Financial Performance - Total revenues for the three months ended March 31, 2025, were $483.5 million, a decrease of 1.6% compared to $488.3 million for the same period in 2024[19]. - For the six months ended March 31, 2025, total revenue was $859.3 million, compared to $852.3 million for the same period in 2024, indicating an increase of approximately 0.7%[138]. - Net loss attributable to OneWater Marine Inc. for the three months ended March 31, 2025, was $368,000, compared to a net loss of $3.97 million for the same period in 2024[19]. - For the six months ended March 31, 2025, the net loss was $13,987,000 compared to a net loss of $12,479,000 for the same period in 2024, representing an increase in loss of approximately 12.1%[24]. - The company reported a gross profit margin of 22.9% for the three months ended March 31, 2025, compared to 24.6% for the same period in 2024[19]. Cash and Assets - Cash and cash equivalents increased to $67.5 million as of March 31, 2025, from $16.8 million as of September 30, 2024[17]. - Total assets rose to $1.64 billion as of March 31, 2025, compared to $1.59 billion as of September 30, 2024[17]. - Cash and restricted cash at the end of the period was $75,553,000, an increase of $48,216,000 from the beginning of the period[24]. - Total accounts receivable increased to $91.6 million as of March 31, 2025, from $73.3 million as of September 30, 2024, representing a 24.9% increase[67]. - The company experienced a decrease in accounts receivable by $15,540,000 for the six months ended March 31, 2025[24]. Inventory and Financing - Inventory levels increased to $602.4 million as of March 31, 2025, from $590.8 million as of September 30, 2024[17]. - The outstanding balance of the Inventory Financing Facility was $509.0 million as of March 31, 2025, up from $443.4 million as of September 30, 2024[72]. - The Company’s Inventory Financing Facility balance was $309.0 million as of March 31, 2025, with a potential interest expense change of approximately $3.1 million for a 100 basis point interest rate fluctuation[251]. - The A&R Credit Facility had an outstanding balance of $231.4 million as of March 31, 2025, with a potential interest expense change of approximately $2.3 million for a 100 basis point interest rate fluctuation[252]. Expenses and Liabilities - Selling, general and administrative expenses were $87.8 million for the three months ended March 31, 2025, slightly up from $86.5 million in the same period of 2024[19]. - Interest expense related to floor plan financing was $7.5 million for the three months ended March 31, 2025, compared to $8.5 million in the same period of 2024[19]. - The company reported depreciation and amortization of $12,208,000 for the six months ended March 31, 2025, up from $10,470,000 in the prior year[24]. - The company incurred total expenses of $40.8 million under the Tax Receivable Agreement as of March 31, 2025, representing 85% of anticipated net cash savings from tax benefits[119]. Shareholder Equity and Stock - OneWater Marine Inc. reported a total stockholders' equity of $381,615,000 as of March 31, 2025, down from $390,753,000 at the end of 2024[21]. - The company issued 160 shares upon vesting of equity-based awards, resulting in a decrease of $1,824,000 in additional paid-in capital[21]. - The total unrecognized compensation expense related to outstanding equity awards was $7.8 million as of March 31, 2025[87]. - As of March 31, 2025, the company has repurchased and retired 73,487 shares of Class A common stock for approximately $1.9 million, with $48.1 million remaining available for future purchases under the share repurchase program[91]. Operational Insights - The company experienced a decrease in new boat revenues, which totaled $309.5 million for the three months ended March 31, 2025, down from $327.3 million in 2024[19]. - The company anticipates continued challenges in the boat industry due to seasonality and economic conditions affecting consumer demand[12]. - As of March 31, 2025, OneWater Marine Inc. operates 98 retail locations and 9 distribution centers across 19 states[27]. - The company recorded a loss on asset disposals of $200,000 for the six months ended March 31, 2025[24]. Tax and Regulatory Matters - The effective tax rates for the three months ended March 31, 2025, and 2024, were 28.3% and 29.0%, respectively, while for the six months ended March 31, 2025, and 2024, they were 27.9% and 24.8%[113]. - The Company has not recognized any uncertain tax positions or penalties as of March 31, 2025, indicating a stable tax position[118]. Risk Factors - Economic conditions, including rising interest rates and trade policy uncertainties, may negatively impact the Company's operating results[28]. - The company is exposed to foreign currency risk due to purchasing new boats and parts from foreign manufacturers, which may affect competitive pricing in the U.S.[254]. - Fluctuations in foreign currency rates could adversely impact the company's future operating results if not recaptured in customer pricing[254].

