MarineMax (NYSE:HZO) Q4: Beats On Revenue
Boat and marine products retailer MarineMax (NYSE:HZO) reported Q4 FY2023 results exceeding Wall Street analysts' expectations , with revenue up 10.8% year on year to $594.6 million. Turning to EPS, MarineMax made a GAAP profit of $0.67 per share, down from its profit of $1.72 per share in the same quarter last year.
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MarineMax (HZO) Q4 FY2023 Highlights:
Revenue: $594.6 million vs analyst estimates of $532.7 million (11.6% beat)
EPS: $0.67 vs analyst expectations of $0.69 (2.49% miss)
Gross Margin (GAAP): 34.3%, down from 36.7% in the same quarter last year
Same-Store Sales were up 8% year on year
Store Locations: 130 at quarter end, increasing by 10 over the last 12 months
“Our strong close to fiscal year 2023 stands as a testament to the exceptional performance of our team,” stated MarineMax 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. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 18% over the last four years (we compare to 2019 to normalize for COVID-19 impacts) was excellent as it added more brick-and-mortar locations and increased sales at existing, established stores.
This quarter, MarineMax reported robust year-on-year revenue growth of 10.8% and its revenue of $594.6 million exceeded analysts' estimates by 11.6%. Looking ahead, Wall Street expects revenue to decline 4.18% over the next 12 months.
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Number of Stores
When a retailer like MarineMax is opening new stores, it usually means it's investing for growth because demand is greater than supply. Since last year, MarineMax's store count increased by 10 locations, or 8.33%, to 130 total retail locations in the most recently reported quarter.
Over the last two years, the company has rapidly opened new stores, averaging 13.5% annual growth in its physical footprint. This store growth is among the fastest in the consumer retail sector and gives MarineMax a chance to scale towards a mid-sized company over time. With an expanding store base and demand, revenue growth can come from multiple vectors: sales from new stores, sales from e-commerce, or increased foot traffic and higher sales per customer at existing stores.
Same-Store Sales
Same-store sales growth is a key performance indicator used to measure organic growth and demand for retailers.
MarineMax has generated solid demand for its products over the last two years. On average, the company's same-store sales have grown by a healthy 12.1% year on year. This performance gives it the confidence to rapidly expand its store count. When a company has strong demand, more locations should help it reach more customers seeking its products and boost revenue growth.
In the latest quarter, MarineMax's same-store sales rose 8% year on year. This growth was a deceleration from the 11% year-on-year increase it posted 12 months ago, showing the business is still performing well but lost a bit of steam.
Key Takeaways from MarineMax's Q4 Results
With a market capitalization of $629.5 million and more than $201.5 million in cash on hand, MarineMax can continue prioritizing growth.
We were impressed by how significantly MarineMax blew past analysts' revenue expectations this quarter. That really stood out as a positive in these results. On the other hand, its earnings per share sadly missed analysts' expectations. Overall, the results could have been better. The stock is flat after reporting and currently trades at $28.5 per share.
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.
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The author has no position in any of the stocks mentioned in this report.
