Malibu Boats (NASDAQ:MBUU) Posts Better-Than-Expected Sales In Q2

Recreational boats manufacturer Malibu Boats (NASDAQ:MBUU) reported Q2 CY2024 results topping analysts’ expectations, with revenue down 57.4% year on year to $158.7 million. It made a non-GAAP loss of $0.39 per share, improving from its loss of $0.82 per share in the same quarter last year.

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“As the new CEO of Malibu Boats, I am committed to our goal of navigating the near-term headwinds while enhancing our roadmap for strategic growth. I am excited about the opportunity to continue our presence as the premier manufacturer of recreational powerboats. Our focus on developing premium products for all our brands remains unwavering as we introduce our new Model Year 2025 lineup,” commented Steve Menneto, Chief Executive Officer of Malibu Boats.

Founded in California in 1982, Malibu Boats (NASDAQ:MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.

Leisure Products

Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.

Sales Growth

Reviewing a company’s long-term performance can reveal insights into its business quality. Any business can have short-term success, but a top-tier one tends to sustain growth for years. Regrettably, Malibu Boats’s sales grew at a weak 3.9% compounded annual growth rate over the last five years. This shows it failed to expand in any major way and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or emerging trend. Malibu Boats’s history shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 17.4% annually.

This quarter, Malibu Boats’s revenue fell 57.4% year on year to $158.7 million but beat Wall Street’s estimates by 1.1%. Looking ahead, Wall Street expects sales to grow 10.5% over the next 12 months, an acceleration from this quarter.

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Operating Margin

Malibu Boats’s operating margin has shrunk over the last year and averaged 4%. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

In Q2, Malibu Boats generated an operating profit margin of negative 15.4%, down 9.3 percentage points year on year. This contraction shows it was recently less efficient because its expenses increased relative to its revenue.

Key Takeaways from Malibu Boats’s Q2 Results

It was encouraging to see Malibu Boats narrowly top analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock remained flat at $34.84 immediately after reporting.

Malibu Boats may have had a tough quarter, but does that actually create an opportunity to invest 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.