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MasterCraft Boat Holdings (NASDAQ:MCFT) is on watch after posting a better-than-feared FQ2 earnings report. Revenue fell 37.5% year-over-year to $99.5M and EPS was down 68% from last year's level, but both marks were ahead of the consensus expectation. Adjusted EBITDA was $9.8M during the quarter vs. $29.8M a year ago.
Gross margin as a percentage of sales declined 520 basis points during the quarter Lower margins were the result of lower cost absorption due to planned decreased sales volume, higher dealer incentives, and higher costs related to material, labor and overhead inflation, partially offset by higher prices.
The boat manufacturer said continuing macroeconomic uncertainty and a highly competitive retail environment impacted results. "Near-term, we remain focused on rebalancing dealer inventories with anticipated retail demand," stated CEO Fred Brightbill.
"As we anticipate moving beyond inventory rebalancing, we are prudently investing in targeted initiatives that will take advantage of the industry’s positive, underlying secular trends and accelerate our growth. Soon we will be launching a new pontoon brand built in our Crest facility. This new brand is an example of why we are confident in our ability to deliver long-term growth for our shareholders."
Looking ahead, MasterCraft (MCFT) sees Q3 revenue of $92M vs. $102M consensus and EPS of $0.23 vs. $0.44 consensus. Q3 adjusted EBITDA of $7M is anticipated vs. $12M consensus, For the full year, MasterCraft (MCFT) expects revenue of $400M to $412M vs. $412M consensus and EPS of $1.53 to $1.78 vs. $1.68 consensus.
Shares of MasterCraft (MCFT) tracked 0.35% lower in premarket trading on Wednesday to $20.06 vs. the 52-week range of $19.22 to $35.29.