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OneWater Marine Inc. (ONEW)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue grew to $375.8M (+3.2% y/y) with same‑store sales +4.2%; gross margin compressed to 22.4% due to discounting on exiting brands, driving GAAP net loss of $13.6M (‑$0.81 diluted EPS) and Adjusted EBITDA of $1.9M .
  • Sequentially, revenue was broadly flat versus Q4 ($377.9M) but margins stepped down versus the 24.0% in Q4, reflecting winter promotions and brand exits; Adjusted EBITDA declined from $7.8M in Q4 to $1.9M in Q1 .
  • Management maintained FY2025 guidance: revenue $1.7–$1.85B, same‑store sales up low single digits, Adjusted EBITDA $80–$110M, Adjusted diluted EPS $1.00–$2.00 .
  • Near‑term stock reaction catalysts: inventory cleanup (inventory down 9.9% y/y to $636.7M), stronger finance & insurance (F&I) penetration, and expected margin lift after Q2 as exiting brands clear; macro rate path and boat show conversion remain watch items .

What Went Well and What Went Wrong

What Went Well

  • Unit growth outpaced the industry: management cited “low double‑digit increase in new unit sales” despite industry unit sales down ~14% in OneWater’s categories .
  • Finance & Insurance mix improved: F&I revenue rose 28% to $9.4M and penetration increased ~50 bps, helping offset front‑end margin pressure; “the team executed on strategies” to expand F&I income .
  • Operating discipline: SG&A fell to 21.0% of revenue from 21.9% y/y, reflecting cost actions and lower personnel costs; “cost reduction initiatives…continue to strengthen our financial profile” .

What Went Wrong

  • Margin compression: gross margin fell 270 bps y/y to 22.4%, driven by discounting to exit select brands and pricing on new/pre‑owned boats .
  • Profitability: GAAP net loss widened to $13.6M (‑$0.81 diluted EPS); Adjusted diluted EPS was ‑$0.54 and Adjusted EBITDA declined to $1.9M .
  • Distribution headwinds: service, parts & other sales were modestly lower (‑1.1% y/y), with Distribution segment affected by reduced production schedules at boat manufacturers .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$364.0 $377.9 $375.8
GAAP Diluted EPS ($)-$0.49 -$0.63 -$0.81
Adjusted Diluted EPS ($)-$0.38 -$0.36 -$0.54
Gross Profit ($USD Millions)$91.4 $90.7 $84.1
Gross Margin (%)(down 270 bps YoY to 22.4%) 24.0% 22.4%
Adjusted EBITDA ($USD Millions)$7.1 $7.8 $1.9

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q1 2024Q4 2024Q1 2025
New boat$241.1 $216.7 $248.0
Pre-owned boat$53.3 $73.4 $56.8
Finance & insurance income$7.4 $11.5 $9.4
Service, parts & other$62.3 $76.3 $61.6
Total revenues$364.0 $377.9 $375.8

KPIs and balance sheet:

KPIQ1 2024Q4 2024Q1 2025
Same‑Store Sales (%)—-17% +4.2%
Cash & Equivalents ($M)$44.6 $16.8 $22.7
Inventory ($M)$706.8 $590.8 $636.7
Long‑Term Debt ($M)—$422.8 $428.3
Liquidity ($M)—~$30 >$40
Adjusted Net Debt / TTM Adj. EBITDA (x)—4.9x 5.2x

Guidance Changes

MetricPeriodPrevious Guidance (11/14/2024)Current Guidance (1/30/2025)Change
RevenueFY2025$1.7B – $1.85B $1.7B – $1.85B Maintained
Dealership Same‑Store SalesFY2025Low single digits up Low single digits up Maintained
Adjusted EBITDAFY2025$80M – $110M $80M – $110M Maintained
Adjusted Diluted EPSFY2025$1.00 – $2.00 $1.00 – $2.00 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Inventory management/aging“Clean and optimized inventory” by Q3; sequential inventory down 13% in Q3; Q4 ended with inventory $590.8M; manufacturers cutting production .Inventory down ~10% y/y to $636.7M; aim to be >10% lower by Sep’25; aged/exiting brands being cleared .Improving; continued cleanup into H2.
Margins/front‑end pricingQ3 margin 24.4% normalized; Q4 margin 24.0% with exiting brands impact .Margin 22.4%, pressured by discounting on exiting brands; management expects lift post‑Q2 as exits complete .Near‑term pressure, recovery post‑Q2.
F&I penetrationSlight increase as % of boat sales in Q3; stable in Q4 .F&I +28% revenue to $9.4M; penetration +50 bps; sustained focus to expand .Positive mix/support to profitability.
Regional/weather impactsQ3: Texas severe weather; Q4: Hurricanes Helene/Milton disrupted sales .Florida stores reopened; comps excluding Florida stronger (6–7%); boat shows mixed with weather constraints .Normalizing; watch regional mix.
Macro/interest ratesFY2024 commentary on uncertainty; hurricanes impact .Fewer rate cuts expected vs prior; not a tailwind; cautious stance .Less supportive macro.
Tariffs/OEM postureNot highlighted prior.OEMs in wait‑and‑see; US manufacturing helps; broad impact seen as limited given cost structure .Monitor policy risk.

