment. This suggests pressure on the core business, despite management's efforts to diversify into higher-margin services.

Net income declined to $31.6 million ($1.37 per diluted share) from $44.4 million ($1.98 per diluted share) in the prior year. This 28.8% drop in net income is significant and warrants attention.

The company's strategy to expand into high-margin, less cyclical revenue streams like marinas and superyacht services appears to be a prudent long-term move. However, the full benefits are yet to materialize in the bottom line.

The reaffirmation of fiscal 2024 guidance ($2.20 to $3.20 Adjusted EPS) despite the Q3 performance suggests management's confidence in Q4, but also implies a wide range of potential outcomes.

Investors should monitor the effectiveness of cost-cutting initiatives and the performance of the new SuperYacht Division in the coming quarters to gauge the success of MarineMax's strategic shift.

Market Research Analyst

MarineMax's Q3 results reflect broader trends in the recreational boating industry. The 4% comparable same-store sales growth is noteworthy given the persistent retail headwinds mentioned by CEO Brett McGill. This outperformance suggests MarineMax is gaining market share or benefiting from its diversified business model.

The formation of the SuperYacht Division (SYD) is a strategic move to capitalize on the growing superyacht market. This sector has shown resilience even in economic downturns, as ultra-high-net-worth individuals are less affected by short-term economic fluctuations.

However, the increased promotional activity to drive boat sales indicates softening demand in the core recreational boat market. This aligns with industry reports of normalizing demand following the pandemic-driven boom.

The company's focus on expanding high-margin, less cyclical revenue streams is prudent. Marinas, in particular, offer stable recurring revenue and can act as a buffer against cyclical boat sales.

The rise in interest expense to 2.4% of revenue from 2.1% last year reflects the broader economic environment of higher interest rates. This could potentially impact consumer financing for boat purchases, adding another headwind to retail sales.

Overall, MarineMax's strategy appears well-aligned with industry trends, but execution and the pace of economic recovery will be important in the coming quarters.

~ Posts June Quarter Revenue of $757.7 Million, Up 5% Year-over-Year ~

~ Gross Margin of 32.0% Highlights Successful Strategy of Expansion into Higher-Margin Businesses ~

~ Reports Comparable Same-Store Sales Growth of 4% ~

~ Reaffirms Fiscal 2024 Financial Guidance ~

~ Hosts Earnings Conference Call at 10:00 a.m. ET Today ~

CLEARWATER, Fla.--(BUSINESS WIRE)-- MarineMax, Inc. (NYSE: HZO) (“MarineMax” or the “Company”), the world’s largest recreational boat, yacht and superyacht services company, today announced results for its fiscal 2024 third quarter ended June 30, 2024.

Fiscal 2024 Third Quarter Summary

• June quarter revenue of $757.7 million
• Same-store sales increase of 4%
• Gross profit margin of 32.0%
• Net income of $31.6 million, or diluted EPS of $1.37; Adjusted diluted EPS¹ of $1.51
• Adjusted EBITDA¹ of $70.4 million

CEO & President Commentary

“Despite persistent retail headwinds in the third quarter, our team executed well, delivering 5% top-line growth,” stated Chief Executive Officer and President Brett McGill. “Our solid third-quarter performance in this challenging operating environment underscores the importance of our value-creation strategy, which focuses on expanding our high-margin, less cyclical revenue streams. This strategic expansion, encompassing marinas, superyacht services, and other offerings, has strengthened our gross margin profile—now consistently exceeding 30%—and enhanced our cash flow generation and balance sheet resilience. These improvements come at a crucial time, as macroeconomic softness weighs on retail boat margins industry-wide. By strategically realigning our business, we’ve better positioned ourselves to weather market fluctuations and capitalize on emerging opportunities across our diverse portfolio.

“The recent formation of our new SuperYacht Division (SYD) exemplifies our strategy to generate increasing operating and commercial synergies across our portfolio,” McGill said. “The SYD integrates the operations of Fraser Yachts, Northrop & Johnson, Fairport Yacht Management, SuperYacht Management and Atalanta Golden Yachts (AGY), streamlining the back-office functions of these businesses into a unified entity. Our expansion into superyacht services began many years ago as our existing Azimut, Galeon, and Ocean Alexander customers, and others from our retail dealership operations, migrated to increasingly larger yachts. The complexity of these vessels demanded specialized services, which our SYD companies are exceptionally well-positioned to provide.

“As part of our long-term operational improvement plan, we initiated strategic cost-cutting actions to better align our expense structure with the current operating environment and improve operating leverage,” McGill said. “During the fourth quarter and into fiscal 2025, we expect to see increasing cost savings from these initiatives, which will further improve our cash flows.”

