Q1 2026 MarineMax Inc Earnings Call

January 29, 2026

Operator: Good day, and welcome to MarineMax Incorporated Fiscal 2026 First Quarter Conference Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. I would now like to turn the call over to Scott Solomon of the company's investor relations firm, Sharon Merrill Advisors. Please go ahead, sir.

Speaker #1: Good day and welcome to MarineMax Incorporated Fiscal 2026 first quarter conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode.

Speaker #1: A question and answer session will follow the formal presentation. I would now like to turn the call over to Scott Solomon, of the company's investor relation firm, General Merrill Advisors.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you, Operator, and good morning, everyone. Hosting today's call are Brett McGill, MarineMax's Chief Executive Officer, and President, and Mike McLamb, the company's Chief Financial Officer.

Scott Solomon: Thank you, operator, and good morning, everyone. Hosting today's call are Brett McGill, MarineMax's Chief Executive Officer and President, and Mike McLamb, the company's Chief Financial Officer. Brett will begin the call by discussing MarineMax's operating performance and recent highlights. Mike will review the financial results in the company's fiscal 2026 financial guidance. Brett will make some concluding comments, and then management will be happy to take your questions. The earnings release and supplemental presentation associated with today's announcement can be found at investor.marinemax.com. And with that, I'll turn the call over to Mike. Mike?

Q1 2026 MarineMax Inc Earnings Call

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Q1 2026 MarineMax Inc Earnings Call

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Thursday, January 29th, 2026 at 3:00 PM

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Speaker #2: MarineMax's operating performance and recent results—Brett will begin the call by discussing financial results and the company's fiscal highlights. Mike will review the 2026 financial guidance.

Speaker #2: Brett will make some concluding comments, and then management will be happy to take your questions. The earnings release and supplemental presentation associated with today's announcement can be found at investor.marinemax.com.

Speaker #2: And with that, I'll turn the call over

Speaker #2: Mike.

Speaker #3: Thank you, Scott. Good morning, call. I'd like to start by everyone, and thank you for joining this reminding you that certain of our comments are forward-looking statements as defined by the private securities litigation reform act of 1995.

Mike McLamb: ... Thank you, Scott. Good morning, everyone, and thank you for joining this call. I'd like to start by reminding you that certain of our comments are forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of today. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks include, but are not limited to, the impact of seasonality and weather, global economic conditions, and the level of consumer spending, the company's ability to capitalize on opportunities or grow its market share, and numerous other factors identified in the company's most recently filed 10-K and 10-Q, and other filings with the Securities and Exchange Commission. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Speaker #3: statements speak only as of Any forward-looking today. These statements involve cause actual results to differ risks and uncertainties that could materially from expectations. These risks include, but are not limited and weather, global economic to, the impact of seasonality conditions, and the level of consumer spending, the company's ability to capitalize on opportunities or grow its market share and numerous other factors identified in the company's most recently filed 10-K and 10-Q and other filings with the Securities and Exchange Commission.

Speaker #3: The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Speaker #3: On today's call, we will make comments referring to non-GAAP financial measures. We believe that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results.

Mike McLamb: On today's call, we will make comments referring to Non-GAAP financial measures. We believe that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. These measures can also help investors who wish to make comparisons between MarineMax and other companies on both a GAAP and a Non-GAAP basis. The reconciliation of Non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release. With that, let me turn the call over to Brett. Brett?

On today's call, we will make comments referring to Non-GAAP financial measures. We believe that the inclusion of these financial measures helps investors gain a meaningful understanding of the changes in the company's core operating results. These measures can also help investors who wish to make comparisons between MarineMax and other companies on both a GAAP and a Non-GAAP basis. The reconciliation of Non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release. With that, let me turn the call over to Brett. Brett?

Speaker #3: help investors who wish to make These measures can also comparisons between MarineMax and other companies on both a GAAP and a non-GAAP basis. The reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in today's earnings release.

Speaker #3: that, let me turn the call over to Brett. With Brett, thank you, Mike. Good morning, everyone, and thank you for joining us today to discuss our fiscal first quarter 2026 performance.

Brett McGill: Thank you, Mike. Good morning, everyone, and thank you for joining us today to discuss our fiscal Q1 2026 performance. I'd like to begin by acknowledging the work of our teams across our stores, marinas, manufacturing, and super yacht service organization. Market conditions remained challenging throughout the quarter, with elevated promotional activity and cautious retail behavior continuing to influence demand patterns. Even in this environment, our teams maintained a strong focus on the customer experience while working to keep inventory aligned with current demand levels. Their efforts, which are reflected in our strong net promoter scores, contributed to the results we delivered and will help to ensure operational improvement as we move into the upcoming season. Revenue for the December quarter increased year-over-year, with strong same-store sales driving the growth.

Speaker #3: I'd like to begin by acknowledging the work of our teams across our stores, marinas, manufacturing, and superyacht service organizations. Market conditions remained challenging throughout the quarter, with elevated promotional activity and cautious retail behavior continuing to influence demand patterns.

Speaker #3: our teams maintained a strong focus Even in this environment, on the customer experience, while working to keep inventory aligned with current demand levels. Their efforts, which are reflected in our strong net promoter scores, contributed to the results we delivered and will help to ensure operational improvement as we move into the upcoming season.

Speaker #3: Revenue for the December quarter increased year over year with strong same-store sales driving the growth. Granted, as we previously noted, we were up against an easier revenue comparison this quarter due to the hurricane last year.

