MarineMax (NYSE:HZO) Reports Bullish Q2
Boat and marine products retailer MarineMax (NYSE:HZO) beat analysts' expectations in Q2 CY2024, with revenue up 5% year on year to $757.7 million. It made a non-GAAP profit of $1.51 per share, down from its profit of $2.07 per share in the same quarter last year.
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MarineMax (HZO) Q2 CY2024 Highlights:
Revenue: $757.7 million vs analyst estimates of $720.3 million (5.2% beat)
Adj. EBITDA: $70.4 million vs analyst estimates of $64.9 million (8.5% beat)
EPS (non-GAAP): $1.51 vs analyst estimates of $1.37 (10.2% beat)
Full year EPS (non-GAAP) guidance of $2.70 at the midpoint, well above expectations
Locations: 75 at quarter end, down from 79 in the same quarter last year
Same-Store Sales rose 4% year on year (0.4% in the same quarter last year)
Market Capitalization: $706.1 million
“Despite persistent retail headwinds in the third quarter, our team executed well, delivering 5% top-line growth,” stated Chief Executive Officer and President Brett McGill.
Appropriately headquartered in Clearwater, Florida, MarineMax (NYSE:HZO) sells boats, yachts, and other marine products.
Boat & Marine Retailer
Retailers that sell boats and marine products sell products, sure, but they also sell an image and lifestyle to an often wealthier customer. Unlike a car–which many use daily to get to/from work and to run personal and family errands–a boat or yacht is certainly a discretionary, luxury, nice-to-have purchase. While there is online competition, especially for research and discovery, the boat and yacht market is still very brick-and-mortar based given the magnitude of the purchase and the logistical costs associated with moving these products over long distances.
Sales Growth
MarineMax is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale.
As you can see below, the company's annualized revenue growth rate of 14.8% over the last five years was solid despite not opening many new stores, implying that growth was driven by increased sales at existing, established stores.
This quarter, MarineMax reported decent year-on-year revenue growth of 5%, and its $757.7 million in revenue topped Wall Street's estimates by 5.2%. Looking ahead, Wall Street expects sales to grow 3.1% over the next 12 months, a deceleration from this quarter.
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Same-Store Sales
A company's same-store sales growth shows the year-on-year change in sales for its brick-and-mortar stores that have been open for at least a year, give or take, and e-commerce platform. This is a key performance indicator for retailers because it measures organic growth and demand.
MarineMax's demand within its existing stores has been relatively stable over the last eight quarters but fallen behind the broader consumer retail sector. On average, the company's same-store sales have grown by 1.9% year on year. Given its flat store count over the same period, this performance stems from increased foot traffic at existing stores or higher e-commerce sales as the company shifts demand from in-store to online.
In the latest quarter, MarineMax's same-store sales rose 4% year on year. This growth was an acceleration from the 0.4% year-on-year increase it posted 12 months ago, which is always an encouraging sign.
Key Takeaways from MarineMax's Q2 Results
We were impressed by how significantly MarineMax blew past analysts' revenue expectations this quarter due to better-than-expected same-store sales. We were also glad its full-year earnings guidance exceeded Wall Street's estimates. Zooming out, we think this was a great quarter that shareholders will appreciate. The stock remained flat at $31.66 immediately after reporting.
So should you invest in MarineMax right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.