OneWater Marine Inc. Q1 FY2025 earnings call

• First quarter results were better than expected with low double-digit new unit sales growth outpacing the industry.
• Revenue increased 3%, same-store sales up 4% driven by sales team efforts.
• Margins declined due to deliberate sales push and discounts on exiting brands.
• Inventory decreased 10% year-over-year, helping reduce carrying costs.
• Selling, general and administrative expenses decreased both in dollar terms and as a percentage of revenue.
• Hurricane Helene and Milton impacted Florida stores, with sales in the affected area down mid-single digits.
• Boat show season had mixed results due to weather, but the premium category performed well.
• Ongoing inventory management efforts led to lower floor plan interest expenses.
• Finance and Insurance revenue grew 50 basis points as a percentage of total revenue, showcasing the benefits of the diverse business model.

Revenue for the fiscal first quarter of 2025 was $376 million, a 3% increase from the prior year. New boat sales contributed $248 million (3% increase year-over-year), pre-owned boat sales totaled $57 million (7% increase), service parts and other sales decreased to $62 million (1% decrease), and Finance and Insurance revenue grew to $9 million (28% increase). New boat sales accounted for approximately 66% of total revenue, pre-owned around 15%, service parts and other around 16%, and F&I around 2%.

• Maintained fiscal 2025 guidance: total sales expected in the range of $1.7 billion to $1.85 billion.
• Same-store sales projected to increase in the low single digits.
• Adjusted EBITDA anticipated to be between $80 million and $110 million.
• Adjusted earnings per diluted share expected to be between $1 and $2.

• Industry uncertainty persists following a challenging 2024.
• Hurricanes and weather events can impact regional sales.
• Inventory management challenges, including discounting to clear aged inventory.
• Potential tariff impacts from original equipment manufacturers (OEMs) and their effect on demand and margins.

Q: Fred Wightman asked about the quarter's cadence and comps excluding Florida.

A: Austin Singleton and Anthony Aisquith discussed October and November being strong, December flat, with Florida locations impacted by storms in October.

Q: Joe Altobello's question about comp breakdown by units and ASPs.

A: Jack Ezzell stated units were up double-digits in the low to mid-teen range.

Q: Mike Swartz asked about inventory targets and aged inventory.

A: Jack Ezzell mentioned targeting inventory down over 10% by September 2025, with aged inventory cleaning up positively.

Q: Noah Zatzkin's question about industry green shoots.

A: Austin Singleton discussed inventory cleaning up leading to higher margins and industry discipline from manufacturers.

Q: Alice Wycklendt asked about first-time vs trade-in buyers and F&I penetration.

A: Jack Ezzell and Anthony Aisquith talked about trades increasing due to manufacturer innovation and F&I penetration driven by team efforts.

Q: Bryan Griffin asked about promotions and tariffs.

A: Austin Singleton and Anthony Aisquith mentioned promotions on par with recent years and OEMs taking a wait-and-see approach on tariffs.