Fiscal 2024 Third Quarter Results

Revenue in the fiscal 2024 third quarter increased 5% to $757.7 million from $721.8 million in the comparable period last year. The top-line growth was primarily driven by an increase in boat sales. On a comparable same-store basis, revenue increased 4%, reflecting higher new and used boat revenue as well as other areas of the Company’s Retail Operations segment, which includes marina, parts, finance and insurance, Super Yachts Group and Charter.

Gross profit decreased 1.0% to $242.1 million from $243.8 million in the prior-year period. Gross profit margin of 32.0% decreased 180 basis points from 33.8% in the comparable period last year, reflecting a higher level of promotional activity to drive boat sales in the face of challenging retail operating conditions.

Selling, general, and administrative (SG&A) expenses totaled $181.1 million, or 23.9% of revenue, in the third quarter, compared with $169.2 million, or 23.4% of revenue, for the comparable period last year. Excluding transaction and other costs, intangible amortization, changes in contingent consideration, weather events, and restructuring expense in the 2024 and 2023 period, Adjusted SG&A² increased $10.3 million, or 6.2%, from the same period in fiscal 2023. This increase partly reflected restructuring expenses and new locations such as AGY, C&C Boat Works and Williams Jet Tenders, which were added since the beginning of the fiscal 2023 third quarter.

Interest expense was $18.2 million, or 2.4% of revenue in the third quarter, compared with $14.8 million, or 2.1% of revenue in the prior-year period, reflecting higher interest rates and increased inventory compared with the third quarter of fiscal 2023.

Net income in the third quarter was $31.6 million, or $1.37 per diluted share, compared with net income of $44.4 million, or $1.98 per diluted share, in the same period last year. Adjusted net income¹ in the third quarter was $34.8 million, or $1.51 per diluted share, compared with $46.5 million, or $2.07 per diluted share, in the prior-year period. Adjusted EBITDA¹ for the quarter ended June 30, 2024, was $70.4 million, compared with $83.5 million for the comparable period last year.

Fiscal 2024 Guidance

Based on results to date, current business conditions, retail trends and other factors, the Company reaffirms its fiscal year 2024 Adjusted net income^1,3 guidance range of $2.20 to $3.20 per diluted share. The Company also reaffirms its fiscal year 2024 Adjusted EBITDA^1,3 guidance range of $155 million to $190 million. These expectations do not consider or give effect for, among other things, material acquisitions that may be completed by the Company during fiscal 2024 or other unforeseen events, including changes in global economic conditions.

Conference Call Information

MarineMax will discuss its fiscal 2024 third quarter financial results on a conference call starting at 10:00 a.m. ET today. The conference call can be accessed via the “Investors” section of the Company's website: www.marinemax.com, or by dialing 844-825-9789 (U.S. and Canada) or 412-317-5180 (International). An online replay will be available within one hour of the conclusion of the call and will be archived on the website for one year.

About MarineMax

As the world’s largest lifestyle retailer of recreational boats and yachts, as well as yacht concierge and superyacht services, MarineMax (NYSE: HZO) is United by Water. We have over 125 locations worldwide, including over 75 dealerships and 65 marina and storage facilities. Our integrated business includes IGY Marinas, which operates luxury marinas in yachting and sport fishing destinations around the world; Fraser Yachts Group and Northrop & Johnson, leading superyacht brokerage and luxury yacht services companies; Cruisers Yachts, one of the world’s premier manufacturers of premium sport yachts and motor yachts; and Intrepid Powerboats, a premier manufacturer of powerboats. To enhance and simplify the customer experience, we provide financing and insurance services as well as leading digital technology products that connect boaters to a network of preferred marinas, dealers, and marine professionals through Boatyard and Boatzon. In addition, we operate MarineMax Vacations in Tortola, British Virgin Islands, which offers our charter vacation guests the luxury boating adventures of a lifetime. Land comprises 29% of the earth’s surface. We’re focused on the other 71%. Learn more at www.marinemax.com.

Forward-Looking Statement

Certain statements in this press release are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include the Company’s value-creation strategy, the Company’s positioning with respect to market fluctuations and emerging opportunities, the expected annualized cost savings of the Company’s cost-cutting initiatives, anticipated operating efficiency resulting from the formation of the SuperYacht Division, and the Company’s fiscal 2024 guidance. These statements are based on current expectations, forecasts, risks, uncertainties, and assumptions that may cause actual results to differ materially from expectations as of the date of this release. These risks, assumptions, and uncertainties include the Company’s abilities to reduce inventory, manage expenses and accomplish its goals and strategies, the quality of the new product offerings from the Company’s manufacturing partners, the performance and integration of the recently acquired businesses, general economic conditions, as well as those within the Company's industry, the liquidity and strength of our bank group partners, the level of consumer spending, and numerous other factors identified in the Company’s Form 10-K for the fiscal year ended September 30, 2023 and other filings with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