Brett McGill: Granted, as we previously noted, we were up against an easier revenue comparison this quarter due to the hurricanes last year. Retail boat margin pressure increased across the recreational boating industry with the onset of winter. Competitive intensity remained high, and overall consumer sentiment continued to be affected by broader uncertainty. These dynamics reflected what we expected as the industry continues progressing toward normalized inventory levels. Against this backdrop, margins on new and used boats remained well below historical levels. However, our same-store sales performance was supported by our premium brand offerings and the migration to larger products as well. Our long track record of sustaining gross margins above 30%, even in one of the more challenging, lower-margin periods for boat sales, underscores the strength of our strategy to expand into higher-margin, more stable businesses.

Granted, as we previously noted, we were up against an easier revenue comparison this quarter due to the hurricanes last year. Retail boat margin pressure increased across the recreational boating industry with the onset of winter. Competitive intensity remained high, and overall consumer sentiment continued to be affected by broader uncertainty. These dynamics reflected what we expected as the industry continues progressing toward normalized inventory levels. Against this backdrop, margins on new and used boats remained well below historical levels. However, our same-store sales performance was supported by our premium brand offerings and the migration to larger products as well. Our long track record of sustaining gross margins above 30%, even in one of the more challenging, lower-margin periods for boat sales, underscores the strength of our strategy to expand into higher-margin, more stable businesses.

Speaker #3: Retail boat margin pressure increased across the recreational boating industry, with the onset of winter. Competitive intensity remained high, and overall consumer sentiment continued to be affected by broader uncertainty.

Speaker #3: These expected as the industry continues dynamics reflected what we progressing toward normalized inventory levels. Against this backdrop, margins on new and used boats remained well below historical levels.

Speaker #3: However, our same-store sales performance was supported by our premium brand offerings and the migration to larger products as well. Our long track record of sustaining gross margins above 30%, even in one of the more challenging lower margin periods for boat sales, underscores the strength of our strategy to expand into higher margin more stable businesses.

Brett McGill: By steadily acquiring complementary, less cyclical, higher-margin operations, we've built a broader and more durable model. As these businesses continue to grow, together with improvements in our core operations, including marinas, storage, service, and finance and insurance, they are elevating our performance and will enhance our cash flows as the retail boating industry begins to recover. Even with industry challenges in what is seasonally our smallest quarter of the year, we were able to deliver on our goal of reducing inventory levels by nearly $170 million compared with last year. Also, looking ahead, we expect the industry's inventory environment to continue progressing toward more normalized levels as we move into the second half of the fiscal year.

By steadily acquiring complementary, less cyclical, higher-margin operations, we've built a broader and more durable model. As these businesses continue to grow, together with improvements in our core operations, including marinas, storage, service, and finance and insurance, they are elevating our performance and will enhance our cash flows as the retail boating industry begins to recover. Even with industry challenges in what is seasonally our smallest quarter of the year, we were able to deliver on our goal of reducing inventory levels by nearly $170 million compared with last year. Also, looking ahead, we expect the industry's inventory environment to continue progressing toward more normalized levels as we move into the second half of the fiscal year.

Speaker #3: complementary, less cyclical, higher By steadily acquiring margin operations, we've built a broader and more durable model. As these businesses continue to grow, together with improvements in our core operations, including marinas, storage, service, and finance and insurance, they are elevating our performance and will enhance our cash flows as the retail boating industry begins to recover.

Speaker #3: challenges, in what is Even with industry seasonally our smallest quarter of the year, we were able to deliver on our goal of reducing inventory levels by nearly 170 million compared with last year.

Speaker #3: Also, looking ahead, we expect the industry's inventory environment to continue progressing toward more normalized levels as we move into the second half of the fiscal year.

Speaker #3: Although the timing and extent of improvement will depend on broader macroeconomic and industry factors, a return to more typical inventory levels should over time.

Brett McGill: Although the timing and extent of improvement will depend on broader macroeconomic and industry factors, a return to more typical inventory levels should help ease pressure on retail margins over time. Our presence at the premium end of the market continues to be a point of differentiation, reflecting the strength of our brands and product portfolio. At the same time, we remain appropriately cautious for our outlook, given the broader retail and macroeconomic environment. We continue to prioritize maintaining an appropriate inventory position, delivering a reliable and high-quality customer experience, and managing the business with discipline and long-term perspective. As we look at broader demand signals, the Fort Lauderdale International Boat Show effectively served as the kickoff to this year's selling season, providing an early read on customer engagement across key segments. Subsequently, winter shows in Boston, Atlanta, New York, Milwaukee, St. Petersburg.

Although the timing and extent of improvement will depend on broader macroeconomic and industry factors, a return to more typical inventory levels should help ease pressure on retail margins over time. Our presence at the premium end of the market continues to be a point of differentiation, reflecting the strength of our brands and product portfolio. At the same time, we remain appropriately cautious for our outlook, given the broader retail and macroeconomic environment. We continue to prioritize maintaining an appropriate inventory position, delivering a reliable and high-quality customer experience, and managing the business with discipline and long-term perspective. As we look at broader demand signals, the Fort Lauderdale International Boat Show effectively served as the kickoff to this year's selling season, providing an early read on customer engagement across key segments. Subsequently, winter shows in Boston, Atlanta, New York, Milwaukee, St. Petersburg.

