MarineMax share price slumps on bleak outlook, lower 1Q earnings

MarineMax found itself in rough seas following the first quarter results announcement wherein the company posted earnings per share of $0.07 against $1.35 in the same period last year owing to lower gross margins and higher marketing expenses.

Earnings were below market expectations sending the company’s shares (HZO) down 16.52% during the early trading hours of Thursday. The share prices hit a 52-week low of $22.51 earlier in the session.

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

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Further breakdown of the first quarter income statement showed the company’s topline slightly improved by 2% year-over-year to $582.9m driven by an increase in boat sales.

However, higher cost of sales narrowed gross profit by 0.2% to $190.4m. As a percentage of revenue, gross margin during the quarter clocked in at 32.7% from 35.2% in the comparable period last year.

The company said that margins shrank on the back of higher promotional activity amid challenging retail conditions.

READ: MarineMax results underwhelm as margins shrink

Net income in the second quarter was $1.6m compared with net income of $30m in the same period last year.

Owing to tough operating conditions, the company also revised its 2024 adjusted net income guidance to a range of $2.20 to $3.20 per diluted share from $3.20 to $3.70 per diluted share in the first quarter.

However, it warned that these expectations do not consider material acquisitions that may be completed during 2024.