MasterCraft Boat Holdings, Inc. reported consolidated net sales of $99.5 million for the second quarter of fiscal 2024, down $59.7 million from the second quarter of fiscal 2023. The decrease in net sales was reportedly due to lower unit volume and an increase in dealer incentives, partially offset by higher prices and favorable mix and options. Dealer incentives include higher floor plan financing costs due to increased dealer inventories and interest rates, and other incentives as the retail environment remains competitive.
Gross margin declined 520 basis points during the second quarter, compared to the prior-year period. Lower margins resulted from lower cost absorption due to planned decreased sales volume, higher dealer incentives and higher costs related to material, labor and overhead inflation, partially offset by higher prices.
Operating expenses were relatively consistent for the second quarter of fiscal 2024 compared to the prior-year period. In pursuit of growth initiatives, we continue to invest in product development and marketing.
Net income from continuing operations was $5.9 million for the second quarter, compared to $20.0 million in the prior-year period. Diluted net income from continuing operations per share was 35 cents a share, compared to $1.12 for the second quarter of fiscal 2023.
Adjusted Net Income decreased to $6.3 million for the second quarter, or 37 cents per diluted share, compared to $21.3 million, or $1.20 per diluted share, in the prior-year period.
Adjusted EBITDA was $9.8 million for the second quarter of fiscal 2024, compared to $29.8 million in the prior-year period. Adjusted EBITDA margin was 9.8 percent for the second quarter, down from 18.7 percent for the prior-year period.
“Views regarding the economic outlook remain mixed and uncertain, which is limiting retail demand visibility,” said company CEO and Chairman Fred Brightbill. “The retail environment has become increasingly competitive as industry participants react to lower demand and higher inventory levels. The resulting increase in promotional activity will likely pressure margins across the industry. We continue to monitor retail results, assess the overall business and economic environment, and accordingly adjust our production and shipment plan. We expect to have a clearer picture of retail demand as we progress through the third and fourth quarters.”
Looking ahead, Mastercraft is narrowing its guidance range for the full fiscal year 2024:
- Consolidated net sales are now expected to be between $400 million and $412 million;
- Adjusted EBITDA is forecasted between $42 million and $47 million;
- Adjusted earnings per share are estimated between $1.53 and $1.78;
- The company expects capital expenditures to be approximately $20 million for the full year.
For the third quarter of fiscal 2024, consolidated net sales are expected to be approximately $92 million, with Adjusted EBITDA of approximately $7 million and Adjusted earnings per share of approximately 23 cents a share.
Image courtesy Mastercraft