Speaker #3: Our presence at the premium end of the market continues to be a point of differentiation. Reflecting the strength of our brands and product portfolio, at the same time, we remain appropriately cautious for our outlook given the broader retail and macroeconomic environment.

Speaker #3: We continue to prioritize maintaining an appropriate inventory position, delivering a reliable and high-quality customer experience, and managing the business with discipline and long-term perspective.

Speaker #3: As we look at broader demand signals, the Fort Lauderdale International Boat Show effectively served as the kickoff to this year's selling season, providing an early read on customer engagement across key segments.

Speaker #3: Subsequently, winter shows in Boston and Atlanta, New York, Milwaukee, St. Petersburg, and Minneapolis, among others, offered additional touchpoints that collectively helped us gauge early-season positive sentiment across a variety of markets.

Brett McGill: Petersburg, and Minneapolis, among others, offered additional touch points that collectively helped us gauge early season positive sentiment across a variety of markets. While it is still early, the consistency of interest across these events has us increasingly optimistic as we prepare for the core spring selling season. Looking ahead, the Miami and Palm Beach shows in February and March will be important indicators of in-season demand at the premium end of the market and will further inform our outlook as seasonal retail activity accelerates. While recent demand has been positive, our outlook for fiscal 2026 remains balanced, given the ongoing uncertainty regarding the broader consumer and macroeconomic environment. Against this backdrop, we continue to prioritize maintaining appropriate inventory levels, delivering a consistent and high-quality customer experience, and managing the business with discipline and long-term perspective.

Petersburg, and Minneapolis, among others, offered additional touch points that collectively helped us gauge early season positive sentiment across a variety of markets. While it is still early, the consistency of interest across these events has us increasingly optimistic as we prepare for the core spring selling season. Looking ahead, the Miami and Palm Beach shows in February and March will be important indicators of in-season demand at the premium end of the market and will further inform our outlook as seasonal retail activity accelerates. While recent demand has been positive, our outlook for fiscal 2026 remains balanced, given the ongoing uncertainty regarding the broader consumer and macroeconomic environment. Against this backdrop, we continue to prioritize maintaining appropriate inventory levels, delivering a consistent and high-quality customer experience, and managing the business with discipline and long-term perspective.

Speaker #3: While it is still early, the consistency of interest across these events has us increasingly optimistic as we prepare for the core spring selling season.

Speaker #3: Looking ahead, the Miami and Palm Beach shows and February and March will be important indicators of in-season demand at the premium end of the market and will further inform our outlook as seasonal retail activity accelerates.

Speaker #3: While recent demand has been positive, our outlook for fiscal 2026 remains balanced given the ongoing uncertainty regarding the broader consumer and macroeconomic environment. Against this backdrop, we continue to prioritize maintaining appropriate inventory levels, delivering a consistent and high-quality customer experience, and managing the business with discipline and a long-term perspective.

Speaker #3: The execution of these priorities combined with our scale and operational capabilities positions us well to navigate the near-term uncertainty and support long-term value creation for our shareholders.

Brett McGill: The execution of these priorities, combined with our scale and operational capabilities, positions us well to navigate the near-term uncertainty and support long-term value creation for our shareholders. So now let me turn the call over to Mike for our financial review. Mike?

The execution of these priorities, combined with our scale and operational capabilities, positions us well to navigate the near-term uncertainty and support long-term value creation for our shareholders. So now let me turn the call over to Mike for our financial review. Mike?

Speaker #3: So now let me turn the call over to Mike for our financial review.

Speaker #3: Mike? Thank

Speaker #2: Thank you, Brett. To amplify Brett's comments: a customer-first culture is essential, regardless of where we are in the cycle. And our team has done an outstanding job in that regard.

Mike McLamb: Thank you, Brett. To amplify Brett's comments, a customer-first culture is essential, regardless of where we are in the cycle, and our team has done an outstanding job in that regard. Through previous cycles, repeat customers, created through our outstanding customer experience, have played a prominent part in propelling us forward. Looking at our Q1 results, achieving nearly 11% same-store sales growth was encouraging. Our revenue of $505 million supported our efforts to reduce inventory and contributed to an even stronger, more liquid balance sheet. We also benefited from our location optimization strategy, which resulted in a more efficient footprint compared with last year. You can see from reported industry data that boat sales were challenged throughout the quarter, particularly in the fiberglass segments, which are most important to us. Accordingly, our unit volume declined by low to mid-single digits.

Speaker #2: Through previous cycles, repeat customers, created through our outstanding customer experience, have played a prominent part in propelling us forward. Looking at our first quarter results, achieving nearly 11% same-store sales growth was encouraging.

Speaker #2: Our revenue of $505 million supported our efforts to reduce inventory and contributed to an even stronger and more liquid balance sheet. We also benefited from our location optimization strategy which resulted in a more efficient footprint compared with last year.

Speaker #2: You can see from reported industry data that boat sales were challenged throughout the quarter, particularly in the fiberglass segments, which are most important to us.

Speaker #2: Accordingly, our unit volume declined by low to mid-single digits. This implies a significant increase in average unit price driven primarily by mix and aided in part by the strength of the Fort Lauderdale Boat Show, which skews toward larger products.

