OneWater Marine's Q1 2025 Earnings Call: A Deep Dive into Conflicting Inventory and Margin Insights

These are the key contradictions discussed in OneWater Marine's latest 2025 Q1 earnings call, specifically including: Inventory Levels and Market Conditions, Inventory Levels and Production Expectations, and Gross Margin Expectations:



Strong Sales Performance and Industry Outperformance:
- OneWater Marine reported a 3% increase in revenue to $376 million in Q1, with new boat sales up 3% to $248 million and pre-owned sales increasing 7% to $57 million.
- The company’s same-store sales were up 4%.
- This performance was driven by a low double-digit increase in new unit sales that significantly outpaced the industry, despite exiting certain brands.

Inventory Management and Cost Reduction:
- Inventory levels were down 10% year-over-year, with a target to reduce inventory by over 10% by September 2025.
- Selling, general, and administrative expenses declined on both a dollar basis and as a percentage of total revenue.
- These improvements were due to deliberate actions to optimize inventory and ongoing cost reduction initiatives.

Financial and Insurance Performance:
- Finance and insurance revenue increased 28% to $9 million, contributing positively to total boat sales.
- The increase in finance penetration was attributed to concerted efforts by the team and competitive pricing strategies.

Market Dynamics and Outlook:
- The company reaffirmed its guidance for 2025 despite challenging industry conditions in 2024.
- The optimism is based on the expectation that inventory clean-up efforts will lead to improved margins and operational efficiency.
- Projections remain cautiously optimistic given the ongoing inventory management and cost control strategies.