Malibu Earnings: Sequential Improvement Provides Glimmer of Hope That Boat Market Has Bottomed

Shares of narrow-moat Malibu Boats bounced on Oct. 31 as investors responded positively to the firm’s sequential improvement. Sales in the fiscal 2025 first quarter fell 33%, much better than the 57% downtick in the prior quarter, indicating that inventory reductions are easing on the retail side. Even with massive sales declines, flexibility in the cost structure showed resilience, with gross margin (16.4%) and adjusted EBITDA margin (5.8%) up around 850 basis points over last quarter. While these metrics are far from the mid-20s gross margin and midteens EBITDA margin we’d expect Malibu to capture in a normal environment, they are directionally favorable, providing hope that the worst of the boating downturn is behind us. We saw positivity in pricing and market share despite a unit shipment decline of 40% (improved from 59% sequentially). Average selling prices rose 11% helped by mix, with Malibu prices up 12%, Cobalt prices up 3%, and saltwater up 14%. And market share grew, with Cobalt grabbing 200 basis points of sterndrive share while Pathfinder gained 400 basis points of share over the last 12 months.