Mike McLamb: This implies a significant increase in average unit price, driven primarily by mix and aided in part by the strength of the Fort Lauderdale Boat Show, which skews toward larger products. Historically, in past recoveries, the larger product has tended to lead the way. Not surprisingly, gross profit of $160 million was down from the prior year due to anticipated margin pressure in the winter months from the industry's inventory overhang and its impact on less capitalized dealers. Gross margins today are more than 400 basis points below what would be considered a normal historical margin in most periods. That said, our higher-margin businesses, like our marinas, finance and insurance, and superyacht services, contributed favorably to consolidated gross profit, demonstrating the benefits of our diversified portfolio. Selling, general, and administrative expenses increased to over $155 million.

This implies a significant increase in average unit price, driven primarily by mix and aided in part by the strength of the Fort Lauderdale Boat Show, which skews toward larger products. Historically, in past recoveries, the larger product has tended to lead the way. Not surprisingly, gross profit of $160 million was down from the prior year due to anticipated margin pressure in the winter months from the industry's inventory overhang and its impact on less capitalized dealers. Gross margins today are more than 400 basis points below what would be considered a normal historical margin in most periods. That said, our higher-margin businesses, like our marinas, finance and insurance, and superyacht services, contributed favorably to consolidated gross profit, demonstrating the benefits of our diversified portfolio. Selling, general, and administrative expenses increased to over $155 million.

Speaker #2: Historically, in past recoveries, the larger product has tended to lead the way. Not surprisingly, gross profit of $160 million was down from the prior year, due to anticipated margin pressure in the winter months from the industry's inventory overhang and its impact on less-capitalized dealers.

Speaker #2: Gross margins today are more than 400 basis points below what would be considered a normal, historical margin in most periods. That said, our higher margin businesses like our marinas, finance and insurance, and superyacht services contributed favorably to consolidated gross profit, demonstrating the benefits of our diversified portfolio.

Speaker #2: Selling general and administrative expenses increased to over $155 million. But when adjusting for transaction costs, changes in contingent consideration, which was a gain of over $25 million last year, weather events and other items in both periods SG&A was about $1.7 million higher year over year but it was down 200 basis points as a percentage of revenue.

Mike McLamb: But when adjusting for transaction costs, changes in contingent consideration, which was a gain of over $25 million last year, weather events, and other items in both periods, SG&A was about $1.7 million higher year over year, but it was down 200 basis points as a percentage of revenue. Interest expense also declined due to decreased borrowings from lower inventory and lower rates. Interest expense should continue to be a tailwind for us in fiscal 2026 compared with last year. Our reported net loss per share was $0.36 per share or $0.21 per share on an adjusted basis. Adjusted EBITDA was $15.5 million. Our balance sheet remained strong, with nearly $165 million in cash.

But when adjusting for transaction costs, changes in contingent consideration, which was a gain of over $25 million last year, weather events, and other items in both periods, SG&A was about $1.7 million higher year over year, but it was down 200 basis points as a percentage of revenue. Interest expense also declined due to decreased borrowings from lower inventory and lower rates. Interest expense should continue to be a tailwind for us in fiscal 2026 compared with last year. Our reported net loss per share was $0.36 per share or $0.21 per share on an adjusted basis. Adjusted EBITDA was $15.5 million. Our balance sheet remained strong, with nearly $165 million in cash.

Speaker #2: Interest expense also declined due to decreased borrowings from lower inventory and lower rates. Interest expense should continue to be a tailwind for us in fiscal 2026 compared with last year.

Speaker #2: A reported net loss per share was $36 cents per share or 21 cents per share on an adjusted basis. Adjusted EBITDA was $15.5 million.

Speaker #2: Our balance sheet remained strong with nearly $165 million in cash, while fiscal 2025 and Q1 of 2026 were challenging periods for the industry, we still generated significant cash flow that allowed us to repurchase approximately 6% of our shares and acquire the high-quality shelter bay marina and retail business in the Keys, and continue investing across the company to support long-term growth and operational excellence.

Mike McLamb: While fiscal 2025 and Q1 of 2026 were challenging periods for the industry, we still generated significant cash flow that allowed us to repurchase approximately 6% of our shares, acquire the high-quality Shelter Bay Marina and retail business in the Keys, and continue investing across the company to support long-term growth and operational excellence. These investments included the opening of IGY Savannah, the expansion of our Stuart Marina, the rollout of our enhanced Fort Myers operation, and several other strategic initiatives. Interestingly, as we start the March quarter, our customer deposits are flat year over year, an encouraging sign given the environment we just navigated. Through our disciplined approach, we improved both our current ratio and total liabilities to tangible net worth ratio. At the same time, we maintained a healthy net debt to adjusted EBITDA ratio of just over 2x at quarter end.

While fiscal 2025 and Q1 of 2026 were challenging periods for the industry, we still generated significant cash flow that allowed us to repurchase approximately 6% of our shares, acquire the high-quality Shelter Bay Marina and retail business in the Keys, and continue investing across the company to support long-term growth and operational excellence. These investments included the opening of IGY Savannah, the expansion of our Stuart Marina, the rollout of our enhanced Fort Myers operation, and several other strategic initiatives. Interestingly, as we start the March quarter, our customer deposits are flat year over year, an encouraging sign given the environment we just navigated. Through our disciplined approach, we improved both our current ratio and total liabilities to tangible net worth ratio. At the same time, we maintained a healthy net debt to adjusted EBITDA ratio of just over 2x at quarter end.

Speaker #2: These investments included the opening of IGY Savannah, the expansion of our steward marina, the rollout of our enhanced Fort Myers operation, and several other strategic initiatives.

