Recreational boats manufacturer Malibu Boats posted a net loss of $5.1 million in the first quarter ended September 30 as sales fell 32.9 percent.

First Quarter Fiscal 2025 Highlights Compared to First Quarter Fiscal 2024:

  • Net sales decreased 32.9 percent to $171.6 million
  • Unit volume decreased 39.7 percent to 1,024 units
  • Gross profit decreased 50.3 percent to $28.2 million
  • GAAP net income decreased 124.8 percent to a net loss of $5.1 million
  • GAAP net income available to Class A Common Stock per share (diluted) decreased 125.5 percent to a net loss of 25 cents per share
  • Adjusted EBITDA decreased 74.6 percent to $9.9 million
  • Adjusted fully distributed net income per share decreased 92.9 percent to 8 cents per share on a fully distributed weighted-average share count of 20.6 million shares of Class A Common Stock

“During the first fiscal quarter, we continued to navigate a challenging retail environment. While we see some encouraging signs from a macro perspective, our team remains focused on managing the factors within our control, particularly through disciplined inventory management and executing our strategic initiatives,” commented Steve Menneto, CEO, Malibu Boats, Inc. “As we enter the boat show season, we are excited to display our 2025 lineup, which has already received strong initial reactions. This season presents an important opportunity to connect with customers and demonstrate the cutting-edge innovation and quality that sets us apart. Looking ahead, we are also pleased to announce that we plan to host an Investor Day during calendar year 2025, during which we will provide further insights into our long-term vision to drive Malibu into its next chapter of growth.”

“As expected, our financial performance this quarter reflects sequential improvements across revenues and margins as we scaled back promotional activity and continued showcasing our operating efficiencies. We are pleased with our execution in reducing our channel inventories and we anticipate wholesale shipments to improve as we progress through the remainder of the fiscal year,” commented Bruce Beckman, chief financial officer of Malibu Boats, Inc. “Additionally, we continue to execute on our capital allocation strategy, repurchasing an additional $10 million of our common stock over the quarter, underscoring our confidence in the business. With a solid foundation, we are well positioned to respond quickly to dynamic market conditions and continue positioning ourselves to deliver value to our shareholders.”

First Quarter Fiscal 2025 Results

Net sales for the fiscal first quarter decreased $84.3 million, or 32.9 percent, to $171.6 million as compared to the fiscal first quarter last year. The decrease in net sales was driven primarily by decreased unit volumes across all segments resulting primarily from decreased wholesale shipments, partially offset by a favorable model mix in our Malibu and Saltwater Fishing segments and inflation-driven year-over-year price increases.

Unit volume for the fiscal first quarter, decreased 674 units, or 39.7 percent, to 1,024 units as compared to the year-ago quarter. Our unit volume decreased primarily due to lower wholesale shipments across all segments driven by lower retail activity and our dealers’ desire to hold less inventory.

Overall consolidated net sales per unit increased 11.2 percent to $167,559 per unit for fiscal first quarter, compared to the fiscal first quarter last year. The increase in overall consolidated net sales per unit was driven primarily by favorable model mix in the Malibu and Saltwater Fishing segments and inflation-driven year-over-year price increases.

Malibu Segment
Malibu segment net sales decreased $49.0 million, or 46.7 percent, to $56.0 million for the three months ended September 30, 2024, compared to the year-ago quarter. Unit volumes attributable to our Malibu segment decreased 420 units for the fiscal first quarter, compared to the fiscal first quarter last year, said to be primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers’ desire to hold less inventory. The decrease in net sales was driven by a decrease in units, partially offset by a favorable model mix and inflation-driven year-over-year price increases.

Net sales per unit for the Malibu segment increased 11.7 percent year-over-year to $145,883 per unit for the fiscal first quarter, driven by favorable model mix, inflation-driven year-over-year price increases and non-boat related customer service parts sales.