MarineMax, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Amounts in thousands, except share and per share data) (Unaudited)
		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Revenue		$	757,720			$	721,844			$	1,867,886			$	1,800,111
Cost of sales			515,621				478,036				1,259,885				1,168,497
Gross profit			242,099				243,808				608,001				631,614
Selling, general, and administrative expenses			181,072				169,227				506,574				465,128
Income from operations			61,027				74,581				101,427				166,486
Interest expense			18,229				14,798				55,968				37,562
Income before income tax provision			42,798				59,783				45,459				128,924
Income tax provision			11,085				15,455				11,452				34,685
Net income			31,713				44,328				34,007				94,239
Less: Net income (loss) attributable to non-controlling interests			163				(88	)			(60	)			98
Net income attributable to MarineMax, Inc.		$	31,550			$	44,416			$	34,067			$	94,141
Basic net income per common share		$	1.42			$	2.03			$	1.53			$	4.31
Diluted net income per common share		$	1.37			$	1.98			$	1.48			$	4.22
Weighted average number of common shares used in computing net income per common share:
Basic			22,268,758				21,885,400				22,254,619				21,831,350
Diluted			23,049,097				22,427,443				22,952,234				22,321,269

MarineMax, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited)
		June 30,				June 30,
		2024				2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	242,424			$	226,134
Accounts receivable, net			105,258				95,018
Inventories			880,419				739,114
Prepaid expenses and other current assets			33,101				24,881
Total current assets			1,261,202				1,085,147
Property and equipment, net			533,943				521,637
Operating lease right-of-use assets, net			138,600				135,452
Goodwill			589,949				562,277
Other intangible assets, net			38,380				40,968
Other long-term assets			31,591				34,814
Total assets		$	2,593,665			$	2,380,295
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	45,578			$	47,202
Contract liabilities (customer deposits)			66,791				97,785
Accrued expenses			196,987				118,576
Short-term borrowings			701,185				514,023
Current maturities on long-term debt			33,766				32,409
Current operating lease liabilities			10,135				9,967
Total current liabilities			1,054,442				819,962
Long-term debt, net of current maturities			364,138				399,229
Noncurrent operating lease liabilities			125,343				119,759
Deferred tax liabilities, net			59,210				54,449
Other long-term liabilities			13,598				84,539
Total liabilities			1,616,731				1,477,938
SHAREHOLDERS' EQUITY:
Preferred stock			—				—
Common stock			30				29
Additional paid-in capital			342,218				320,383
Accumulated other comprehensive income			2,084				3,245
Retained earnings			774,016				724,808
Treasury stock			(150,797	)			(148,656	)
Total shareholders’ equity attributable to MarineMax, Inc.			967,551				899,809
Non-controlling interests			9,383				2,548
Total shareholders’ equity			976,934				902,357
Total liabilities and shareholders’ equity		$	2,593,665			$	2,380,295

MarineMax, Inc. and Subsidiaries Segment Financial Information (Amounts in thousands) (Unaudited)
		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Revenue:
Retail Operations		$	752,171			$	709,307			$	1,855,433			$	1,770,565
Product Manufacturing			38,062				51,884				124,372				164,959
Elimination of intersegment revenue			(32,513	)			(39,347	)			(111,919	)			(135,413	)
Revenue		$	757,720			$	721,844			$	1,867,886			$	1,800,111
Income from operations:
Retail Operations		$	58,733			$	68,050			$	94,204			$	158,514
Product Manufacturing			(548	)			5,089				2,508				17,834
Intersegment adjustments			2,842				1,442				4,715				(9,862	)
Income from operations		$	61,027			$	74,581			$	101,427			$	166,486

MarineMax, Inc. and Subsidiaries Supplemental Financial Information (Amounts in thousands, except share and per share data) (Unaudited)
		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Net income attributable to MarineMax, Inc.		$	31,550			$	44,416			$	34,067			$	94,141
Transaction and other costs (1)			1,127				111				4,352				6,227
Intangible amortization (2)			1,428				1,925				4,592				5,524
Change in fair value of contingent consideration (3)			1,225				1,211				2,392				3,441
Weather (recoveries) expenses			(556	)			(452	)			142				(644	)
Gain on acquisition of equity investment (4)			—				—				—				(5,129	)
Restructuring expense (5)			1,110				—				1,110				—
Tax adjustments for items noted above (6)			(1,123	)			(724	)			(3,172	)			(2,534	)
Adjusted net income attributable to MarineMax, Inc.		$	34,761			$	46,487			$	43,483			$	101,026
Diluted net income per common share		$	1.37			$	1.98			$	1.48			$	4.22
Transaction and other costs (1)			0.05				—				0.19				0.28
Intangible amortization (2)			0.06				0.09				0.20				0.25
Change in fair value of contingent consideration (3)			0.05				0.05				0.10				0.15
Weather (recoveries) expenses			(0.02	)			(0.02	)			0.01				(0.03	)
Gain on acquisition of equity investment (4)			—				—				—				(0.23	)
Restructuring expense (5)			0.05				—				0.05				—
Tax adjustments for items noted above (6)			(0.05	)			(0.03	)			(0.14	)			(0.11	)
Adjusted diluted net income per common share		$	1.51			$	2.07			$	1.89			$	4.53

(1) Transaction and other costs relate to acquisition transaction, integration, and other costs in the period.

