Earnings call transcript: Onewater Marine’s Q3 2025 results reveal mixed performance

Onewater Marine, a prominent player in the marine industry with a market capitalization of $259 million, reported its Q3 2025 earnings, showcasing a mixed performance. The company posted an adjusted earnings per share (EPS) of $0.79, falling short of the forecasted $1.18, marking a significant negative surprise of 33.05%. However, revenue exceeded expectations, coming in at $553 million compared to the forecasted $532.01 million, reflecting a positive surprise of 3.95%. Following the earnings release, Onewater’s stock saw a notable increase, rising by 8.93% to $14.56 in pre-market trading. According to InvestingPro analysis, the stock appears to be trading near its Fair Value, with analysts maintaining a consensus "Buy" recommendation.

Key Takeaways

• Onewater Marine’s EPS fell short of expectations, while revenue exceeded forecasts.
• The stock price increased by 8.93% in pre-market trading.
• The company is outperforming broader industry trends despite challenging market conditions.
• Inventory levels are down 14% year-over-year, aligning with strategic goals.
• Guidance for the full year remains optimistic with revenue expected between $1.8 billion and $1.85 billion.

Company Performance

Onewater Marine’s Q3 2025 results reflect a challenging yet resilient performance. Despite headwinds in the marine industry, the company achieved a 2% increase in total revenue, reaching $553 million. This growth is attributed to a 2% rise in same-store sales, contrasting with a 15% decline in the broader industry. The company maintains a gross profit margin of 23.7% and generates strong free cash flow, with a yield of 39%. InvestingPro data shows the company’s beta at 1.97, indicating higher volatility than the market. However, gross profit decreased to $129 million from $133 million, and net income fell to $11 million from $17 million in the previous year.

Financial Highlights

• Revenue: $553 million, up 2% year-over-year
• Adjusted EPS: $0.79, down from $1.05 in the previous year
• Gross profit: $129 million, down from $133 million
• Net income: $11 million, compared to $17 million last year

Earnings vs. Forecast

Onewater Marine’s actual EPS of $0.79 was significantly below the forecast of $1.18, resulting in a 33.05% negative surprise. In contrast, revenue surpassed expectations by 3.95%, achieving $553 million against a forecast of $532.01 million. This mixed performance indicates the company’s challenges in managing profitability despite achieving higher sales.

Market Reaction

Following the earnings announcement, Onewater Marine’s stock rose 8.93% in pre-market trading, reaching $14.56. This movement suggests investor optimism despite the EPS miss, likely driven by the revenue beat and positive guidance. The stock remains within its 52-week range, with a low of $11.58 and a high of $26.78, reflecting volatility in the marine sector.

Outlook & Guidance

Onewater Marine has updated its full-year revenue guidance to a range of $1.8 billion to $1.85 billion, with expectations for low single-digit same-store sales growth. Adjusted EBITDA is projected between $65 million and $80 million, while adjusted EPS is forecasted to range from $0.50 to $0.75. The company remains focused on premium boat segments and anticipates moderate price increases for 2026 models.

Executive Commentary

CEO Austin Singleton highlighted the company’s ability to "deliver for our customers, win business, capture market share and outperform the broader industry." President Anthony Asplith emphasized the importance of broad dealership offerings in supporting customer acquisition and retention. CFO Jack Tisel reiterated the priority of reducing leverage in the company’s capital allocation strategy.

Risks and Challenges

• Industry headwinds: The marine industry is experiencing significant declines, posing a challenge to growth.
• Profitability pressures: Declining gross profit and net income indicate ongoing challenges in maintaining margins.
• Tariff uncertainty: Potential impacts on consumer confidence and pricing strategies.
• Inventory management: While inventory levels are down, managing supply chain dynamics remains crucial.
• Market volatility: Fluctuations in stock price reflect broader market and sector uncertainties.

Q&A

During the earnings call, analysts inquired about the impact of tariffs on consumer confidence and the growth in pre-owned boat sales. The company reported an 18% increase in pre-owned sales due to higher trade-ins, highlighting resilience in the premium customer segment. July’s performance was described as encouraging, further supporting the company’s optimistic outlook.