Speaker #2: Interestingly, as we start the March quarter, our customer deposits are flat year over year, and encouraging signs given the environment we just navigated. Through our disciplined approach, we improved both our current ratio and total liabilities to tangible net worth ratio.

Speaker #2: At the same time, we maintained a healthy net debt-to-adjusted EBITDA ratio of just over two times at quarter end. Based on current business conditions, recent industry registration data, retail trends, and other relevant factors, we are reaffirming our guidance for fiscal 2026.

Mike McLamb: Based on current business conditions, recent industry registration data, retail trends, and other relevant factors, we are reaffirming our guidance for fiscal 2026. We continue to expect fiscal 2026 Adjusted EBITDA to be in the range of $110 to 125 million, with adjusted net income in the range of $0.40 to $0.95 per diluted share. As I noted on our last earnings call, this guidance assumes industry units for our fiscal year will be down slightly to up slightly, depending on the various factors that have affected consumer demand. Same-store sales are expected to finish fiscal 2026 flat to slightly positive, depending on mix. We anticipate retail margin pressure to persist across the industry through the end of our fiscal Q2, which aligns with the typically slower winter period.

Based on current business conditions, recent industry registration data, retail trends, and other relevant factors, we are reaffirming our guidance for fiscal 2026. We continue to expect fiscal 2026 Adjusted EBITDA to be in the range of $110 to 125 million, with adjusted net income in the range of $0.40 to $0.95 per diluted share. As I noted on our last earnings call, this guidance assumes industry units for our fiscal year will be down slightly to up slightly, depending on the various factors that have affected consumer demand. Same-store sales are expected to finish fiscal 2026 flat to slightly positive, depending on mix. We anticipate retail margin pressure to persist across the industry through the end of our fiscal Q2, which aligns with the typically slower winter period.

Speaker #2: We continue to expect fiscal 2026 adjusted EBITDA to be in the range of $110 million to $125 million, with adjusted net income in the range of $0.40 to $0.95 per diluted share.

Speaker #2: As I noted on our last earnings call, this guidance assumes industry units for our fiscal year will be down slightly to up slightly depending on the various factors that have affected consumer demand.

Speaker #2: Same-store sales are expected to finish fiscal 2026 flat to slightly positive, depending on mix. We anticipate retail margin pressure to persist across the industry through the end of our fiscal second quarter.

Speaker #2: Which aligns with the typically slower winter period. We also expect inventory levels in the industry to show more meaningful improvement in the second half of the fiscal year compared with the same period in fiscal 2025.

Mike McLamb: We also expect inventory levels in the industry to show more meaningful improvement in the second half of the fiscal year compared with the same period in fiscal 2025.... supported by the continued growth of our higher-margin businesses, we believe we can maintain consolidated gross margins in the low 30% range for the year. Our outlook reflects the interest rate cuts announced to date and assumes an annual effective tax rate of 26.5% and a share count of approximately 22.8 million shares. These projections do not incorporate the potential effects of significant acquisitions or other unforeseen developments, including shifts in global economic conditions.

We also expect inventory levels in the industry to show more meaningful improvement in the second half of the fiscal year compared with the same period in fiscal 2025.... supported by the continued growth of our higher-margin businesses, we believe we can maintain consolidated gross margins in the low 30% range for the year. Our outlook reflects the interest rate cuts announced to date and assumes an annual effective tax rate of 26.5% and a share count of approximately 22.8 million shares. These projections do not incorporate the potential effects of significant acquisitions or other unforeseen developments, including shifts in global economic conditions.

Speaker #2: Supported by the continued growth of our higher margin businesses, we believe we can maintain consolidated gross margins in the low 30% range for the year.

Speaker #2: Our outlook reflects the interest rate cuts announced to date, and assumes an annual effective tax rate of 26.5% and a share count of approximately 22.8 million shares.

Speaker #2: These projections do not incorporate the potential effects of significant acquisitions or other unforeseen developments, including shifts in global economic conditions. Reiterating what we said when we provided our fiscal 2026 guidance in early November, it's important to note that for the six months through March of last year, our revenue and EBITDA was flat to up slightly, while business became drastically more challenged for us and the industry after Liberation Day in early April.

Mike McLamb: Reiterating what we said when we provided our fiscal 2026 guidance in early November, it's important to note that for the six months through March of last year, our revenue and EBITDA was flat to up slightly, while business became drastically more challenged for us and the industry after Liberation Day in early April. Liberation Day disruption was at the very beginning of the June quarter, which seasonally is the most meaningful quarter to us and the industry. The resulting softness in that quarter caused the inventory overhang the industry is still working through. Accordingly, when modeling the business, you should bear in mind that the front half of the year is meaningfully more difficult from an earnings comparison.

Reiterating what we said when we provided our fiscal 2026 guidance in early November, it's important to note that for the six months through March of last year, our revenue and EBITDA was flat to up slightly, while business became drastically more challenged for us and the industry after Liberation Day in early April. Liberation Day disruption was at the very beginning of the June quarter, which seasonally is the most meaningful quarter to us and the industry. The resulting softness in that quarter caused the inventory overhang the industry is still working through. Accordingly, when modeling the business, you should bear in mind that the front half of the year is meaningfully more difficult from an earnings comparison.

Speaker #2: Liberation day disruption was at the very beginning of the June quarter, which seasonally is the most meaningful quarter to us and the industry. The resulting softness in that quarter caused the inventory overhang the industry is still working through.

