Boat and marine products retailer OneWater Marine (NASDAQ:ONEW) missed analysts' expectations in Q1 CY2024, with revenue down 6.9% year on year to $488.3 million. It made a non-GAAP profit of $0.67 per share, down from its profit of $1.56 per share in the same quarter last year.
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OneWater (ONEW) Q1 CY2024 Highlights:
- Revenue: $488.3 million vs analyst estimates of $499.9 million (2.3% miss)
- EPS (non-GAAP): $0.67 vs analyst expectations of $0.68 (2% miss)
- Gross Margin (GAAP): 24.6%, down from 28% in the same quarter last year
- Same-Store Sales were down 5% year on year
- Store Locations: 96 at quarter end, decreasing by 4 over the last 12 months
- Market Capitalization: $293.6 million
A public company since early 2020, OneWater Marine (NASDAQ:ONEW) sells boats, yachts, and other marine products.
Boat & Marine RetailerRetailers that sell boats and marine products sell products, sure, but they also sell an image and lifestyle to an often wealthier customer. Unlike a car–which many use daily to get to/from work and to run personal and family errands–a boat or yacht is certainly a discretionary, luxury, nice-to-have purchase. While there is online competition, especially for research and discovery, the boat and yacht market is still very brick-and-mortar based given the magnitude of the purchase and the logistical costs associated with moving these products over long distances.
Sales GrowthOneWater is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 23.3% over the last five years was incredible as it added more brick-and-mortar locations and increased sales at existing, established stores.
This quarter, OneWater missed Wall Street's estimates and reported a rather uninspiring 6.9% year-on-year revenue decline, generating $488.3 million in revenue. Looking ahead, Wall Street expects sales to grow 3.8% over the next 12 months, an acceleration from this quarter.
Key Takeaways from OneWater's Q1 Results It was unfortunate to see OneWater miss analysts' revenue and EPS estimates this quarter, driven by a sizeable decrease in its same-store sales (a decline of 5% compared to estimates of a 2% decline). On the bright side, its full-year EPS and EBITDA guidance was robust and easily exceeded Wall Street's expectations.
It also anticipates its full-year same-store sales growth to be in the low to mid-single digits, which is comforting given Malibu Boats (NASDAQ:MBUU) (a boat manufacturer) reported this morning and anticipates a 40% drop in sales. It isn't a clean comp because OneWater runs a dealership model, but the two companies are in the same industry. Overall, this was a mediocre quarter for OneWater, but its outlook was quite encouraging. The stock is flat after reporting and currently trades at $20.15 per share.