Tuesday, January 23, 2018
Business

Clearwater's MarineMax sees smooth sailing at last for boating business thanks to upscale customers

Recovery ahoy?

Top executives of the nation's largest recreational boat retailer, Clearwater-based MarineMax, delivered a bullish outlook Tuesday for the company and the boating industry after the company posted strong sales gains in its stores for the second year in a row. CEO Bill McGill predicted even better performance ahead in 2017 as boat manufacturers that had been cocooned during the downturn finally unleash an armada of new designs — just in time to meet the pent-up demand of upscale consumers eager to get back on the water in style.

"People have the discretionary dollars, and more of it, than they had a few years ago," McGill said. "And they are spending it."

MarineMax's fiscal fourth-quarter revenues rose to $227 million, up from $189 million a year earlier. Annual revenues topped $942 million, up from $751 million last year and more than double company revenues in 2011 when MarineMax watched the Great Recession pummel the recreational boating business.

Net income at MarineMax fell in the latest quarter to $5.6 million, down from $32.8 million in 2015's fiscal fourth quarter. Profitability lagged at MarineMax in fiscal 2016, with annual net income hitting only $22.6 million, down sharply from $48.3 million last year.

McGill and Mike McLamb, the company's chief financial officer, told analysts that MarineMax moved a lot of boats, presumably at discounts, in its inventory to be lean and mean for the incoming flood of newly designed 2017 models.

"This year should be much improved," McGill said.

Investors in a nervous stock market, just days before the national election, did not buy MarineMax's upbeat message. Shares fell sharply Tuesday after the company missed its profit forecast. The stock closed at $16.45, down 17.5 percent.

The reaction is not all that surprising. The recession devastated the recreational boating business and the rebound has proved both slow and inconsistent.

While the upper-class buyers of boats can't wait to upgrade "with all the bells and whistles," the same cannot be said of middle-class boaters, the MarineMax executives acknowledged.

"A lot of the middle class is still struggling and in some cases may be underwater" — that's in a financial sense — "with the boat they have," McGill said. "They are not willing to pull the trigger and move to the next boat. That part of the market is soft," with people feeling uncertain about their business, their job or health care costs, he said.

Whether it is their business, their job or health care costs, he said, something is causing them "uncertainty or angst."

Those are not MarineMax's core customers. McGill said those flush with discretionary dollars "more than offset" those customers still feeling pressed. That part of the market is very active and "as strong as I have seen it."

To capitalize on those dollars, McGill and McLamb are heading to this week's Fort Lauderdale International Boat Show, where attendance is expected to be way up. MarineMax is all in — with seven new models and 13 displays.

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

 
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