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01/11 11:26
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: positive adjusted net income and free cash flow, but declining net sales and EBITDA margins. The Q&A reveals concerns about tariffs and inventory, with management offering vague responses. Despite some positive aspects, such as a significant YoY net income increase and healthy dealer base, the guidance suggests a decline in sales and EBITDA margins, leading to a neutral sentiment. The lack of clear strategies for tariffs and pricing further dampens optimism, suggesting limited stock price movement in the next two weeks.
Net Sales (Q4 2025) $207 million, a 30.4% increase year-over-year. The increase was driven by increased unit volumes in the Malibu segment, a favorable model mix across all segments, and decreased promotional costs from elevated year-ago levels.
Unit Volume (Q4 2025) 1,221 boats, a 16.8% increase year-over-year. This was primarily due to increased unit volumes in the Malibu segment.
Consolidated Net Sales Per Unit (Q4 2025) $169,565 per unit, an 11.6% increase year-over-year. This was driven by inflation-driven price increases, decreased promotional costs, and a favorable model mix.
Gross Profit (Q4 2025) $32.7 million, a 162.1% increase year-over-year. The increase was driven by decreased promotional costs across all segments and a favorable model mix.
Gross Margin (Q4 2025) 15.8%, compared to 7.9% in the prior-year period. The improvement was due to decreased promotional costs and a favorable model mix.
Selling and Marketing Expenses (Q4 2025) $5.4 million, a 10.7% increase year-over-year. The increase was driven by higher compensation and marketing activity. As a percentage of sales, these expenses decreased by 50 basis points to 2.6%.
General and Administrative Expenses (Q4 2025) $18.8 million, a 12.7% decrease year-over-year. The decrease was driven by lower legal and professional fees and a one-time IT expense in the prior year. As a percentage of sales, these expenses were 9.1%.
Adjusted EBITDA (Q4 2025) $19.7 million, with an adjusted EBITDA margin of 9.5%, a 1,210 basis point increase year-over-year. This was due to decreased promotional costs and a favorable model mix.
GAAP Net Income (Q4 2025) $4.8 million, a significant increase from the prior year.
Adjusted Net Income Per Share (Q4 2025) $0.42 per share, a 205% increase year-over-year. This was calculated using a normalized tax rate of 24.5% and a weighted average share count of approximately 19.3 million shares.
Free Cash Flow (Q4 2025) $14.3 million, inclusive of $7 million in capital expenditures.
Net Sales (Fiscal Year 2025) $807.6 million, a 2.6% decrease year-over-year. This was due to a 9% decrease in unit volume to 4,898 boats, partially offset by a 7.1% increase in net sales per unit.
Consolidated Net Sales Per Unit (Fiscal Year 2025) $164,876 per unit, a 7.1% increase year-over-year. This was driven by a favorable model mix and inflation-driven price increases.
Gross Profit (Fiscal Year 2025) $144.1 million, a 2% decrease year-over-year.
GAAP Net Income (Fiscal Year 2025) $15.2 million, compared to a loss of $56.4 million in the prior year.
Adjusted EBITDA (Fiscal Year 2025) $74.8 million, a 9.1% decrease year-over-year. Adjusted EBITDA margin decreased by 60 basis points to 9.3%.
Adjusted Net Income Per Share (Fiscal Year 2025) $1.58 per share, a 21.4% decrease year-over-year. This was calculated using a normalized tax rate of 24.5% and a weighted average share count of approximately 19.7 million shares.
Free Cash Flow (Fiscal Year 2025) $28.9 million, inclusive of $27.9 million in capital expenditures and proactive raw material purchases in advance of increased tariff rates.
Introduction of new models: 11 new model year '26 boats introduced, including Cobia 245 and 305 center consoles, Malibu 22 LSV, Axis T250, and Pursuit S388. Six more models to be unveiled in the coming months.
Innovation: Focus on customer-centric innovation with advanced boating technology and high-quality products. New Monsoon engine with enhanced power, torque, and efficiency.
Dealer network upgrades: Significant progress in upgrading dealer network, with new dealers onboarded smoothly and liquidations completed. Rebuilding market share in affected areas.
Market performance: Fiscal Q4 was the weakest quarter of the year, with the broader market down mid-teens percentage points. Anticipation of gradual improvement in fiscal 2026.
Financial performance: Net sales increased 30.4% in Q4 to $207 million. Gross profit rose 162.1% to $32.7 million. Adjusted EBITDA margin increased to 9.5%.
Cost management: Reduced CapEx spending and promotional costs. Strategic supply chain management to mitigate tariff impacts.
Capital allocation: Returned $36 million to shareholders through share repurchases. Generated $29 million in free cash flow.
Long-term positioning: Focus on operational discipline, dealer-first approach, and readiness to capitalize on market recovery.
