OneWater Marine's Q2 2025 Earnings Call: Navigating Contradictions in Demand, Margins, and M&A Strategy

Demand trends and inventory management, used boat margins and pricing strategy, inventory management and model year 2025 models, mergers and acquisitions appetite are the key contradictions discussed in OneWater Marine's latest 2025Q2 earnings call.



Sales Performance and Market Share:
- OneWater Marine reported a 1% decrease in revenue for the fiscal second quarter 2025, with new boat sales down 5%.
- Despite industry-wide declines in unit sales (exceeding 10%), OneWater Marine outperformed the industry, taking market share.

Inventory Management and Brand Rationalization:
- The company reduced inventory by 12% year-over-year and 5% sequentially, aiming for a full-year reduction of 10% to 15%.
- This was achieved through strategic planning and a strong push to close sales, improving working capital and strengthening the company's long-term position.

Gross Margins and Cost Management:
- Gross profit decreased to $110 million compared to $120 million in the prior year, primarily due to lower gross margins on exiting brands and pricing environments.
- The company is focused on cost savings initiatives and expects further benefits from these actions to offset inflationary pressures.

Tariff Landscape and Demand Outlook:
- OneWater Marine expects no immediate pricing impacts on current inventory but is taking a cautious view on the demand environment due to potential tariff impacts.
- The company is updating its outlook due to uncertainties in the macroeconomic environment, with a focus on controlling factors within its business.

Pre-owned Boat Sales and Financing:
- Pre-owned boat sales increased by 14% to $90 million, supported by higher volumes of trade-ins and trade-ups.
- Financing and insurance revenue showed strength, with penetration slightly up in terms of dollars and percentage of total sales, reflecting high-quality in-store financing programs.