Saltwater Fishing Segment
Saltwater Fishing segment net sales decreased $27.9 million, or 30.1 percent, to $64.8 million, for the fiscal first quarter, compared to the fiscal first quarter last year. Unit volumes attributable to our Saltwater Fishing segment decreased 191 units for the fiscal first quarter compared to the year-ago period, said to be primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers’ desire to hold less inventory. The decrease in net sales was driven by a decrease in units, partially offset by inflation-driven year-over-year price increases and a favorable model mix.

Net sales per unit for the Saltwater Fishing segment increased 14.4 percent to $215,837 per unit for the fiscal first quarter, driven by a favorable model mix and inflation-driven year-over-year price increases, partially offset by increased dealer incentive costs.

Cobalt Segment
Cobalt segment net sales decreased $7.4 million, or 12.7 percent, to $50.8 million for the fiscal first quarter, compared to the fiscal first quarter last year. Unit volumes attributable to Cobalt decreased 63 units for the fiscal first quarter compared to the year-ago quarter, said to be primarily due to lower wholesale shipments driven by lower retail activity during the period and our dealers’ desire to hold less inventory. The decrease in net sales was driven primarily by a decrease in units, partially offset by inflation-driven year-over-year price increases.

Net sales per unit for the Cobalt segment increased 3.5 percent to $149,441 per unit for the fiscal first quarter, compared to the year-ago quarter, driven by inflation-driven year-over-year price increases.

Income Statement Summary

Cost of sales for the fiscal first quarter decreased $55.7 million, or 28.0 percent, to $143.4 million as compared to the fiscal first quarter last year. The decrease in cost of sales was said to be primarily driven by a 32.9 percent decrease in net sales due to lower unit volumes, partially offset by higher per unit material and labor costs of $5.3 million, $6.8 million and $2.6 million for the Malibu, Saltwater Fishing, and Cobalt segments, respectively. The increase in per unit material and labor costs was primarily driven by increased prices due to fixed cost deleverage, a model mix that corresponds to higher cost per unit in our Malibu and Saltwater Fishing segments and inflationary pressures.

Gross profit for the fiscal first quarter decreased $28.6 million, or 50.3 percent, to $28.2 million compared to the year-ago quarter. The decrease in gross profit was driven primarily by lower net sales partially offset by decreased cost of sales for the reasons noted above. Gross margin for the fiscal first quarter decreased 580 basis points from 22.2 percent to 16.4 percent driven primarily by fixed cost deleverage due to lower sales and an increased mix of the Saltwater Fishing segment.

Selling and marketing expenses for the fiscal first quarter decreased $0.9 million, or 15.4 percent to $4.9 million compared to the year-ago quarter. The decrease was said to be driven primarily by a decrease in certain personnel expenses and marketing events. As a percentage of sales, selling and marketing expenses increased 60 basis points to 2.8 percent for the fiscal first quarter compared to 2.2 percent for the three months ended September 30, 2023. General and administrative expenses for the three months fiscal first quarter increased $6.5 million, or 31.6 percent, to $27.2 million as compared to the year-ago quarter, said to be driven primarily by a $3.5 million legal settlement along with other related legal fees and increased stock compensation expense. As a percentage of sales, general and administrative expenses increased 780 basis points to 15.9 percent for the fiscal first quarter compared to 8.1 percent for the fiscal first quarter last year. Amortization expense remained flat at $1.7 million for the 2024 fiscal first quarter.

Operating (loss) income for the first quarter of fiscal year 2025 decreased to an operating loss of $5.6 million from an operating income $28.6 million in the first quarter of fiscal year 2024.

Net (loss) income for the first quarter of fiscal year 2025 decreased 124.8 percent to a net loss of $5.1 million from net income of $20.8 million and net (loss) income margin decreased to negative 3.0 percent from 8.1 percent in the 2023 fiscal first quarter. adjusted EBITDA in the first quarter of fiscal year 2025 decreased 74.6 percent to $9.9 million from $39.0 million, while adjusted EBITDA margin decreased to 5.8 percent from 15.2 percent in the first quarter of fiscal year 2024.

Fiscal 2025 Guidance

For the full fiscal year 2025, Malibu continues to anticipate net sales increase percentage in the low single digits year-over-year and adjusted EBITDA margin is still expected to range from 10 percent to 12 percent.