The marine industry is “attracting and adding a new foundational layer of customers to the boating lifestyle” during the Covid-19 pandemic, in part driving same-store sales at MarineMax to jump 37 percent in the third quarter.
That’s according to MarineMax president and CEO Brett McGill, who told investors and analysts on a call to discuss third-quarter earnings that same-store sales growth was fueled by a unit increase.
Net income for the quarter grew more than 83 percent to almost $35 million — compared to just over $19 million in the third quarter last year — and earnings per diluted share grew more than 88 percent to $1.58, versus $0.84 last year.
Since so many fall boat shows have been cancelled, MarineMax has been putting efforts into making sure the company comes out “unscathed,” said McGill.
“We're redirecting those funds towards other digital marketing efforts which are clearly paying off,” said McGill.
“The need for these boat shows like we did in the past, this may be a little something that kicks this into gear, where the amount of shows and expenditures needed for those shows may lesson altogether,” added McGill. “It could be good for our industry.”
MarineMax typically spends “double-digit millions of dollars” on boat shows, said CFO Mike McLamb.
“We don’t know exactly how that’s going to play out next year, [but] that could be another opportunity for additional leverage,” McLamb said.
The company is actively pursuing acquisitions in spaces including dealerships, technology, and services, said McGill.
“All of those areas are actually active right now, and there’s a lot of interest, and we’re looking at all those categories,” said McGill. “We’ve stated that we want to focus on our higher-margin businesses; there are opportunities out there, and we’re looking at it.”
MarineMax said it was better positioned than many dealers that are challenged to get new boats in stock to sell amid a nationwide buying frenzy because it could share boats among its 59 locations.
“The deep manufacturing relationships … is pretty powerful, and we’ve been working with our manufacturers week in, week out, and we really feel like they’re able to give us the product we need in a pretty darn timely manner,” said McGill. “Yes, inventory’s lower, it’s lean, but our team is trained to sell ordered boats, and with the scale and brands we have across the stores, it allows to sell somebody the ordered boats, where it may take other dealers six to eight weeks to get, it will take us one or two weeks, because we have inventory coming in to different regions.”
“We also have $314 million in inventory, so it’s not like we have zero,” added McLamb. “We have products and we are selling products.”
McLamb predicted it would take the industry a year to fully rebuild the depleted boat supply.
“The turns will be higher in the industry, for sure, all the way through from probably a year from now, as manufacturers begin to ramp up and as seasonality kicks in; we’ll rebuild but it will probably take all the way through this time next year.”