Boat and marine products retailer OneWater Marine (NASDAQ: ONEW) beat Wall Street’s revenue expectations in Q2 CY2025, with sales up 1.9% year on year to $552.9 million. The company’s full-year revenue guidance of $1.83 billion at the midpoint came in 3.2% above analysts’ estimates. Its non-GAAP profit of $0.79 per share was 25.3% below analysts’ consensus estimates.
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OneWater (ONEW) Q2 CY2025 Highlights:
- Revenue: $552.9 million vs analyst estimates of $531.7 million (1.9% year-on-year growth, 4% beat)
- Adjusted EPS: $0.79 vs analyst expectations of $1.06 (25.3% miss)
- Adjusted EBITDA: $32.85 million vs analyst estimates of $38.55 million (5.9% margin, 14.8% miss)
- The company lifted its revenue guidance for the full year to $1.83 billion at the midpoint from $1.75 billion, a 4.3% increase
- Management lowered its full-year Adjusted EPS guidance to $0.63 at the midpoint, a 37.5% decrease
- EBITDA guidance for the full year is $72.5 million at the midpoint, below analyst estimates of $74.86 million
- Operating Margin: 5.5%, down from 7.4% in the same quarter last year
- Same-Store Sales rose 2% year on year (-8% in the same quarter last year)
- Market Capitalization: $237.5 million
“The quarter highlighted our ability to outperform broader industry trends, despite macroeconomic uncertainty. As expected, a highly competitive environment and significant promotional activity across the industry continues to pressure margins,” commented Austin Singleton, Chief Executive Officer at OneWater.
Company Overview
A public company since early 2020, OneWater Marine (NASDAQ: ONEW) sells boats, yachts, and other marine products.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul.
With $1.79 billion in revenue over the past 12 months, OneWater is a small retailer, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage with suppliers. On the bright side, it can grow faster because it has more white space to build new stores.
As you can see below, OneWater’s sales grew at an impressive 16.5% compounded annual growth rate over the last six years (we compare to 2019 to normalize for COVID-19 impacts) as it opened new stores and expanded its reach.
This quarter, OneWater reported modest year-on-year revenue growth of 1.9% but beat Wall Street’s estimates by 4%.
Looking ahead, sell-side analysts expect revenue to grow 2.1% over the next 12 months, a deceleration versus the last six years. This projection is underwhelming and indicates its products will face some demand challenges.
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Store Performance
Number of Stores
A retailer’s store count influences how much it can sell and how quickly revenue can grow.
OneWater opened new stores quickly over the last two years, averaging 2.3% annual growth, faster than the broader consumer retail sector.
When a retailer opens new stores, it usually means it’s investing for growth because demand is greater than supply, especially in areas where consumers may not have a store within reasonable driving distance.
Note that OneWater reports its store count intermittently, so some data points are missing in the chart below.
Same-Store Sales
A company's store base only paints one part of the picture. When demand is high, it makes sense to open more. But when demand is low, it’s prudent to close some locations and use the money in other ways. Same-store sales gives us insight into this topic because it measures organic growth for a retailer's e-commerce platform and brick-and-mortar shops that have existed for at least a year.
OneWater’s demand has been shrinking over the last two years as its same-store sales have averaged 1.1% annual declines. This performance is concerning - it shows OneWater artificially boosts its revenue by building new stores. We’d like to see a company’s same-store sales rise before it takes on the costly, capital-intensive endeavor of expanding its store base.
In the latest quarter, OneWater’s same-store sales rose 2% year on year. This growth was a well-appreciated turnaround from its historical levels, showing the business is regaining momentum.
Key Takeaways from OneWater’s Q2 Results
We enjoyed seeing OneWater beat analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance exceeded Wall Street’s estimates. On the other hand, its EBITDA missed and its gross margin fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.8% to $14.31 immediately following the results.
OneWater’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