Core Insights - OneWater Marine reported revenue of $483.52 million for the quarter ended March 2025, reflecting a year-over-year decline of 1% and an EPS of $0.13, down from $0.67 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $496.25 million, resulting in a surprise of -2.57%, while the EPS surprise was -48.00% compared to the consensus estimate of $0.25 [1] Revenue Breakdown - Service, parts & other revenues reached $69.29 million, exceeding the two-analyst average estimate of $67.30 million, marking a year-over-year increase of +2.4% [4] - Pre-owned boat revenues were $89.73 million, surpassing the average estimate of $79.45 million, and showing a year-over-year growth of +14.1% [4] - New boat revenues totaled $309.50 million, below the average estimate of $329 million, indicating a year-over-year decline of -5.4% [4] - Finance & insurance income was reported at $15 million, slightly below the average estimate of $15.15 million, with a year-over-year increase of +1.9% [4] Stock Performance - Over the past month, OneWater Marine's shares have returned -11.9%, compared to a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

OneWater Marine (ONEW) Q2 2025 Earnings Call May 01, 2025 08:30 AM ET Company Participants Jack Ezzell - CFOAustin Singleton - Founder, CEO & DirectorAnthony Aisquith - President, COO & Director Conference Call Participants Joseph Altobello - MD & Senior AnalystMichael Albanese - Equity Research Analyst - Recreation & Leisure IndustryCraig Kennison - Director of Research Operations & Senior Research Analyst Operator Thank you. I would now like to turn the conference over to Jack Ezel, Chief Financial Office ...

Financial Data and Key Metrics Changes - Fiscal second quarter revenue decreased by 1% to $484 million in 2025 from $488 million in 2024 [14] - New boat sales were down 5% to $310 million, while pre-owned boat sales increased by 14% to $90 million [14] - Gross profit declined to $110 million in 2025 compared to $120 million in 2024, driven by lower gross margins [15] - Net loss for the fiscal second quarter totaled $375,000 or $0.02 per diluted share, compared to a net loss of $5 million or $0.27 per diluted share in the prior year [16] - Adjusted income per diluted share was $0.13 compared to $0.67 in the prior year [17] Business Line Data and Key Metrics Changes - Same store sales declined by 2%, primarily due to a decrease in new boat sales [4] - Revenue from service parts and other sales increased by 2% to $69 million, driven by growth in the dealership segment [14] - Parts and service business revenue was up 2%, partially offset by headwinds in the distribution segment [12] Market Data and Key Metrics Changes - Total unit sales for the industry were down in excess of 10% for the quarter, while the company continued to outperform the industry and gain market share [4] - The average unit price of new boats increased, driven by continued strength in larger boats [11] - Financing and insurance revenue increased slightly as a percentage of total sales, indicating strong performance in in-store financing programs [12] Company Strategy and Development Direction - The company is focused on inventory and brand rationalization strategies, reducing inventory by 12% year over year [5] - The company plans to exit 15 brands to streamline operations and focus on higher-performing brands [46][48] - The company is monitoring the tariff landscape closely and does not expect an immediate impact on pricing for current inventory [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand in April, indicating that results were in line with the prior year [22] - The macroeconomic environment remains uncertain, leading to an updated fiscal 2025 guidance with total sales expected to be in the range of $1.7 billion to $1.8 billion [20] - Management emphasized the importance of controlling factors within their operations to navigate current challenges [9] Other Important Information - Total liquidity as of March 31, 2025, was in excess of $74 million [18] - Total inventory decreased to $602 million from $687 million year over year, indicating a healthier mix and aging profile [18] - The company aims to reduce leverage in the latter half of 2025 as part of its capital allocation strategy [19] Q&A Session Summary Question: What is the demand outlook post-tariff announcements? - Management indicated that April results were in line with the previous year, with positive signs for May [22][23] Question: What drove the margin down on used boats? - Management noted that the model mix and aggressive pricing strategies to move inventory contributed to the softer margins [25][26] Question: Where is the company gaining market share? - The majority of market share gains are in the premium segment, with the company performing better than the industry average [32][33] Question: Is the company discounting heavily to gain share? - Management confirmed that while some discounting is occurring, it is strategic and focused on moving dated inventory [36][37] Question: How does the company see the industry evolving post-slowdown? - Management anticipates potential consolidation in the industry due to higher carrying costs and competitive pressures [41][45]