Full transcript - Onewater Marine (ONEW) Q3 2025:

Sergio, Conference Operator: Good morning. My name is Sergio, and I will be your conference operator today. At this time, I would like to welcome everyone to the OneWater Marine, Inc. Fiscal Third Quarter twenty twenty five Conference Call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question and answer session. Thank you. I would now like to turn the conference over to Jack Tisel, Chief Financial Officer. Please go ahead.

Jack Tisel, Chief Financial Officer, OneWater Marine: Good morning, and welcome to OneWater Marine’s fiscal third quarter twenty twenty five earnings conference call. I am joined on the call today by Austin Singleton, Chief Executive Officer and Anthony Asplith, President and Chief Operating Officer. Before we begin, I’d like to remind you that certain statements made by management in this morning’s conference call regarding OneWater Marine and its operations may be considered forward looking statements under securities law and involve a number of risks and uncertainties. As a result, the company cautions you that there are a number of factors, many of which are beyond the company’s control, which could cause actual results and events to differ materially from those described in the forward looking statements. Factors that might affect the future results are discussed in the company’s earnings release, which can be found in the Investor Relations section of the company’s website and in its filings with the SEC.

The company disclaims any obligation or undertaking to update forward looking statements to reflect circumstances or events that occur after the date forward looking statements are made, except as required by law. Please also note that all comparisons of our third quarter twenty twenty five results are made against the third quarter twenty twenty four unless otherwise noted. And with that, I’d like to turn the call over to Austin, who will begin with a few opening remarks. Austin?

Austin Singleton, Chief Executive Officer, OneWater Marine: Thank you all for joining us today. OneWater delivered solid results in the third quarter with total revenue increasing 2% to $553,000,000 Our same store sales also grew by 2% despite the challenging market conditions facing our broader industry, which saw declines in excess of 15% in the categories where we participate. In a highly competitive environment, we continue to deliver for our customers, win business, capture market share and outperform the broader industry. Although May and June are typically peak selling months, the industry saw double digit declines while our strategic positioning and strong execution led to positive results. This resilience highlights our team’s ability to adapt and succeed in a dynamic operating environment.

Gross margins remain under pressure, mainly due to the heightened promotional activity across the industry. The declines also reflect the impact of our strategic brand exits and shifts in new boat model mix. Despite these headwinds, we are being intentional in our pricing strategy, which is aimed at driving sales while preserving margin where we can. Our strategy will continue to adapt to market conditions and we are confident in our current positioning. With all of the tariff uncertainty we saw in the quarter, we are pleased that price increases from our manufacturing partners for model year 2026 have been moderate and are within the normal levels.

Early customer feedback on new models has also been positive. Owners are responding well to the latest innovations and we are excited to continue rolling out these new models in the coming months. Turning to our inventory management initiatives, I am pleased to report on the significant progress we have made year to date in our strategic efforts to optimize the portfolio. Total inventory is down 14% year over year as we continue to prioritize healthy inventory levels. We remain on track to end the fiscal year with inventory down 10% to 15%, a target we had increased last quarter.

Supporting this inventory reduction is our brand rationalization strategy where we are also on schedule to complete the exit of selected brands by the end of the year. This allows us to focus our efforts on our highest performing brands and most profitable relationships strengthening our foundation. As we push towards these inventory goals, we also look to have sufficient inventory to meet anticipated market demand. This balanced approach remains central to our long term strategy, enabling us to capture sales while optimizing our working capital efficiency. As the marine industry continues to face headwinds, we are centered on three key areas.

First, working towards a healthy inventory of high performing brands and completing our brand rationalization strategy second, executing disciplined cost management as we monitor the changing retail environment and third, leveraging our scale and operational expertise to continue outperforming broader industry trends. Looking ahead, we are confident in our long term positioning. We have built a flexible operating model with diverse revenue streams, including our growing pre owned boat sales and our resilient reoccurring revenue businesses. Our teams are working hard to close deals and we are managing factors within our control. With that, I will turn it over to Anthony to discuss business operations.

Anthony Asplith, President and Chief Operating Officer, OneWater Marine: Thank you, Austin. Traffic at the dealership level remained steady during the quarter, which is encouraging given the broader industry headwinds. While the customer purchase cycle has normalized post COVID, tariff uncertainty continues to raise questions in the mind of some boaters. However, customers are actively visiting our dealerships and are shopping for their next boat. Our sales teams remain proactive, working hard to convert interest into sales.

