Analyst sees better times ahead for MarineMax
CLEARWATER, Fla. – As expected, boat retail giant MarineMax, Inc. (NYSE: HZO) posted significant sales and earnings declines in the second quarter ended March 31, but increased its gross margins and reduced expenses.
“As we indicated in our April 16 release, continued deterioration in the marine retail environment, impacted by widely publicized pressures in the housing and credit markets, resulted in second quarter performance that fell below our expectations,” commented William H. McGill, Jr., chairman, president and CEO.
He added that the company continues to focus on growing its market share and exceeding customer expectations.
“We are also further reducing our purchases from manufacturers to better align our inventory levels with sales trends,” he stated. “Lastly, we continue to strive to ensure our cost structure is consistent with the level of sales we are obtaining.”
Analyst Ed Aaron of RBS Capital Markets said that given MarineMax’s note in its conference call that April sales were down less than March (about 20 percent vs. 44 percent), RBC is forecasting a decline of 10 percent for the third quarter, due in part to a planned sales event in June.
With MarineMax predicting a 30-percent reduction in unit orders and a 25-percent decline in dollar orders for the 2008 fiscal year, RBC added that it estimates MarineMax inventory will be down in the low double digits from last year, which is still “considerable lower than ideal.” Aaron estimated the company’s inventory will turn 1.8 times vs. the more normal level of about 2.5 times.
Same-store sales down 28 percent
Revenue was $233.3 million for the quarter ended March 31, compared with $325.1 million for the comparable quarter last year, MarineMax reported in a statement yesterday. Same-store sales declined approximately 28 percent, or $90.4 million, compared with a 2-percent increase in the comparable quarter last year. Revenue from stores recently opened or closed that were not eligible for inclusion in the same-store sales base decreased $1.4 million.
The net loss for the second quarter of fiscal 2008 was $3.5 million, compared with net earnings of $3.3 million in the comparable quarter last year, according to the company.
Revenue was $448.5 million for the six months ended March 31, compared with $559.1 million for the comparable period last year. Same-store sales declined approximately 20 percent, or $110.4 million, compared with a 6-percent increase in the comparable period last year.
The net loss for the six-months ended March 31 was $9.9 million, compared with a net loss of $454,000 for the comparable period last year.
MarineMax said same-store sales have been negatively impacted “by the widely reported economic softness that has impacted most retailers,” adding that its “geographic concentration in Florida and other markets that have been adversely affected by the housing slowdown have added to the decline in same-store sales.”
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