Malibu Boats maintains FY26 sales outlook amid soft marine retail environment and strong Q1 innovation rollout

Earnings Call Insights: Malibu Boats, Inc. (MBUU) Q1 2026

MANAGEMENT VIEW

* Steve Menneto, CEO, reported "a solid start to the fiscal year with revenue growth above our expectations despite what remains a soft retail backdrop." Net sales increased approximately 13% year-over-year, and adjusted EBITDA margins were in line with plan. Menneto emphasized disciplined management of dealer health and channel inventories, noting, "Our dealers are healthy, our brands are strong, and we have conviction in the mid-cycle outperformance opportunities."
* Menneto outlined strategic progress, highlighting the launch of MBI Acceptance, a new financing partnership for dealers. He stated, "Early feedback from our financing partner has been extremely positive, describing MBI Acceptance as one of the strongest programs they have seen, noting exceptional dealer engagement and early success in the rollout."
* The CEO showcased new product launches, including the Malibu 21 LX, X-axis A200, Cobalt R31 outboard, and the debut of the Pathfinder 2600, all receiving positive feedback. Pursuit was recognized for the National Boating Safety Award, highlighting Malibu's leadership in owner education and safety.
* Menneto concluded, "We are maintaining our full-year guidance and remain confident in our ability to outperform the market while continuing to build for the next up cycle."
* CFO Bruce Beckman stated, "Net sales increased 13.5% to $194.7 million, and unit volume increased 10.3% to 1,129 units." He explained, "Gross profit decreased 1% to $27.9 million, and gross margin as a percent of sales was 14.3%. This represents a decrease of 210 basis points compared to the prior year period."

OUTLOOK

* Beckman reiterated, "We continue to anchor our outlook with the expectation that our markets will decline in the range of mid- to high single digits for the year, with a continuation of the high single-digit to low double-digit decline through the second quarter."
* The company maintained its fiscal year 2026 guidance, expecting sales to be flat to down mid-single-digit percentage points. For Q2, sales are expected between $175 million to $185 million, with adjusted EBITDA margins ranging from 3% to 5%. Full-year adjusted EBITDA margin guidance remains 8% to 9%.
* Menneto reaffirmed, "Our focus remains unchanged: protect dealer health, manage production with precision, and continue to push the pace of innovation and execute on our strategic growth priorities."

FINANCIAL RESULTS

* Beckman reported, "Net sales increased 13.5% to $194.7 million, and unit volume increased 10.3% to 1,129 units."
* The Malibu and Axis brands represented approximately 47.7% of unit sales, Saltwater Fishing 25.5%, and Cobalt 26.8%.
* Consolidated net sales per unit increased 2.9% to $172,500 per unit.
* Gross profit fell to $27.9 million, with gross margin at 14.3%. Selling and marketing expenses increased by $1.4 million, while general and administrative expenses decreased 23.8% or $6.5 million.
* GAAP net loss for the quarter was ($700,000), while adjusted EBITDA rose 19.1% to $11.8 million. Adjusted net income per share was $0.15.
* Free cash flow for Q1 was $2.5 million, including $4.3 million in capital expenditures.

Q&A

* Martin Mitela, Raymond James: Asked about interest rates and their effect on consumer sentiment and mix. Menneto responded, "Consumer gets encouraged, the dealer gets encouraged. But when you're looking at what will it do to retail finance rates, that will take a little bit of time to manifest itself into the marketplace."
* Mitela also queried higher dealer incentives for the Malibu brand. Beckman explained, "We expect it to continue to be a competitive promotional environment, but not anything like we've seen here recently."
* Kevin Condon, Robert W. Baird: Asked about inventory management and retail decline shape. Beckman stated, "We're expecting the markets to be down, and we're going to pace our production kind of in line with those expectations."
* Anna Glaessgen, B. Riley: Requested details on Q2 margin and inventory balancing. Beckman noted, "There's a modest amount of deleverage that you can expect, and that's embedded in that guidance."
* Eric Wold, Texas Capital: Inquired about the MBI Acceptance rollout and discounting. Menneto said, "We're excited about the overall adoption from our dealer base." Beckman added, "It remains competitive. I mean it is still a soft retail environment."
* Noah Zatzkin, KeyBanc: Sought color on ASPs and M&A strategy. Beckman pointed to "modest year-over-year price increases," while Menneto confirmed, "No changes on that front to announce there."
* Jaime Katz, Morningstar: Probed expense leverage and gross margin resilience. Beckman highlighted, "To get real leverage, you have to see the markets turn… we are expecting higher margins in the second half embedded in our guidance."
* Michael Albanese, Benchmark: Asked about consumer behavior. Menneto responded, "No change from what we were talking about earlier about where that cash buyer, payment buyer dynamic has landed over the last few quarters."

SENTIMENT ANALYSIS

* Analysts pressed on inventory, promotional activity, and the impact of interest rates, reflecting a slightly negative to neutral sentiment as they sought clarity on margin pressures and consumer trends.
* Management maintained a confident and realistic tone, often referencing discipline and readiness—"We remain focused on working closely with our dealer partners to support rightsized inventory levels," and "We are confident in our ability to deliver on our strategic objectives."
* Compared to the previous quarter, management’s tone was similarly pragmatic and forward-looking, though current sentiment reflected slightly more optimism in the adoption of new financing programs and product launches.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language and market expectations were consistent with the previous quarter, reiterating a mid- to high-single-digit market decline and flat to down sales outlook.
* Strategic focus remained on dealer health, inventory alignment, and innovation, with the new MBI Acceptance program as a notable addition.
* Analysts again focused on inventory, dealer incentives, and margin resilience, but current discussion included more detail on early results from new financing initiatives.
* Key metrics changed: net sales and unit volumes were lower than in Q4 2025, gross margin declined, and adjusted EBITDA margin increased slightly compared to Q1 of the previous year.
* Management’s confidence in innovation and retail tools was more pronounced this quarter, while analysts continued to express caution.

RISKS AND CONCERNS

* Management cited continued softness in retail demand and elevated inventories entering the quarter.
* Increased unit labor and material costs, along with higher dealer incentive costs, pressured gross margins.
* Tariff-related cost headwinds of 1.5% to 3% of cost of sales were incorporated into guidance, with active mitigation strategies through supply chain management and vertical integration.
* Analysts raised concerns about the competitive promotional environment, the timing and impact of interest rate changes, and the outlook for margin leverage in a declining market.

FINAL TAKEAWAY

Malibu Boats, Inc. delivered a solid first quarter with revenue growth above expectations and maintained its fiscal 2026 guidance despite ongoing softness in the marine retail environment. The company highlighted continued innovation, disciplined management of dealer health, and early positive adoption of its new MBI Acceptance financing platform. Management remains committed to navigating near-term market headwinds and is confident in its strategic positioning for future growth as market conditions improve.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/mbuu/earnings/transcripts]

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