Recreational Boats Maker Malibu Boats Hit By Low Demand And High Interest Rates; Here's Details On Q1 Performance

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% Y/Y to $56.8 million, with the margin contracting 250 basis points Y/Y 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% Y/Y 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.