Company Performance - OneWater Marine reported quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.25 per share, and down from $0.67 per share a year ago, representing an earnings surprise of -48% [1] - The company posted revenues of $483.52 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.57%, and down from $488.32 million year-over-year [2] - Over the last four quarters, OneWater Marine has surpassed consensus EPS estimates only once [2] Stock Outlook - OneWater Marine shares have declined approximately 13.6% since the beginning of the year, compared to a decline of -5.3% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $1.23 on revenues of $559.63 million, and for the current fiscal year, it is $1.21 on revenues of $1.81 billion [7] Industry Context - The Leisure and Recreation Products industry, to which OneWater Marine belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact OneWater Marine's stock performance [5]

Financial Data and Key Metrics Changes - Fiscal second quarter revenue decreased 1% to $484 million in 2025 from $488 million in 2024 [13] - New boat sales were down 5% to $310 million, while pre-owned boat sales increased 14% to $90 million [13] - Gross profit declined to $110 million in 2025 compared to $120 million in 2024 [14] - Net loss for the fiscal second quarter totaled $375,000 or $0.02 per diluted share compared to a net loss of $5 million or $0.27 per diluted share in the prior year [14][15] - Adjusted income per diluted share was $0.13 compared to $0.67 in the prior year [15] Business Line Data and Key Metrics Changes - Same store sales declined 2%, primarily due to a decrease in new boat sales [4][13] - Revenue from service parts and other sales increased 2% to $69 million, driven by growth in the dealership segment [13] - Parts and service business revenue was up 2%, partially offset by headwinds in the distribution segment [11] Market Data and Key Metrics Changes - Total unit sales for the industry were down in excess of 10% for the quarter, while the company continued to outperform the industry and gain market share [4] - The average unit price of new boats increased, driven by continued strength in larger boats [10] Company Strategy and Development Direction - The company is focused on inventory and brand rationalization strategies, reducing inventory by 12% year over year [5] - The company plans to exit 15 brands to streamline operations and focus on higher-performing brands [40][41] - The company is monitoring the tariff landscape and does not expect an impact on pricing for current inventory [7] Management Comments on Operating Environment and Future Outlook - Management noted considerable macroeconomic uncertainty and a challenging environment but expressed optimism about improving performance over time [4] - The company updated its fiscal 2025 guidance, anticipating total sales in the range of $1.7 billion to $1.8 billion, with same store sales expected to be flat to down low single digits [18] - Management emphasized a focus on factors within their control, including rationalizing the brand portfolio and streamlining operations [8] Other Important Information - Total liquidity as of March 31, 2025, was in excess of $74 million [16] - Total inventory decreased to $602 million from $687 million year over year, indicating a healthier mix and aging profile [16] Q&A Session Summary Question: What are you seeing in April from a demand standpoint post the tariff announcements? - Management indicated that April results were in line with the previous year, with positive signs of demand continuing into May [20][21] Question: Can you discuss the margins on used boats? - Management noted that margins were affected by model mix and aggressive pricing strategies to move inventory [22][23] Question: Where are you taking market share? - The company is primarily gaining share in the premium segment, outperforming the industry despite a decline in same store sales [29][30] Question: Are you having to discount heavily to move volume? - Management confirmed that while some discounting is necessary, they are strategically managing margins on current year models [31][32] Question: How do you see the industry shaking out after the slowdown? - Management anticipates potential consolidation in the industry due to higher carrying costs and competitive pressures [36][40]

