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MarineMax CEO on Q3 earnings, the return of boat shows

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MarineMax President and CEO Brett McGill joins Yahoo Finance Live to discuss the company's latest earnings report and outlook for the boating industry.

Video Transcript

JULIE HYMAN: People bought a lot of boats last quarter. In fact, from MarineMax, sales were up 34% to about $666 million. And earnings per share coming in ahead of estimates, the company reported on Friday. The shares down a little bit this morning.

MarineMax president and CEO, Brett McGill is joining us right now. Brett, it's good to see you again. So talk to me about this last quarter, not just sort of what was driving demand but I'm also curious about deliveries because I know you talked a little bit about how if there was any kind of shortfall in the comparable sales numbers it was because you were a little bit delayed getting some people's boats to them. Talk to us about that.

BRETT MCGILL: Yeah, Julie, thanks for having me on again. And demand is still really good out there. People want to enjoy the boating lifestyle and that's really great to see. But as I indicated before and was our challenge this last quarter was getting the products. And we work with some of the best manufacturers in the world. And they worked hard even with some supply chain constraints to get the boats to us. And our teams turned them around in record time to get customers out on the water but it was definitely a challenge and will continue to be so.

BRIAN SOZZI: Brett, have you made any acquisitions recently?

BRETT MCGILL: Yeah, we sure have. We just made a smaller acquisition up in northern Minnesota, Nisswa Marine, a family business that fits our model of having businesses that are more well-rounded, not just new and used boat sales but ones that have storage, and service, more of a recurring revenue type theme. And so that was one we just recently added.

BRIAN SOZZI: Is your business still in growth mode in 2022? Do you have that visibility? I mean, you're going to be cycling some pretty big numbers.

BRETT MCGILL: Yeah, we were up against some really strong same-store sales this quarter, 37%. We posted 6%, which doesn't feel like a huge leap when you've done 37. However, we're up against another really strong quarter and we do see growth. Again, it's going to come down to timing of when some boats arrive and things like that but we do see revenue growth. And of course, the acquisitions that we've made, the very strategic acquisitions, they'll layer on top of that, of course, to continue to have sales growth overall.

MYLES UDLAND: And then, Brett, maybe just thinking broadly right now about the boat market. And we've seen some dynamics in the auto market with used cars trading at just ridiculously high prices and not seeing the kind of depreciation you would expect. Now the boating market is a lot different, depreciation doesn't quite happen really at all the same way. But how are you seeing the secondary market as an indicator perhaps of what your business could look like over the next several years?

BRETT MCGILL: Well, the used values are doing very well. They're not ridiculously high by any stretch but they're holding very well. And it's making it a very good value proposition for our customers to upgrade to a larger boat. And some of the demand we're seeing is because boaters, they always, when they get into a boat, they always get out there with their family and they say, hey, this would be nice, it would be nice if we could spend the night or bring an extra set of friends along. And so they envision having a larger boat maybe a year or two down the road.

But what we're seeing now is people are saying, hey, we want a boat next summer, let's go ahead and get it ordered now and then we'll be in line. And so that dynamic has shifted, where in the past they maybe waited until the boat show and came and rolled in let's say, in February and bought a boat to have it ready for March or April. So we're seeing a little bit of people being more proactive about making sure their experience on the water is solid.

JULIE HYMAN: Hey, Brett, what's happening with pricing of boats? Are you guys-- have you raised prices, do you feel like you have the flexibility to raise them further? Is the demand giving you that ability right now?

BRETT MCGILL: Demand is very good. So it's favorable towards pricing. I'd say we price our boats to market and the market has come up a little. Discounting is not a strong thing right now. We don't need to supply discounts because inventory is very, very lean, so that's helped us. But we're very cautious about how we price a boat, we don't want it to get out of control.

If the manufacturers are seeing some increase in hard costs into the boat, then we are passing that along to the consumer but right now it's holding up well, and we're trying not to get too far out in front of it. But our margins were a record high this past quarter but some of that is not just pricing, that's on our higher-margin businesses like our superyacht services companies, like Fraser, and Northrop & Johnson that bring in the charter business and some of the services side of things which are much higher margin.

BRIAN SOZZI: Brett, is the big splashy boat show, is that done, is it over, never coming back?

BRETT MCGILL: I think the big splashy boat shows are there, the big Miami, Fort Lauderdale but there used to be a lot of regional shows. And they did a poll and said, hey, what are the main reasons people go to a boat show and it was to have fun. And it doesn't seem to make sense at least in the past to go to a boat show where there's massive crowds.

And so these were very expensive events and I don't think they have the same flair. I think we're going to have a lot less. We need to be smart about them but really what we want to do is less about what [INAUDIBLE] what do consumers need. And there are some big shows they need but there's some shows that they don't anymore. And the internet's brought that a long way, of course.

JULIE HYMAN: We'll just have to have private boat shows, where you just go ride on your friend's boat and decide if you want to buy one for yourself. Brett McGill, MarineMax.

BRETT MCGILL: Absolutely.

JULIE HYMAN: President and CEO. Good to see you. Thank you.