Stock Falls as High Interest Rates Impact Business

Malibu Boats Inc., a prominent yacht maker based in Loudon, Tennessee, witnessed a significant decline in its second-quarter profit, leading to a negative impact on its stock value. The company reported a staggering 72% drop in profit due to the adverse effects of high interest rates.

Despite facing these challenges, Malibu Boats remains hopeful for the future, although it anticipates a decrease in sales by the mid-to-high thirties percentage for 2024.

  • Malibu Boats stock MBUU, +2.06% experienced an 8.2% decline in premarket trading. Over the past year, it has already plummeted by 15.8%, in stark contrast to the Nasdaq's 34.9% gain.

During the recent quarter, the company faced weak retail demand, which is typically observed during the winter months, resulting in a notable decrease in business.

Malibu Boats revealed that its net income for the three months ending December 31 stood at $11.27 million, or 49 cents a share, in comparison to $36.35 million, or $1.72 a share, during the same quarter the previous year.

Adjusted profit for the quarter was 57 cents per share, surpassing the FactSet consensus estimate of 47 cents per share.

The company's revenue also suffered a substantial decline, falling 37% from $338.7 million to $211.1 million, which fell short of the analyst estimate of $219.6 million.

"We are recalibrating wholesale production to align with retail demand as seasonality, coupled with continued interest rate pressures, has led to heightened inventory levels," stated Chief Executive Jack Springer. "Although the current macroeconomic outlook brings uncertainty, we are beginning to observe some positive signs."

Springer further expressed optimism about the company's ability to regain growth once the market recovers.

Malibu Boats is eagerly looking forward to the upcoming boat show season as it hopes it will serve as an indicator of retail recovery.

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