Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you talk about why the updated guidance range for earnings and EBITDA has widened versus 3 months ago?
A: Michael H. McLamb, Executive VP, CFO, Secretary & Director of MarineMax, explained that as GAAP earnings are lowering, the noncash items like stock-based compensation and depreciation do not decrease but remain flat, causing these items to grow as a percentage of overall earnings, which is what's driving the widening of the guidance range.
Q: Regarding gross margin, what level of promotional spend are you anticipating for the selling season, and how do you see this impacting gross margin over the balance of fiscal '24?
A: William Brett McGill, CEO, President & Director of MarineMax, noted that they plan to continue aggressive promotional activities during the selling season to move inventory, especially for boats that are in high demand. He expressed confidence that margins have found their bottom but acknowledged there might be more pressure on some units.
Q: How much are OEMs contributing to help with the promotional environment, and when do you see the promotional environment subsiding?
A: William Brett McGill stated that they are actively working with manufacturers to respond to retail softness and that manufacturers are cooperative and responsive. He indicated that promotional activities might increase as manufacturers want dealers to have good inventory levels going into the mid-summer for the new model year.
Q: What surprised you on the SG&A front, and where do you see the biggest opportunities for SG&A savings?
A: Michael H. McLamb mentioned that the inflationary environment has caused higher than expected increases in various SG&A components like insurance and audit fees. Looking forward, they plan to focus on payroll, marketing efficiency, and location optimization to manage SG&A more effectively.
Q: With the inventory levels ending higher this quarter due to sales not meeting expectations, where do you see inventory levels going by the end of this fiscal year?
A: Michael H. McLamb projected that inventory levels would be higher than the previous year-end, noting that inventory dynamics vary by brand and segment. He emphasized ongoing collaboration with manufacturers regarding production and incentives for the upcoming model year.
Q: Can you discuss the impact of weather on sales and the effectiveness of promotions in driving retail activity?
A: Michael H. McLamb acknowledged that weather likely played a role in sales performance, with a notably wet and windy season impacting boating activities. He confirmed that targeted promotional activities, when well-coordinated with manufacturers, effectively drive retail activity and create consumer urgency.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.