Retail Environment: The marine industry faced a challenging retail environment in fiscal year 2025, with softer retail demand and macroeconomic uncertainties impacting consumer sentiment.
Tariff Uncertainty: Heightened tariff uncertainty continues to weigh on the market, with anticipated modest direct impacts on fiscal 2026 cost structure, estimated between 1.5% to 3% of cost of sales.
Dealer Inventory Levels: Elevated dealer inventory levels and the need for inventory alignment remain a challenge, with market softness resulting in higher-than-anticipated inventory levels at year-end.
Macroeconomic Uncertainty: Ongoing macroeconomic uncertainty, including elevated interest rates, continues to temper retail demand and consumer confidence.
Market Decline: The broader market experienced a mid-teens percentage point decline in fiscal Q4, with expectations of mid- to high single-digit declines in fiscal year 2026.
Segment Profitability: Adjusted EBITDA margins for the Saltwater Fishing and Cobalt segments decreased in fiscal year 2025, reflecting challenges in maintaining profitability in these areas.
Trade Policy Changes: The timing of trade policy changes has created additional uncertainty, impacting consumer sentiment and market conditions.
Fiscal Year 2026 Market Outlook: The company expects markets to decline in the range of mid- to high single digits for the year, with high single-digit to low double-digit declines in the first half and some improvement projected in the back half.
Net Sales Guidance for Fiscal Year 2026: Year-over-year net sales are anticipated to be flat to down mid-single-digit percentage points. For Q1, net sales are expected to increase by high single digits.
Adjusted EBITDA Margins for Fiscal Year 2026: Consolidated adjusted EBITDA margins are expected to range from 8% to 9% for the fiscal year. For Q1, adjusted EBITDA margins are projected to be between 5% to 6%.
Tariff Impact on Cost Structure: Tariffs are expected to modestly impact the fiscal 2026 cost structure, estimated between 1.5% to 3% of cost of sales, assuming current tariff rates. The company plans to mitigate these impacts through strategic supply chain management and leveraging vertically integrated U.S. manufacturing capabilities.
Dealer Inventory and Market Conditions: Market softness has resulted in modestly higher-than-anticipated dealer inventory levels at year-end. Macro uncertainty remains a key headwind in tempering retail demand.
Product Launches and Innovation: The company plans to introduce 11 new model year '26 boats, including the Cobia 245 and 305 center consoles, Malibu 22 LSV, Axis T250, and Pursuit S388. Six additional models will be unveiled in the coming months.
Long-Term Growth and Market Recovery: The company expects gradual improvement in retail demand in fiscal year 2026 but has not yet seen a clear inflection point signaling a return to growth for the overall industry. The company remains disciplined and prepared to capitalize on higher demand when the market recovers.
Share Repurchase: In fiscal 2025, Malibu Boats returned $36 million to shareholders through share repurchases. Additionally, during Q4, the company repurchased $5.6 million of stock. Over the fiscal year, a total of $35.9 million was returned to shareholders through share repurchases.
The earnings call presents a mixed outlook. While there are positive signals like increased net income per share and strong dealer reception to the MBI program, market decline and higher inventory levels are concerning. The Q&A section reveals uncertainties about interest rates and consumer behavior, impacting sentiment. The strategic plan indicates flat to declining sales, and guidance suggests modest margin improvements. Overall, the lack of clear growth catalysts and market challenges balance the positives, resulting in a neutral sentiment.
The earnings call presents mixed signals: positive adjusted net income and free cash flow, but declining net sales and EBITDA margins. The Q&A reveals concerns about tariffs and inventory, with management offering vague responses. Despite some positive aspects, such as a significant YoY net income increase and healthy dealer base, the guidance suggests a decline in sales and EBITDA margins, leading to a neutral sentiment. The lack of clear strategies for tariffs and pricing further dampens optimism, suggesting limited stock price movement in the next two weeks.
The earnings call reveals a mixed financial performance, with strong net sales and income growth, but a negative market outlook and revised guidance. The company anticipates a decline in retail markets and has adjusted its capital expenditures and share repurchase plans due to macroeconomic uncertainties. The Q&A section highlights concerns about demand trends and tariff risks, with management providing unclear responses. These factors, combined with a reduction in share repurchase pace and a cautious market outlook, suggest a negative sentiment and potential stock price decline in the short term.
The earnings call reveals a challenging environment with a 5.1% sales decline, significant unit volume drop, and increased expenses, notably in legal and administrative costs. The saltwater market weakness and hurricane impacts in Florida further exacerbate the situation. Despite a stock repurchase, the overall financial health appears strained, with declining net income and EBITDA margins. The Q&A section highlights uncertainties, especially regarding future revenue visibility and mixed demand trends. These factors collectively suggest a negative sentiment, likely leading to a stock price decrease in the coming weeks.
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