Speaker #2: Accordingly, when modeling the business, you should bear in mind that the front half of the year is meaningfully more difficult from an earnings comparison.

Speaker #2: Having said that, and looking at current business conditions, January trends have been solid thanks in large part to successful boat shows, and the month will finish with positive same-store sales.

Mike McLamb: Having said that, and looking at current business conditions, January trends have been solid, thanks in large part to successful boat shows, and the month will finish with positive same-store sales. With that, I'll turn the call back over to Brett for closing comments. Brett?

Having said that, and looking at current business conditions, January trends have been solid, thanks in large part to successful boat shows, and the month will finish with positive same-store sales. With that, I'll turn the call back over to Brett for closing comments. Brett?

Speaker #2: With that, I'll turn the call back over to Brett for closing comments. Brett? Thank you, challenging economic environment across the Despite the recreational boating industry, we expect activity to seasonally strengthen as we head into the spring selling season.

Brett McGill: Thank you, Mike. Despite the challenging economic environment across the recreational boating industry, we expect activity to seasonally strengthen as we head into the spring selling season. Early momentum at this year's boat shows has been encouraging, and our position within the premium segment puts us in a strong position to capture meaningful growth and outperform the broader market as conditions improve. Our strength in the recreational marine sector comes from our diverse, interconnected business lines. This integrated approach builds operational efficiency and long-term value. Through continued innovation, elevated customer experience, and expansion in high-margin areas of our business, we remain confident in our ability to drive sustained growth and long-term value. With that, Mike and I will be happy to take your questions. So operator, please open up the line for Q&A.

Speaker #2: Early momentum at this year's boat shows has been encouraging, and our position within the premium segment puts us in a strong position to capture meaningful growth and outperform the broader market as conditions improve.

Speaker #2: Our strength in the recreational marine sector comes from our diverse interconnected business lines. This integrated approach builds operational efficiency and long-term value. Through continued innovation, an elevated customer experience, and expansion in high-margin areas of our business, we remain confident in our ability to drive sustained growth and long-term value.

Speaker #2: With that, Mike and I will be happy to take your questions, so operator, please open up

Speaker #2: the line for Q&A.

Speaker #3: Thank

Speaker #3: you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we pull for questions. Our first question is from Joe Altobello with Raymond James. Please proceed.

Speaker #3: You may press star two if you would like to remove your question from the queue, and for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker #3: One moment while we pull for questions. Our first question is from Joe Altobello with Raymond James. Please proceed.

Speaker #4: Thanks. Hey, guys. Good morning. Not surprisingly, one to start on gross margin here. I know, Mike, you mentioned your second half compares get easier, but what are you assuming in terms of the discounting environment as we progress throughout the selling season?

Joe Altobello: Thanks. Hey, guys. Good morning. Not surprisingly, want to start on gross margin here. I know, Mike, you mentioned your second half compares get easier, but what are you assuming in terms of the discounting environment, you know, as we progress throughout the selling season? And if that does get better, is this offset by lower OEM promotional support?

Speaker #4: And if that does get better, is this offset by lower OEM promotional

Speaker #4: support? Good question, Joe.

Mike McLamb: Good question, Joe. So, we expect, as we said in the prepared remarks, that during this quarter, which is during the wintertime, the promotional environment is still going to be pretty active and pretty aggressive. That's baked into our guidance numbers. We do think when you get into maybe late March, or early in the June quarter, the weeks on hand of inventory in the industry are expected to actually drop, you know, first get even with where they normally would be, and then get below where they would normally be. And at that point, I think, you know, lesser capitalized dealers out there who have been under a lot of pressure will feel a lot better. They'll be easing, you know, their aggressiveness, which does impact the entire industry, including us.

Speaker #5: So we expect, as we said in the prepared remarks, that during this quarter, which is during the wintertime, the promotional environment is still going to be pretty active and pretty aggressive.

Speaker #5: That's baked into our guidance numbers. We do think when you get into maybe late March, or early in the June quarter, the weeks on hand of inventory in the industry are expected to actually drop, first first get even with where they normally would be, and then get below where they would normally be.

Speaker #5: And at that point, I think lesser-capitalized dealers out there who have been under a lot of pressure will feel a lot better. They'll be easing their aggressiveness, which does impact the entire industry, including us.

Speaker #5: And I think in kind of early in the spring, is the opportunity for margins to begin to recover from the levels that they're at today, which historically very, very low.

Mike McLamb: And I think in kind of early in the spring is the opportunity for margins to begin to recover from the levels that they're at today, which historically very, very low. I don't think it's going to be a hockey stick recovery, but I think it's going to start to recover, and for sure in the June quarter, which is meaningful. And then as it relates to how what that means for promotional environment for the manufacturers, I would think in some cases, they probably can also take a little bit of their foot off the gas a little bit as they work closely with dealers like us and their and their partners. But we're all aligned in terms of continuing to create retail and stay ahead of demand and continue to create demand.

And I think in kind of early in the spring is the opportunity for margins to begin to recover from the levels that they're at today, which historically very, very low. I don't think it's going to be a hockey stick recovery, but I think it's going to start to recover, and for sure in the June quarter, which is meaningful. And then as it relates to how what that means for promotional environment for the manufacturers, I would think in some cases, they probably can also take a little bit of their foot off the gas a little bit as they work closely with dealers like us and their and their partners. But we're all aligned in terms of continuing to create retail and stay ahead of demand and continue to create demand.