Revenue and Sales Performance - Fiscal second quarter 2025 revenue was $483.5 million, a decrease of 1.0% from $488.3 million in the same quarter of 2024[4] - Same-store sales decreased by 2% due to lower sales in the West Coast of Florida[3] - New boat revenue decreased by 5.4% to $309.5 million, while pre-owned boat revenue increased by 14.1% to $89.7 million[4] - For fiscal year 2025, the company anticipates revenue between $1.7 billion and $1.8 billion, with dealership same-store sales expected to be flat to down low single digits[9] Profitability and Expenses - Gross profit for the quarter was $110.4 million, down from $120.4 million, resulting in a gross profit margin of 22.8%, a decrease of 180 basis points year-over-year[5] - Selling, general and administrative expenses totaled $87.8 million, representing 18.2% of revenue, up from 17.7% in the prior year[6] - Adjusted EBITDA decreased to $17.9 million from $28.3 million in the prior year quarter[8] - Adjusted net income attributable to OneWater Marine Inc. was $2,031,000 for the three months ended March 31, 2025, compared to $9,831,000 for the same period in 2024[18] - Adjusted EBITDA for the three months ended March 31, 2025, was $17,857,000, while for the same period in 2024, it was $28,295,000[21] Net Loss and Earnings Per Share - The net loss for the quarter was $(0.4) million, or $(0.02) per diluted share, compared to a net loss of $(4.5) million, or $(0.27) per diluted share, in the same quarter of 2024[8] - OneWater Marine Inc. reported a net loss of $368,000 for the three months ended March 31, 2025, compared to a net loss of $3,969,000 for the same period in 2024[18] - The net loss per share of Class A common stock - diluted was $(0.02) for the three months ended March 31, 2025, compared to $(0.27) for the same period in 2024[18] Inventory and Assets - Total inventory decreased by 12.4% to $602.4 million compared to $687.5 million a year earlier[8] - Total assets increased to $1,643.66 million from $1,712.61 million[16] - Total current assets amounted to $833.70 million, compared to $391.30 million previously[16] - Accounts receivable, net stood at $91.63 million, reflecting a slight increase from $91.10 million[16] Liabilities and Equity - Total liabilities were reported at $696.77 million, a decrease from $750.10 million[16] - Current portion of long-term debt, net was $26.70 million, down from $88.64 million[16] - Total current liabilities reached $696.77 million, compared to $750.10 million previously[16] - Total stockholders' equity attributed to One Water Marine Inc. was $381.61 million, a decrease from $397.69 million[16] - Long-term debt, net was reported at $400.48 million, down from $485.41 million[16] - Long-term debt, including the current portion, stood at $427,193,000, with adjusted long-term net debt calculated at $359,732,000 after accounting for cash[21] Operational Highlights - The company operates 98 retail locations and 9 distribution centers across 19 states, positioning itself as one of the largest marine retailers in the U.S.[22] - Same-store sales are used to assess organic growth, excluding new and acquired stores, which is crucial for evaluating the performance of the Dealership segment[29] Transaction and Restructuring Costs - The company incurred transaction costs of $377,000 for the three months ended March 31, 2025, compared to $145,000 for the same period in 2024[21] - Restructuring and impairment costs were $388,000 for the three months ended March 31, 2025, significantly lower than $11,847,000 for the same period in 2024[21]

Core Viewpoint - Wall Street anticipates a year-over-year decline in earnings for OneWater Marine despite higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected on May 1, 2025, with a projected EPS of $0.32, reflecting a 52.2% decrease year-over-year, while revenues are estimated at $498.4 million, a 2.1% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 3.17% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model shows a negative reading of -7.22% for OneWater Marine, suggesting analysts have lowered their expectations, making it challenging to predict an earnings beat [10][11]. Historical Performance - In the last reported quarter, OneWater Marine had a surprise of +42.55%, posting a loss of $0.54 per share against an expected loss of $0.94, but has only beaten consensus EPS estimates once in the last four quarters [12][13]. Market Reaction Factors - An earnings beat or miss may not solely dictate stock movement, as other factors can influence investor sentiment, making it essential to consider additional elements beyond earnings expectations [14][16].

Group 1 - OneWater Marine (ONEW) is a notable stock within the Consumer Discretionary sector, which consists of 268 companies and is currently ranked 11 in the Zacks Sector Rank [2] - OneWater Marine has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, with the consensus estimate for its full-year earnings increasing by 9% in the past quarter [3] - Year-to-date, OneWater Marine has returned approximately 0.9%, outperforming the Consumer Discretionary sector average return of -2.8% [4] Group 2 - OneWater Marine belongs to the Leisure and Recreation Products industry, which includes 23 companies and is currently ranked 176 in the Zacks Industry Rank [5] - The Leisure and Recreation Products industry has seen an average gain of about 3.1% year-to-date, indicating that OneWater Marine is slightly underperforming its industry [5] - Another stock in the Consumer Discretionary sector, PIGEON CORP (PGENY), has significantly outperformed the sector with a year-to-date return of 49.9% [4][6]

Core Viewpoint - OneWater Marine (ONEW) has shown a recent price increase of 5.1% and has a mean price target of $22.80, indicating a potential upside of 27.1% from its current price of $17.94 [1] Price Targets - The average price targets from analysts range from a low of $19 to a high of $25, with a standard deviation of $2.49, suggesting a variability in estimates [2] - The lowest estimate indicates a 5.9% increase, while the highest suggests a 39.4% upside [2] - A low standard deviation indicates a higher agreement among analysts regarding the stock's price movement [7] Analyst Sentiment - Analysts are optimistic about ONEW's earnings prospects, as indicated by upward revisions in earnings estimates, which have shown a strong correlation with stock price movements [9] - Over the last 30 days, two earnings estimates have increased, leading to a Zacks Consensus Estimate rise of 11.2% [10] Zacks Rank - ONEW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a solid potential upside [11] Caution on Price Targets - While price targets can provide insights, relying solely on them for investment decisions may lead to disappointing returns, and they should be approached with skepticism [8][12]