MarineMax, Inc. (NYSE: HZO) announced results for its second quarter ended March 31, 2017. Revenue grew 23 percent to $245.0 million for the quarter ended March 31, 2017 from $199.6 million for the comparable quarter last year.
“Given a strong start to fiscal 2017, which is on top of many years of sustained sales growth, it is clear that the industry is continuing its recovery. It is also clear that consumers are embracing the new, innovate products and the benefits of boating with MarineMax,” said William H. McGill, Jr., chairman, president, and chief executive officer of MarineMax during an earnings call on April 27. “With our very strong boat show performance in almost all of our winters shows, including the late March West Palm Beach Show, as well as solid trends each month, we anticipate closing additional sales in the quarter. Given our backlog of business and trends, we believe most of the business will be captured in this quarter.”
Same-store sales increased 13 percent in addition to the 16 percent growth in the same period a year ago. The company’s net income was $2.7 million, or $0.11 per diluted share for the quarter ended March 31, 2017, compared to net income of $2.5 million or $0.10 per diluted share for the comparable quarter last year.
“What is intriguing about our 13 percent growth this quarter is that it was virtually 100 percent driven by units. Our unit growth implies we are gaining market share as the unit growth in the industry was not that strong,” said Michael McLamb, chief financial officer at MarineMax. “It also says the new models from our manufacturing partners are hitting the mark with the consumers. Lastly, it clearly indicates that we saw great growth trends in the quarter and that the industry is doing well.”
Revenue increased 28 percent to $471.9 million for the six months ended March 31, 2017, compared with $369.1 million for the comparable period last year. Same-store sales grew approximately 20 percent on top of 12 percent growth for the comparable period last year. Net income for the six months ended March 31, 2017 was $5.4 million or $0.22 per diluted share, compared with a net income of $3.2 million, or $0.13 per share for the comparable period last year.
“Given our robust growth in sales, which we expected to be incrementally higher, MarineMax continues to capture share in an expanding market. While the timing of our sales is difficult to predict, as illustrated by the growth in same-stores sales of 13 percent this quarter and 28 percent in the previous quarter, we believe that demand remains strong,” said McGill. “Beyond the addition of the nine stores from the two acquisitions we completed over the past twelve months, our expense structure reflects our expectation of sustained annual revenue growth given the trends we have experienced over the past several years. We also believe the addition of new models, combined with current sales trends, should support our ongoing efforts to expand gross margins.”
Based on current business conditions, retail trends and other factors, the company is reaffirming its annual guidance expectations for fully taxed earnings per diluted share to be in the range of $1.14 to $1.24 for fiscal 2017. These expectations do not take into account, or give effect for future material acquisitions that may be completed by the company during the fiscal year or other unforeseen events.
As it relates to the reaffirmed guidance, “The takeaway is that while there will be volatility in earnings quarter to quarter, over the course of the year we have delivered not only industry-leading but some of the strongest sales and earnings results as it relates to many other consumer-related businesses,” said McGill. “To that point, let me thank our MarineMax team for producing such sustained, strong results, while ensuring our customers are happy. Our stores and our team continue to deliver the boating dream while we’re helping our customers enjoy the boating lifestyle.”
In the December quarter earnings call, McLamb reported that MarineMax expected to deliver same-store sales growth for the full fiscal year of approximately 10 to 11 percent. In the second quarter earnings call, he increased that expectation to 13 to 16 percent.
“While the March quarter came in with less revenue than we anticipated, we believe – based on our backlog, customer deposits, industry feedback and trends – that we should deliver same-store sales growth for the full fiscal year in the range of 13 to 16 percent,” he said. “This does imply second-half internal growth in addition to the remaining added revenue from the Hall acquisition.”
Increased business efforts
MarineMax expressed optimism for the second half of fiscal 2017, with increased boat show activity and customer participation in its events in the past few months. As a result, the company has invested in the future through adding team members in both sales and service, as well as increasing marketing efforts.
“We believe these investments should enable us to capture additional business and market share gains for the long term,” said McGill. “We expect to continue to build on our position as the largest retailer in the industry, given our customer-centric approach and its many attributes, which include our experienced leadership at our stores and at boat shows, our unique offerings with premium manufacturers, our getaway and events with our customers as well as ongoing training and education for our team and our customers.”
As highlighted in the first quarter 2017 earnings call, MarineMax remains committed to an acquisition strategy for the year.
“MarineMax, through the strength of our balance sheet, remains in discussions with dealers about potential acquisitions. As we have done in the past, we will maintain our disciplined acquisition strategy when the terms and the culture are aligned,” said McGill. “In the interim, we will focus on the continued brand and segment expansions that have propelled our revenue growth through this recovery.”