Speaker #5: I don't think it's going to be a hockey stick recovery, but I think it's going to start to recover for sure in the June quarter, which is meaningful.

Speaker #5: And then as it relates to what that means for promotional environment for the manufacturers, I would think in some cases they probably can also take a little bit of their foot off the gas a little bit as they work closely with dealers like us and their partners.

Speaker #5: But we're all aligned in terms of continued to create retail and stay ahead of demand and continue to create

Speaker #5: demand. Got it.

Joe Altobello: Got it. Very helpful. Maybe just to follow up on that, you mentioned you still expect inventory reductions in the back half. Is there a number that you have in mind where you want to end the fiscal year from an inventory standpoint?

Speaker #4: Very helpful. Maybe just to follow up on that, you mentioned you still expect inventory reductions in the back half. Is there a number that you have in mind where you want to end the fiscal year from an inventory

Speaker #4: standpoint? You know

Mike McLamb: You know what? We talk a lot about numbers internally, but really what we're trying to get to is the inventory, or the inventory turns for us are below where we normally would like them to be. We're below 2 times now, which is we're normally above 2 times. So we're trying to end fiscal 2025/26 with inventory turns above 2 times. And to get there, our inventory will have to be a little bit lower than where we ended last year, which was already a reduction from the year before. And we've made very good progress, as Brett said, being $170 million down year-over-year at December. And, you know, subject to retail expectations, I think we'll end the year with less inventory dollars.

Speaker #5: We talk a lot about numbers internally, but really what we're trying to get to is the inventory, or the inventory turns for us are below where we normally would like them to be.

Speaker #5: We're below two times now, which is where we're normally above two times. So we're trying to end fiscal 2025 and Q2 2026 with inventory turns above two times, and to get there.

Speaker #5: Our inventory will have to be a little bit lower than where we ended last year, which was already a reduction from the year before.

Speaker #5: And we've made very good progress as Brett said, being 170 million dollars down year over year in December. And subject to retail expectations, I think we'll end the year with less inventory dollars.

Speaker #4: Okay. Super.

Joe Altobello: Okay, super. Thank you.

Speaker #5: Thanks,

Mike McLamb: Thanks, Joe.

Speaker #5: Joe.

Speaker #3: Our next

Operator: Our next question is from James Hardiman with Citigroup. Please proceed.

Speaker #3: Question is from James Hardimon with Citigroup. Please proceed.

Speaker #6: Hey, this is Sean Wagner for James. I just wanted to first confirm, so you said nearly 11% same-store sales. Growth in the quarter, unit volumes, I think you said declined low to mid-single digits in ASPs were down.

[Analyst] (Citigroup): ... Hey, this is Sean Wagner on for James. I just wanted to, one, first confirm, so you said nearly 11% same-store sales growth in the quarter. Unit volumes, I think you said, declined low to mid-single digits, and ASPs were down. Is that correct? Or ASPs were up, I mean.

Sean Wagner: ... Hey, this is Sean Wagner on for James. I just wanted to, one, first confirm, so you said nearly 11% same-store sales growth in the quarter. Unit volumes, I think you said, declined low to mid-single digits, and ASPs were down. Is that correct? Or ASPs were up, I mean.

Speaker #6: Is that correct? Or were ASPs up, I mean?

Speaker #5: Yeah. To get to the 11% same-store sales growth with a mid-single digit decline in units, we had a very significant increase in average unit selling prices, which I think I said on the remarks.

Mike McLamb: Yeah, to get to the 11%, same-store sales growth with a mid-single digit decline in units, we had a very significant increase in average unit selling prices, which I think I said in the remarks. The strength of the Fort Lauderdale Boat Show really helped to propel that. That tends to be a bigger boat show, and it was a very strong show, so that drove AUPs in the quarter.

Speaker #5: The strength of the Fort Lauderdale boat show really helped to propel that. That tends to be a bigger boat show, and it was a very strong show.

Speaker #5: So that drove AUPs and the

Speaker #5: quarter. Okay.

[Analyst] (Citigroup): Okay. I guess, following up on that, if there's a mixed benefit on the top line, I guess, why didn't that translate into better gross margin, where you called out sort of a negative mix headwind?

Sean Wagner: Okay. I guess, following up on that, if there's a mixed benefit on the top line, I guess, why didn't that translate into better gross margin, where you called out sort of a negative mix headwind?

Speaker #4: I guess following up on that, if there's a mixed benefit on the top line, I guess why didn't that translate into better gross margin?

Speaker #4: Were you calling out sort of a negative mix headwind?

Speaker #5: Yeah, actually, it isn't really necessarily a negative. The mix is, when boat sales increase as much as they did in terms of boat sales revenue, 11%, and boats today are the lowest margin product we sell, given the fact that we have so many other higher margin businesses.

Mike McLamb: Yeah. Actually, it's not really necessarily a negative. The mix is when boat sales increase as much as they did in terms of boat sales revenue, 11%, and boats today are the lowest margin product we sell, given the fact that we're, you know, we have so many other higher margin businesses, that mix increase is adverse to your consolidated margin, if you follow me. If you sell a lot more of a lower margin product, it impacts your consolidated margins. That's what that comment meant, Sean.