Although new boat unit sales declined year over year, the average selling price increased highlighting continued strength in the premium segment. Pre owned boat sales grew for the third consecutive quarter driven by higher volume and average unit price more than offsetting the decline in new boat sales. As we’ve noted in recent quarters, customers are trading in and trading up as availability in the pre owned market continues to improve. We’re encouraged to see buyers moving into new categories and larger boats. While the strength in higher value units across both new and pre owned sales add some pressure on margins, it’s a healthy level of churn and a positive indicator for the business.

Finance and insurance revenue was in line with prior year as we maintained healthy penetration rates across our product offerings. Our F and I team continues to execute leveraging our competitive suite of financial products and services to meet customer needs. In our parts and service businesses, revenue declined 2% compared to the prior year period. Our distribution segment remains challenged by lower product levels from boat manufacturers. However, our dealership service and parts and other sales remain resilient.

Our broad dealership offerings remain a key differentiator, supporting our customers’ acquisition and retention as more boaters seek a one stop shop experience. Thanks to our prior investments in business and technical expertise, we are well positioned to meet customer needs. Our parts and service businesses remain a core pillar of our business model. I’d like to turn the call over to Jack now to discuss the financials.

Jack Tisel, Chief Financial Officer, OneWater Marine: Thanks, Anthony. Fiscal third quarter revenue increased 2% to $553,000,000 in 2025 from $542,000,000 in the prior year. New boat sales were down 2% to $326,000,000 in the third quarter, while pre owned boat sales increased 18% to $126,000,000 Overall, same store sales were up 2% against an industry backdrop that SSI data showed was down in excess of 15% in the categories which we compete. Revenue from service parts and other sales for the quarter decreased 2% to $83,000,000 The decrease was driven by lower production from boat manufacturers, which continued to weigh on sales in our Distribution segment, partially offset by growth in our Dealership segment. Finance and Insurance revenue remained flat as a percentage of sales as customers continue to finance a portion of their purchase through our programs.

Gross profit declined to $129,000,000 in 2025 compared to $133,000,000 in the prior year. This was primarily due to lower new boat volumes, product mix and the promotional environment. Third quarter twenty twenty five selling, general and administrative expenses increased 6% to $92,000,000 SG and A as a percentage of sales was 17%, up 70 basis points as the benefits from our previous cost reduction actions were more than offset by higher personnel and selling expenses to drive sales in addition to other inflationary pressures given the current operating environment. Operating income decreased to $30,000,000 and adjusted EBITDA was 33,000,000 Net income for the fiscal third quarter totaled $11,000,000 or $0.65 per diluted share compared to net income of $17,000,000 or $0.99 per diluted share in the prior year. Adjusted earnings per diluted share was $0.79 compared to adjusted earnings per diluted share of $1.05 in the prior year.

Turning now to the balance sheet. On June 30, total liquidity was in excess of 85,000,000 including cash on hand and additional availability under our credit facilities. Total inventory on 06/30/2025 decreased to $517,000,000 compared to $599,000,000 on 06/30/2024. This decline reflects our ongoing strategic inventory positioning and brand rationalizations throughout the year. Total long term debt as of 06/30/2025 was $419,000,000 and net of cash resulted in a net leverage of 5.8 times trailing twelve months adjusted EBITDA.

As we move forward, reducing leverage remains a priority in our capital allocation strategy. Based on our performance through the third quarter and current market conditions, we are updating our full year guidance. For fiscal year twenty twenty five, we are raising our total revenue outlook to be in the range of $1,800,000,000 to $1,850,000,000 and now anticipate same store sales to be up in the low single digits for the year despite an industry that’s expected to show double digit declines. We now expect adjusted EBITDA to be in the range of 65,000,000 to $80,000,000 and adjusted earnings per diluted share to be in the range of $0.50

Sergio, Conference Operator: to $0.75

Jack Tisel, Chief Financial Officer, OneWater Marine: Our outlook considers several key factors, including persistent macroeconomic uncertainty and a competitive selling environment that continues to pressure margins. While we continue to manage through these headwinds, we are progressing well in our inventory management strategy and are cautiously optimistic given the additional clarity on tariff impacts. July’s performance has been encouraging and remain focused on the disciplined execution as we close out the year. This concludes our prepared remarks. Operator, we open the line for questions.

