My recent article about MarineMax
On the positive side, revenue reached $124.4 million, a sequential quarterly increase. On the negative side, that same revenue sank 40% year over year. On the conference call, CEO Bill McGill explained, "We keep hearing from prospective buyers that they are hesitant to make a major purchase until they gain more confidence that the economy is improving." The company still lost $1.8 million in the quarter, but that was much better than the $33 million loss a year ago.
That says it all. The difficulty of being a luxury retailer is that when the economy tanks, so does your business. There is a silver lining to the storm clouds, however. As part of the company's turnaround plan to focus on higher-margin aspects of the business, gross margins were 24.2%, compared to 6.1% last year. And while many customers are holding off making those big boat purchases, a few hardy seafolk took the plunge anyway.
There are other hopeful signs. MarineMax's promotional events have been filled to capacity, suggesting plenty of interested boaters who will likely become future customers. The company also kept a lid on operating expenses, cutting them by nearly one-third to $31.4 million year over year.
I think it's only a matter of time before MarineMax enjoys some tailwinds again. The broader luxury category has seen a sharp rebound, and that will slowly work its way up to higher-priced items such as boats. With quarterly earnings up 19% at luxury retailers like Tiffany & Co.
After that, it should be ... OK, I'll say it ... smooth sailing.