(2) Represents amortization expense for acquisition-related intangible assets.

(3) Represents expenses to record contingent consideration liabilities at fair value.

(4) Represents gain on a previously held equity investment upon acquisition of the entire business.

(5) Represents expenses incurred as a result of restructuring and store closings.

(6) Adjustments for taxes for items are calculated based on the effective tax rate for each respective period presented.

		Three Months Ended								Nine Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
Net income attributable to MarineMax, Inc.		$	31,550			$	44,416			$	34,067			$	94,141
Interest expense (excluding floor plan)			7,508				7,485				22,786				20,669
Income tax provision			11,085				15,455				11,452				34,685
Depreciation and amortization			11,192				9,419				33,087				27,391
Stock-based compensation expense			6,080				5,490				17,483				15,703
Transaction and other costs			1,127				111				4,352				6,227
Gain on acquisition of equity investment			—				—				—				(5,129	)
Change in fair value of contingent consideration			1,225				1,211				2,392				3,441
Restructuring expense			1,110				—				1,110				—
Weather (recoveries) expenses			(556	)			(452	)			142				(644	)
Foreign currency			73				352				(235	)			(2,451	)
Adjusted EBITDA		$	70,394			$	83,487			$	126,636			$	194,033

Non-GAAP Financial Measures

This press release, along with the above Supplemental Financial Information table, contains “Adjusted net income”, “Adjusted diluted EPS”, “Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization” (“Adjusted EBITDA”) and “Adjusted SG&A”, which are non-GAAP financial measures as defined under applicable securities legislation. In determining these measures, the Company excludes certain items which are otherwise included in determining the comparable GAAP financial measures. The Company believes these non-GAAP financial measures are key performance indicators that improve the period-to-period comparability of the Company’s results and provide investors with more insight into, and an additional tool to understand and assess, the performance of the Company's ongoing core business operations. Investors and other readers are encouraged to review the related GAAP financial measures and the above reconciliation and should consider these non-GAAP financial measures as a supplement to, and not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP.

In addition, we have not reconciled our fiscal year 2024 Adjusted earnings and Adjusted EBITDA guidance to net income (the corresponding GAAP measure for each), which is not accessible on a forward-looking basis due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to acquisition contingent consideration, acquisition costs, and other costs. Acquisition contingent consideration and transaction costs, which are likely to be significant to the calculation of net income, are affected by the integration and post-acquisition performance of our acquirees, which is difficult to predict and subject to change. Accordingly, reconciliations of forward-looking Adjusted earnings and Adjusted EBITDA are not available without unreasonable effort.

______________________________

1 This is a non-GAAP measure. See below for an explanation and quantitative reconciliation of each non-GAAP financial measure.

2 This is a non-GAAP measure. Adjusted SG&A represents SG&A adjusted for transaction and other costs, intangible amortization, change in fair value of contingent consideration, weather events, and restructuring expense. See below in the Adjusted diluted EPS table for the excluded amounts for both periods.

3 See “Non-GAAP Financial Measures” below for a discussion of why reconciliations of forward-looking Adjusted net income and Adjusted EBITDA are not available without unreasonable effort.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240725149340/en/

Mike McLamb

Chief Financial Officer

727-531-1700

Scott Solomon

Sharon Merrill Advisors

857-383-2409

HZO@investorrelations.com

Source: MarineMax, Inc.

FAQ

What was MarineMax's (HZO) revenue for Q3 2024?

MarineMax reported revenue of $757.7 million for the third quarter of fiscal 2024, representing a 5% increase year-over-year.

How did MarineMax's (HZO) same-store sales perform in Q3 2024?

MarineMax achieved a 4% increase in comparable same-store sales during the third quarter of fiscal 2024.

What was MarineMax's (HZO) gross margin in the third quarter of 2024?

MarineMax's gross margin for Q3 2024 was 32.0%, down 180 basis points from 33.8% in the same period last year.

Has MarineMax (HZO) updated its fiscal 2024 guidance?

MarineMax reaffirmed its fiscal 2024 guidance, projecting adjusted net income of $2.20 to $3.20 per diluted share and adjusted EBITDA of $155 million to $190 million.

What strategic actions has MarineMax (HZO) taken to improve its business?

MarineMax has formed a new SuperYacht Division (SYD) to generate synergies and initiated strategic cost-cutting actions to better align expenses with the current operating environment and improve operating leverage.