Malibu Boats, Inc. MBUU reported second-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate but revenues missing the same. However, both the top and bottom lines declined on a year-over-year basis. Weak retail demand negatively impacted the company’s results in the quarter.

Per Jack Springer, Chief Executive Officer of Malibu Boats, despite the current uncertainties in the macroeconomic landscape, there are encouraging signs emerging after its Year End Sales event for Malibu, showcasing the resilience of its brands. The forthcoming boat show season will serve as an additional indicator for providing another gauge of retail recovery.

Earnings & Revenues Details

During the fiscal second quarter, MBUU reported adjusted earnings per share (EPS) of 58 cents, beating the Zacks Consensus Estimate of 46 cents. In the prior-year quarter, it reported adjusted EPS of $1.78.

Quarterly revenues of $211.1 million missed the Zacks Consensus Estimate of $219 million. Also, the top line decreased 37.7% on a year-over-year basis. The decline in net sales was primarily attributed to reduced unit volumes across all segments, stemming from lower retail demand. Additionally, increased dealer flooring program costs were incurred across all segments due to higher interest rates and elevated inventory levels.

Segmental Performance

Net sales in the Malibu segment decreased 51.7% year over year to $76.4 million. The downside was mainly caused by lower units and increased dealer flooring program costs.

Net sales in the Saltwater Fishing segment decreased 21.6% year over year to $82.7 million.

Revenues from the Cobalt segment declined 30.7% year over year to $52 million.

Malibu Boats, Inc. Price and EPS Surprise

Malibu Boats, Inc. price-eps-surprise | Malibu Boats, Inc. Quote

Operating Highlights

Selling and marketing expenses declined 9.5% year over year to $5.6 million. The decline was primarily due to a decrease in marketing events.

General and administrative expenses totaled $15.4 million compared with $19.1 million reported in the prior-year quarter.

Adjusted EBITDA came in at $22.9 million compared with $57.6 million reported in the prior-year quarter. Adjusted EBITDA margin was 10.9% compared with 17% reported a year ago.

Balance Sheet

Cash, as of Dec 31, 2023, totaled $55.7 million compared with $78.9 million as of Jun 30, 2023.

Inventory was $157.8 million compared with $171.2 million reported in the prior-year period.

As of Dec 31, 2023, the company reported long-term debt of $35 million.

Fiscal 2024 Outlook

Management expects net sales to decline in the range of mid-to-high thirties on a year-over-year basis. It forecast adjusted EBITDA margin to fall 800-900 basis points from the year-ago levels.

Malibu Boats currently has a Zacks Rank #3 (Hold).