OneWater Marine Inc. Q4 FY2025 earnings call

• Industry conditions were challenging with retail demand normalizing, promotional activity up, and hurricanes disrupting Florida markets.
• Delivered 6% same-store sales growth for the year, outperforming the broader industry in key categories.
• New boat sales strong in Q4, pre-owned sales standout throughout the year.
• Took cost actions and leveraged flexible operating model to align expenses with demand and protect margins.
• Exited 2025 with cleanest inventory levels in years, providing competitive advantage.
• Completed strategic exit from discontinued brands, sharpening focus on core portfolio.
• Early boat show feedback positive, with strong customer interest and innovations. Fort Lauderdale Boat Show sales up year over year, and seeing improvements in new boat gross margins.

Fiscal fourth quarter 2025 revenue increased 22% to $460 million compared to $378 million in the prior year. New boat sales were up 27% to $275 million, pre-owned sales increased 25% to $91 million, and store sales were up 23%. Revenue from service parts and other sales for the quarter increased 7% to $81 million. For full year 2025, total revenue increased 6% to $1.9 billion. Same-store sales increased 6%. Service parts and other revenue was $295 million (+2%). Gross profit increased to $104 million in 2025 compared to $91 million in the prior year.

• Outlook for 2026 is cautiously optimistic with sales expected to be in the range of $1.83 billion to $1.93 billion.
• Adjusted EBITDA expected to be in the range of $65 million to $85 million and adjusted diluted earnings per share in the range of $0.25 to $0.75.
• Expect same-store sales to be flat for the year, offsetting headwinds from exited brands with growth from continuing brands.
• Tailwinds include improved industry inventory levels, reduced discounting, and lower interest rates, but tempered by market uncertainty.
• Focus on maintaining clean inventory position and disciplined cost management.

• Industry conditions remain challenging with retail demand normalizing from pandemic highs, promotional activity increased, and hurricanes disrupting key markets.
• Inventory management risks, including timing of model year boat builds affecting inventory levels.
• Interest rate changes and their impact on customer affordability and unit economics.
• Market uncertainty tempering positive tailwinds like lower interest rates.

Q: Could you share the year-over-year change in inventory in dollars?

A: We're down roughly 8.5%, $50 million year over year.

Q: What's the assumption for inventory for fiscal 2026?

A: Expect it to be up modestly with price increases, and the flat retail is offset by headwinds from exiting brands.

Q: Have you started to see consumer rates come down in a meaningful way yet?

A: Rates have come down, moving with rate cuts, starting to see impact with a good October and Fort Lauderdale boat show.

Q: Could you quantify sales increase at the Fort Lauderdale Boat Show?

A: Almost up 20% for the show, with margin pressure starting to go away.

Q: Have you continued to see an increase in trade-in dynamic on the pre-owned side?

A: Momentum has continued, with more trades than pre-COVID as consumers are running boats through dealerships instead of selling on their own.

Q: Update on M&A side?

A: Staying extremely disciplined, focused on debt, and methodical with M&A given time is on their side