What Happened:
Shares of boat and marine products retailer MarineMax (NYSE:HZO) fell 16.7% in the morning session after the company reported first quarter results with revenue and EPS missing analysts as its same-store sales fell short of analysts' expectations (2% vs estimates of 4%). Management was forced to use more aggressive promotional activity to stimulate demand as it cited a challenging market environment; there was an industrywide decline in boat registrations this quarter. As a result of the macroeconomic softness, MarineMax significantly lowered its full-year earnings forecast (EPS and EBITDA), missing Wall Street's estimates. During the quarter, the company completed its acquisition of William Tenders USA, a luxury yacht tender. Overall, this was a bad quarter for MarineMax.
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What is the market telling us:
MarineMax's shares are not very volatile than the market average and over the last year have had only 21 moves greater than 5%. Moves this big are very rare for MarineMax and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock dropped 15.5% on the news that the company reported first quarter results that missed analysts' revenue and non-GAAP EPS estimates. Gross margin also declined significantly. Looking ahead, its full-year earnings forecast was lowered and significantly missed Wall Street's estimates.
Management called out "a challenging retail environment which required us to take more aggressive pricing actions...pricing actions did result in lower gross margins and profitability. This was primarily due to increased discounting on certain boat models in response to the softer retail environment." Overall, it was a weak quarter for the company.
MarineMax is down 38.6% since the beginning of the year, and at $23.73 per share it is trading 41.7% below its 52-week high of $40.71 from July 2023. Investors who bought $1,000 worth of MarineMax's shares 5 years ago would now be looking at an investment worth $1,512.
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