MarineMax bullish on sport cruiser sales

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Sport cruiser sales were significantly up in units for the first quarter at MarineMax.

That’s according to MarineMax CEO Bill McGill, who addressed analysts and investors during a conference call Tuesday announcing earnings for the quarter that ended Dec. 31.

“While the recovery may continue to have its ups and downs, we believe that the next several years should produce more widespread unit growth, especially in the hard-hit sterndrive and inboard segments,” McGill said.

The sport cruiser segment, generally composed of 25- to 35-foot cabin boats, was “up significantly in units” in the first quarter, McGill said.

“The increase that we got in cruisers in the December quarter — you have to preface it [with], it’s a small quarter to begin with — but I recognize that and when I look at it, it’s a meaningful shift in business,” McGill said.

The increase is important for that segment, which until now has been significantly trailing all other segments in the recovery, McGill said.

Cruiser sales in 2012 were down only in single digits for MarineMax, compared with about a 15 percent decline in the overall industry, McGill said.

“It looks like there’s something more there than just a couple of units increasing on top of a small number,” McGill said. “It’s a decent-sized number of last year growing to a significantly bigger number this year, and that trend is continuing into January.”

“It looks like there’s something beginning to percolate there on the cruiser side, which is encouraging,” McGill said.

Sandy

Hurricane Sandy was also a big topic during Tuesday’s conference call.

“Geographically, Florida was clearly the strongest market, but most other markets were up, as well,” MarineMax CFO Mike McLamb said. “The Northeast market from Baltimore to Connecticut saw its boat revenue decline more than 9 percent, which gives some sense of the storm’s impact.”

Excluding the Northeast, same-store sales growth was up about 12 or 13 percent, McGill said.

The storm required most Northeastern stores to shut down to prepare for the storm, and then most had to clean up to get the stores back to a functional state, McGill said.

“In the hardest-hit areas, our team then turned their attention to finding and recovering customer boats, all while tending to their own personal challenges that the storm caused,” McGill said, referring to the 10 employees who lost homes and the four large facilities that suffered significant damage.

“There is no question that the effects of this storm in the respective communities still linger, and the recovery will take additional time as homes and property damage are repaired,” McGill said. “However, our expectations are that these stores will be completely ready for business as we enter the busiest season for boat sales.”

Most of the damage is insurable, but there are “costs that we have incurred either through idle or insufficient payroll dollars or soft costs associated with the storm preparation and recovery that ran through our P&L in the December quarter,” he said.

Although the storm clearly impacted revenue in the Northeast, it is hard to quantify the full magnitude. “Besides the lost traffic at our stores, we did have deal-cancellation delays until customers can get their businesses, homes and docks restored,” McGill said.

Click here to listen to the conference call.

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