Speaker #5: That mix increase is adverse to your consolidated margin if you follow me. If you sell a lot more of a lower margin product, it impacts your consolidated margins.

Speaker #5: That's what that comment meant to hit hit on.

Speaker #4: Okay. But you called out higher margin businesses contributing favorably to the consolidated gross margin. Is that just saying without those businesses, it would have been even worse?

[Analyst] (Citigroup): Okay. And you -- but you did... You called out higher margin businesses contributing favorably to the consolidated gross margin. Is that just saying without those businesses, it would've been even worse?

Sean Wagner: Okay. And you -- but you did... You called out higher margin businesses contributing favorably to the consolidated gross margin. Is that just saying without those businesses, it would've been even worse?

Speaker #5: Yeah, yes, for sure. The marina businesses that we're in—our superyacht services, finance and insurance, service, all the other business brokerage—all the other businesses we're in contain a much higher gross profit margin.

Mike McLamb: Yeah. Yes, for sure. The marina businesses that we're in, our super yacht services, finance and insurance service, all the other business brokerage, all the other business we're in, contain a much higher gross profit margin, and they all keep doing and performing pretty darn well.

Speaker #5: And they all keep doing and performing pretty darn well.

Speaker #4: Okay. Got it. Thank you very much.

[Analyst] (Citigroup): Okay. Got it. Thank you very much.

Sean Wagner: Okay. Got it. Thank you very much.

Speaker #5: Thanks, Sean.

Mike McLamb: Thanks, Sean.

Speaker #3: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Operator: Our next question is from Eric Wold with Texas Capital Securities. Please proceed.

Speaker #7: Thanks. Good morning, guys.

Eric Wold: Thanks. Good morning, guys. I just,

Speaker #5: Good morning.

Mike McLamb: Good morning.

Speaker #7: Coming out of the just initial set of boat shows, into the winter, I guess, can you talk a little bit about what you're seeing with demand kind of across the various income groups and price points?

Eric Wold: Coming out of just the initial set of boat shows and kind of into the winter, I guess, can you talk a little bit about what you're seeing with demand kind of across the various new income groups and price points? I know you talked about seeing demand on the high end, which raised the average price point. Does that mean there was weakness at the low end, or just that you saw greater demand at the high end? And does that give you- if that's the case, does that give you more confidence that, you know, some of the higher end premium buyers that surprisingly worked on staying on the sidelines are starting to come off?

Speaker #7: I know you talked about seeing demand on the high end, which raised the average price point. Does that mean there was weakness at the low end, or just that you saw greater demand at the high end?

Speaker #7: And does that give you if that's the case, does that give you more confidence that some of the higher-end premium buyers that surprisingly work on staying on the sidelines are starting to come off?

Speaker #5: Yeah. Hey, Eric, it's Brett. I think the Lauderdale boat show exactly what we saw. It's a higher ticket price type of show, and the demand was good.

Brett McGill: Yeah. Hey, Eric, it's Brett. I think the Lauderdale Boat Show is exactly what we saw. It's a higher ticket price type of show, and the demand was good. And in fact, like you just said, there were some people that had been waiting, that were just kind of want to go boating, and they just decided to kind of come in and get boating. So that was good momentum. Second half of the quarter, you know, was tough. You know, trends were down. I don't know if I'd categorize it, because that time of year for us is kind of a larger product, a winter season type of sales, so it's the bigger boats.

Speaker #5: And in fact, like you just said, there were some people that had been waiting that were just kind of want to go boating, and they just decided to kind of come in and get boating.

Speaker #5: So that was good momentum. Second half of the quarter, was tough. Trends were down. I don't know if I'd categorize it because that time of year for us is kind of a larger product, winter season type of sales.

Speaker #5: So it's the bigger boats. There's some industry data out there, but the fiberglass segment continues to be under pressure, which is we're trying to fight through that, and that's Mike's comments about kind of getting into the second half of the year.

Brett McGill: There's some industry data out there, but the fiberglass segment continues to be under pressure, which is, you know, we're trying to fight through that, and that's Mike's comments about kind of getting into the second half of the year with inventory being in good alignment. You know, good things will happen for that.

There's some industry data out there, but the fiberglass segment continues to be under pressure, which is, you know, we're trying to fight through that, and that's Mike's comments about kind of getting into the second half of the year with inventory being in good alignment. You know, good things will happen for that.

Speaker #5: With inventory being in good alignment, good things will happen for us moving forward.

Speaker #5: that. Okay.

Eric Wold: Okay, just to follow up, I know you're not necessarily a low-end boat seller, but I guess on the lower end of your scale, are you seeing that cohort of buyers change at all? Are they staying relatively cautious? Are they getting more cautious? Are they starting to come off the sidelines as well with rates coming down? What are you kind of seeing from the lower end?

Speaker #7: Just to follow up, I know you're not necessarily a low-end boat seller, but I guess on the lower end of your scale, are you seeing that cohort of buyers change at all?

Speaker #7: Are they staying relatively cautious? Are they getting more cautious? Are they starting to come off the sidelines as well with rates coming down? What are you kind of seeing from the lower end?

Speaker #5: Yeah. I think it feels similar. I think my comment about it being seasonally the larger boats, we're not feeling any additional pressure on the lower end of what we carry versus the upper end.

Brett McGill: Yeah, I think it feels similar. I think my comment about it being seasonally the larger boats, we're not feeling any additional pressure on the lower end of what we carry versus the upper end. It feels generally about the same.

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