Sergio, Conference Operator: Thank you. Your first question comes from the line of Greg Ganison from Baird. Please go ahead.

Greg Ganison, Analyst, Baird: To double click on the tariff noise and the market correction, just some of the macro factors that hit in the quarter. Have you seen any change in behavior as maybe there’s clarity on tax policy, clarity on tariff policy to some extent and the market’s back?

Austin Singleton, Chief Executive Officer, OneWater Marine: Jack, I want you to take

Anthony Asplith, President and Chief Operating Officer, OneWater Marine: that one.

Jack Tisel, Chief Financial Officer, OneWater Marine: Yeah. I I wouldn’t say you know, during the quarter, I wouldn’t say we we got a lot of that clarity. I think a lot of during the quarter, there was more, more confusion, more, a lot of noise in and around that. I’d say subsequent to the quarter, it feels like you’re seeing a little less concerned about the tariff, the tariff impacts. We certainly are relieved that we finally worked through our manufacturers, worked through new model year.

We’re seeing the price increase coming in that low mid single digits, which is kind of I’ll say, a normal price increase. And and so I think that that’s settling with the customer. I think that, you know, the customer the like we said, July results were positive, and and we’ll just have to wait a little while longer to see if that’s a trend that continues.

Austin Singleton, Chief Executive Officer, OneWater Marine: Yeah. But I just want to add to that real quick, Craig. Craig, just to add to that, just like what Jack was saying, you know, the trend probably during the quarter was was just not something that you could really pick up on, but you definitely could feel it going into July. July was a good month. And so we’ve not been really concerned with the tariff issues as far as the pricing of the boats.

It’s more of what the tariff and the what it’s doing to consumer confidence and where that leads. I would tell you that it seems like the premium customer where we operate mostly in is pretty resilient and this extra clarity that’s kind of coming about showed through in July. Now we just got to hope that trend continues.

Greg Ganison, Analyst, Baird: Great. If I could ask on used, mean 18% growth is surprisingly strong. Is that a function of better access to supply? Or is there a trade down effect that I’m missing on?

Austin Singleton, Chief Executive Officer, OneWater Marine: Yes. It’s not a trade down effect. It’s really just more people coming in that are trading their boats in. I think our Anthony can jump in. I think the trade ins are just higher today than they were six months ago than they were twelve months ago.

And it’s really because there’s an adequate amount of field inventory out there, so the consumer doesn’t have these huge lead times or lags when they come in to get a new boat and have the time to really sell it on their own. Would say, we’re being super aggressive like we always have been on purchasing boats outright, but it’s really just a function of more people are trading in today versus selling it on their own than they were six, eight, you know, twelve months ago. Anthony, you wanna add to that or that pretty

Anthony Asplith, President and Chief Operating Officer, OneWater Marine: much it? Yeah. That pretty much covers it.

Jack Tisel, Chief Financial Officer, OneWater Marine: Well, I I think the only thing I’d add is I’d add is, right, it’s it’s a continued focus of the business. Right? We have used both standalone stores. It it is a priority of the company to, you know, invest in that that category. And so I think we’ll we’ll continue to see, you know, outpaced results as we’re we’re focusing on it.

Greg Ganison, Analyst, Baird: And when you say trade ins, are they trading in and then buying another boat at the same ratio as always? Or is this a and then and is there an increase in people trading in but not replacing?

Austin Singleton, Chief Executive Officer, OneWater Marine: Well, you can’t really we don’t really you know, a trade in would be if you you purchased a new boat. It’d be an outright purchase. So it’s it’s it’s trade in and upgrading. And I think that’s why you saw a little bit of a skew in the model mix to larger boats. You you know, most people are, especially in that premium space, they’re upgrading to bigger stuff.

So, you know, there’s a trickle down effect. You know? If and and just to be if you buy a 40 foot boat, you’re usually trading in this is just an example, a 30 foot boat. So that 30 foot boat sells pre owned to somebody that’s usually trading in a 28 foot boat and then a twenty six week picked up more in that trickle down trade in effect because the boats are skewing higher on the new sale.

Greg Ganison, Analyst, Baird: Got it. Great. Thank you.

Jack Tisel, Chief Financial Officer, OneWater Marine: Thanks, Greg.

Sergio, Conference Operator: Thank you.

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