Management Commentary

  • “First quarter results exceeded expectations driven by higher unit sales in both new and preowned categories…Although these efforts pressured margins…the durability of our business model” — Austin Singleton, CEO .
  • “Overall, we are making good progress on managing inventory, which is down 10% year‑over‑year…SG&A declined…Between our inventory position and cost actions, we are setting OneWater up for success” — CEO prepared remarks .
  • “Finance and insurance revenue increased 28%…and was higher as a percentage of total boat sales” — CFO .
  • “We are maintaining our previously issued fiscal 2025 guidance…Adjusted EBITDA $80 to $110 million and adjusted earnings per diluted share $1 to $2” — CFO .
  • “Margins may tick up a little bit…once we get past our second quarter…as exiting brands clear” — CFO .

Q&A Highlights

  • Cadence and comps: October/November strong; December flat seasonally; Florida hurricane impact; ex‑Florida comps ~6–7% .
  • Margin trajectory: exiting brands sold at ~0 or negative margins near‑term; expect margin lift after Q2 as mix shifts to current model year .
  • Inventory targets: aim for >10% y/y reduction by Sep’25; aged inventory roughly <20% entering off‑season, trending healthier industry‑wide .
  • Pre‑owned supply and trades: used inventory remains constrained; trades rising; innovation from OEMs spurring upgrades; shift from consignments to trades .
  • F&I penetration sustainability: concerted effort with special finance options; plan to remain competitive and expand penetration .
  • M&A pipeline: active but disciplined timing; prefer deals to “fall in our lap” given industry winter stress and trailing‑12 pricing .
  • Tariffs: OEMs diversified and many products US‑made; management expects limited broad price impact from tariffs relative to core materials/engines .

Estimates Context

  • Wall Street consensus (S&P Global) was not retrievable at this time due to vendor rate limits; therefore, we cannot provide a beat/miss comparison versus consensus for Q1 2025. Values would be retrieved from S&P Global when available.

Key Takeaways for Investors

  • Mix defense: F&I penetration growth is a tangible lever offsetting front‑end margin pressure; sustained focus could cushion profitability through the inventory cleanup .
  • Margin inflection setup: exiting brands and winter promotions depress Q1/Q2 margins, but management expects margin normalization as the season progresses and exits complete .
  • Inventory discipline: y/y inventory down ~10% with a >10% reduction targeted by year‑end; improved turns should lower floor‑plan interest and operating friction costs .
  • Guidance credibility: FY2025 ranges reaffirmed despite mixed macro and storms, implying confidence in back‑half recovery and cost actions; monitor boat show conversions and regional normalization .
  • Balance sheet watch: net leverage at 5.2x TTM Adjusted EBITDA; plan to reduce leverage in latter half of 2025—execution will be key for equity risk appetite .
  • Macro sensitivity: fewer expected rate cuts dull potential demand tailwinds; promotional OEM support remains constructive for retail clearing of aged inventory .
  • Tactical trade setup: near‑term prints may reflect clearance pricing and muted margins; catalysts include boat show sell‑through, visible margin lift post‑Q2, and evidence of leverage reduction .

Additional Supporting Data and Notes

  • Distribution segment softness tied to manufacturer production schedules, affecting service/parts/other; dealership service partially offset .
  • Liquidity remained >$40M at quarter‑end; cash $22.7M; long‑term debt $428.3M; adjusted net debt leverage 5.2x .
  • Prior quarter (Q4 2024) hurricane impacts disrupted late‑quarter sales; ended with liquidity ~ $30M and net leverage 4.9x .