Despite lingering winter, MarineMax increased same-store sales in Q2 2013
In the face of a lingering winter that has impacted sales in the northern tier of states, MarineMax reported its same-store sales increased approximately 12 percent in Q2 2013 on top of an exceptional 26 percent increase in the same quarter last year. The positive figures led to an 11 percent rise in revenue, which totaled $160 million for the quarter, compared with $144 million for second quarter of 2012.
MarineMax reported net income of $344,000, or $0.01 per diluted share, for the second quarter of FY 2013. The company’s net loss for the six months ended March 31, 2013 was $3.8 million, or $0.17 per share, compared with a net loss of $1.9 million, or $0.08 per share, for the same period last year.
During the earnings call, CEO Bill McGill said the company’s growth came from significant increases in new and used boats in the southern market. He also expressed dismay at the effects of lingering winter-like weather across the north, which has impacted dealership foot traffic, de-winterization business and the ability to deliver previously purchased boats to consumers.
McGill expressed general optimism for the future as signs, he said, point to a continued recovery of the marine industry.
"Normal spring weather has not come on time and, as a result, our normal spring launch is definitely behind previous years,” McGill said. “As we have previously discussed, it is very apparent to us that the industry recovery is underway, and the industry growth in units will be much greater in the future.”
While southern states have also seen a cooler-than-normal spring season, the market’s strength generated strong sales and unit growth for MarineMax. This regional success, McGill said, suggests that as the weather improves in other markets, pent-up demand will lead to nation-wide sales growth as the season progresses.
“We recognize that certain industry data points have turned negative, but our results clearly show such trends are weather related,” he said.
As signs pointed to continued winter-like weather in the north, MarineMax increased promotional spending and lowered profit margins, an effort that has since been curtailed as cost pressures continued to impact its bottom line. The company also saw an unexpected increase in health benefit costs with “a flurry of unusually large claims.”
In the face of headwinds, CFO Mike McLamb pointed to a 36-percent increase in boat revenue in southern states, and a welcome increase in the sport cruiser segment, which has been one of the industry’s last to recover.
“We are certainly not happy with the lack of leverage in the quarter and have curtailed the promotional efforts we implemented,” McLamb said. “We constantly review our recurring costs and are looking at areas that can be further reduced to help ensure we improve the leverage in the company structure.”