Malibu Boats experienced a challenging second quarter, as reflected by a significant negative market reaction following its earnings release. While the company surpassed Wall Street’s revenue expectations, management cited persistent macroeconomic uncertainty and elevated dealer inventory as primary obstacles. CEO Steven Menneto described the retail environment as "difficult" and highlighted that both consumer sentiment and ongoing trade policy changes contributed to a softer industry backdrop. Management acknowledged that its proactive inventory adjustments in prior periods provided some buffer, but noted continued discipline is needed to maintain dealer health going forward.
Is now the time to buy MBUU? Find out in our full research report (it’s free).
Malibu Boats (MBUU) Q2 CY2025 Highlights:
- Revenue: $207 million vs analyst estimates of $196.4 million (30.4% year-on-year growth, 5.4% beat)
- Adjusted EPS: $0.42 vs analyst expectations of $0.46 (9.4% miss)
- Adjusted EBITDA: $19.66 million vs analyst estimates of $21.32 million (9.5% margin, 7.8% miss)
- Operating Margin: 3.3%, up from -15.4% in the same quarter last year
- Boats Sold: 1,221, up 176 year on year
- Market Capitalization: $610.8 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Malibu Boats’s Q2 Earnings Call
- Martin (Raymond James) asked for clarification on inventory levels and expected destocking. CFO Bruce Beckman replied that modest excess inventory exists across all segments and that dealer health remains a focus in the coming year.
- Eric Christian Wold (Texas Capital Securities) questioned whether guidance assumes interest rate cuts and what effect lower rates might have on promotions. CEO Steven Menneto confirmed no rate cuts are assumed, and said rate relief could provide a tailwind for demand during the upcoming boat show season.
- Craig R. Kennison (Baird) inquired about the retail outlook and inventory adjustments. Menneto and Beckman said the outlook reflects “more of the same,” with retail and inventory reductions expected to continue until a market inflection occurs.
- Noah Seth Zatzkin (KeyBanc Capital Markets) asked about dealer health and industry inventory levels. Menneto indicated Malibu’s dealers are generally healthy but acknowledged pockets of elevated inventory; Beckman noted Malibu’s noncurrent inventory is in a better spot than the broader industry.
- Jaime M. Katz (Morningstar) requested a sensitivity analysis on EBITDA margin recovery and CapEx plans. Beckman explained that market stabilization and reduced destocking are key to margin improvement, while CapEx will remain at normalized post-expansion levels.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will focus on (1) the pace of dealer inventory normalization and whether further destocking is needed, (2) the impact of tariff-related cost increases and Malibu Boats’ ability to offset these through pricing and supply chain efficiencies, and (3) the market response to newly launched boat models. Additionally, any shift in consumer financing conditions or inflection in retail demand could alter the company’s trajectory.
Malibu Boats currently trades at $31.38, down from $39.58 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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