Yahoo Finance OneWater (NASDAQ:ONEW) Misses Q2 Revenue Estimates, Stock Drops 14.6%
Boat and marine products retailer OneWater Marine (NASDAQ:ONEW) missed analysts' expectations in Q2 CY2024, with revenue down 8.7% year on year to $542.4 million. It made a non-GAAP profit of $1.05 per share, down from its profit of $1.95 per share in the same quarter last year.
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OneWater (ONEW) Q2 CY2024 Highlights:
Revenue: $542.4 million vs analyst estimates of $611 million (11.2% miss)
EPS (non-GAAP): $1.05 vs analyst estimates of $2.17 (51.6% miss)
Gross Margin (GAAP): 24.4%, down from 26.8% in the same quarter last year
Locations: 98 at quarter end, down from 99.5 in the same quarter last year
Market Capitalization: $444.5 million
“In the third quarter, our strategic inventory management and operational execution drove outperformance against the industry. However, our performance for the quarter was below our expectations due to a progressively weaker market environment and a negative impact from weather in Texas,” commented Austin Singleton, Chief Executive Officer at OneWater.
A public company since early 2020, OneWater Marine (NASDAQ:ONEW) sells boats, yachts, and other marine products.
Boat & Marine Retailer
Retailers that sell boats and marine products sell products, sure, but they also sell an image and lifestyle to an often wealthier customer. Unlike a car–which many use daily to get to/from work and to run personal and family errands–a boat or yacht is certainly a discretionary, luxury, nice-to-have purchase. While there is online competition, especially for research and discovery, the boat and yacht market is still very brick-and-mortar based given the magnitude of the purchase and the logistical costs associated with moving these products over long distances.
Sales Growth
OneWater is a small retailer, which sometimes brings disadvantages compared to larger competitors that benefit from economies of scale. On the other hand, one advantage is that its growth rates can be higher because it's growing off a small base.
As you can see below, the company's annualized revenue growth rate of 20.8% over the last five years was exceptional as it added more brick-and-mortar locations and increased sales at existing, established stores.
This quarter, OneWater missed Wall Street's estimates and reported a rather uninspiring 8.7% year-on-year revenue decline, generating $542.4 million in revenue. Looking ahead, Wall Street expects sales to grow 7.1% over the next 12 months, an acceleration from this quarter.
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Key Takeaways from OneWater's Q2 Results
We struggled to find many strong positives in these results. Its revenue and EPS missed analysts' expectations and its full-year earnings forecast fell short of Wall Street's estimates. Overall, this quarter could have been better. The stock traded down 14.6% to $25.89 immediately after reporting.
OneWater 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.
