MasterCraft Boat Holdings experienced a notable decrease in their net sales, falling nearly 30% to $63.4 million in the second quarter of fiscal 2025, which concluded on December 29, 2024. This represents a significant drop of $26.4 million compared to the same period in the previous fiscal year.
The company's Adjusted EBITDA also saw a reduction, totaling $3.5 million, a decrease of $9.4 million from last year's figures during the same quarter. The downturn in financial performance was primarily attributed to intended reductions in unit volumes, which led to lower inventories at dealerships and a less favorable mix of models being sold.
This strategic adjustment in production volumes resulted in reduced cost absorption, affecting the company's profit margins. Despite these challenges, Brad Nelson, the CEO of MasterCraft, expressed optimism. He noted that the company had surpassed expectations amid economic pressures and a challenging retail environment. Nelson highlighted the positive reception of their new ultra-premium XStar models during the early boat show season, which he believes will drive momentum heading into the peak summer sales period.
Despite a tough quarter, income from continuing operations stood at $0.4 million compared to $8.7 million in the prior year. The Adjusted EBITDA margin also saw a decrease, coming in at 5.6% down from 14.4% year-over-year.
Looking ahead, MasterCraft has adjusted its full-year fiscal 2025 projections, now anticipating net sales to range between $275 million and $295 million, with Adjusted EBITDA expected to fall between $19 million and $24 million. The forecast for the fiscal third quarter includes estimated consolidated net sales of about $75 million and an Adjusted EBITDA of around $5 million.
Nelson remains cautious yet optimistic about the future, citing the successful launch of the XStar and a revised production strategy. He also acknowledged the ongoing uncertainty surrounding trade policies and their potential impact on the broader economy, indicating that MasterCraft is preparing for various industry and economic conditions.
The continued focus on strategic product launches and operational adjustments reflects MasterCraft's efforts to navigate a turbulent market while positioning itself for recovery and growth in the competitive boating industry.
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