Malibu Boats Inc MBUU reported a first-quarter FY24 sales decline of 15.3% year-on-year to $255.83 million, beating the analyst consensus estimate of $244.13 million.
The decrease in net sales was driven primarily by decreased unit volumes across all segments resulting primarily from decreased retail demand and increased dealer flooring program costs across all segments resulting from higher interest rates and increased inventory levels.
Unit volume dropped 24.1% to 1,698 units. Gross profit decreased 23.9% year-on-year to $56.8 million, with the margin contracting 250 basis points year-on-year to 22.2%.
The operating income for the quarter fell 40.9% to $28.6 million, and the operating margin compressed 480 basis points to 11.2%.
The company held $45.5 million in cash and equivalents as of September 30, 2023.
Adjusted EBITDA decreased 31.7% year-on-year to $39 million with an adjusted EBITDA margin of 15.2%.
Adjusted EPS of $1.13 beat the consensus estimate of $0.88.
“As we moved through the quarter, the retail environment markedly deteriorated with the sense of urgency that customers had over the last few years largely gone, coupled with a challenged interest rate and macroeconomic landscape,” said CEO Jack Springer.
Outlook: Malibu sees FY24 sales decline percentage in the high teens to low twenties (prior view: net sales decline percentage in the mid-to-high teens) and Adjusted EBITDA margin down 350 basis points to 450 basis points (prior view: down 300-400 basis points).
Price Action: MBUU shares traded lower by 4.37% at $43.15 on the last check Tuesday.
**Recreational Boats Maker Malibu Boats Hit By Low Demand And High Interest Rates; Here’s Details On Q1 Performance**
Malibu Boats Inc (NASDAQ: MBUU) recently reported its first-quarter FY24 performance, showing a sales decline of 15.3% year-on-year to $255.83 million. This exceeded the analyst consensus estimate of $244.13 million. The company experienced decreased unit volumes across all segments due to reduced retail demand and increased dealer flooring program costs. These costs were influenced by higher interest rates and increased inventory levels.
During Q1, Malibu Boats sold 1,698 units, representing a 24.1% decrease from the previous year. Gross profit also saw a decline, amounting to $56.8 million, a 23.9% decrease year-on-year. Gross margin contracted by 250 basis points, settling at 22.2%. Furthermore, operating income dropped by 40.9% to $28.6 million, resulting in an operating margin compression of 480 basis points to 11.2%.
As of September 30, 2023, Malibu Boats held $45.5 million in cash and equivalents. Adjusted EBITDA declined by 31.7% year-on-year to $39 million, indicating an adjusted EBITDA margin of 15.2%. The company’s adjusted EPS of $1.13 surpassed the consensus estimate of $0.88.
CEO Jack Springer commented on the challenging retail environment during the quarter, stating that the sense of urgency from customers in previous years had significantly diminished. This, along with the impact of high interest rates and macroeconomic conditions, contributed to the deterioration in the retail landscape.
Looking ahead, Malibu Boats anticipates a sales decline in the high teens to low twenties for FY24, revising its prior forecast of a net sales decline in the mid-to-high teens. The company also projects a 350 to 450 basis points drop in the Adjusted EBITDA margin, compared to its previous forecast of a 300 to 400 basis points decline.
In terms of stock performance, MBUU shares traded lower by 4.37% at $43.15 as of the latest check on Tuesday.
**Key Highlights:**
1. Malibu Boats reported a first-quarter FY24 sales decline of 15.3% year-on-year, surpassing analyst expectations.
2. Decreased unit volumes and increased dealer flooring program costs were the primary factors behind the decline in net sales.
3. Gross profit and operating income also experienced significant decreases during the quarter.
4. Malibu Boats holds $45.5 million in cash and equivalents as of September 30, 2023.
5. The company anticipates a sales decline in the high teens to low twenties for FY24, with a corresponding decline in Adjusted EBITDA margin.
Sources:
– [Benzinga](https://www.benzinga.com/)
– [Malibu Boats Investor Relations](https://investors.malibuboats.com/)
