ONEW Q2 Deep Dive: Preowned Sales Growth and Inventory Strategy Offset Margin Pressures

Boat and marine products retailer OneWater Marine (NASDAQ:ONEW) reported Q2 CY2025 results topping the market’s revenue expectations, 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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StockStory’s Take

OneWater’s second quarter results were well received by the market, as the company outperformed Wall Street’s revenue expectations despite ongoing industry headwinds. Management credited its gains to continued growth in preowned boat sales and resilient same-store sales, highlighting a 2% increase even as the broader market saw double-digit declines. CEO Austin Singleton emphasized that proactive inventory management and prioritization of high-performing brands allowed OneWater to capture share in a challenging environment. The company also noted that higher promotional activity and a shift in its new boat model mix contributed to margin pressure during the quarter.

Looking ahead, OneWater’s updated guidance reflects both cautious optimism and a pragmatic response to current market dynamics. Management pointed to improved clarity on tariffs and a more stable pricing environment for new boat models as supportive factors. CFO Jack Ezzell noted that the company expects continued progress in inventory reduction and a focus on more profitable brands, while President Anthony Aisquith said, “Our broad dealership offerings and proactive sales teams position us to adapt quickly as consumer demand evolves.” The company’s outlook remains tempered by ongoing macro uncertainty and competitive pressures on margins.

Key Insights from Management’s Remarks

Management attributed second quarter performance to strong preowned boat sales, steady dealership traffic, and disciplined inventory management despite margin headwinds.

• Preowned boat sales momentum: OneWater saw its preowned boat segment grow for the third consecutive quarter, with higher unit volume and average selling price. Management described the increase as driven by improved inventory availability and a healthy trade-in cycle, rather than customers trading down to lower price points. CEO Austin Singleton explained that many buyers are upgrading to larger boats, causing a trickle-down effect that boosts preowned sales across the lineup.
• New boat segment pressures: While new boat unit sales declined, the average selling price rose, reflecting continued demand in the premium segment. However, the shift toward higher-value models added pressure to margins due to increased promotional activity and a more competitive environment. Management remains focused on balancing sales growth with disciplined pricing strategies.
• Inventory and brand rationalization: Proactive inventory management led to a 14% year-over-year reduction in total inventory, aligning with the company’s strategy to prioritize high-performing brands and exit selected lower-performing ones. Management expects to complete its brand rationalization efforts by year-end, allowing for a more streamlined and profitable product mix.
• Steady finance and insurance revenue: The company’s finance and insurance offerings maintained healthy penetration rates, supporting customer purchases and contributing stable revenue, even as the broader market remained cautious.
• Service and parts challenges: Revenue from service, parts, and other segments declined slightly, primarily due to lower product levels from manufacturers impacting the distribution business. Despite this, dealership service and parts sales remained resilient, underlining the importance of a comprehensive customer experience.

Drivers of Future Performance

OneWater’s outlook is shaped by ongoing inventory optimization, a focus on premium and preowned sales, and persistent margin headwinds from competitive and macroeconomic pressures.

• Margin pressure from promotions: Management expects continued industry-wide promotional activity to weigh on gross margins. CFO Jack Ezzell stated that while pricing discipline will remain a priority, competitive dynamics make it difficult to avoid some margin compression, especially as the company seeks to drive sales volume in a cautious demand environment.
• Inventory and brand focus: The company’s strategy to further reduce inventory and complete the exit of selected brands is intended to improve working capital efficiency and profitability. Progress on this front is seen as essential to supporting cash flow and long-term growth, with management targeting a 10–15% inventory reduction for the year.
• Macro and tariff uncertainty: While recent clarity on tariffs has reduced some consumer hesitation, management remains cautious about the broader economic outlook. CEO Austin Singleton noted that consumer confidence and demand for premium products are holding, but the company is closely monitoring for any signs of change in buyer behavior.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) signs of sustained improvement in same-store sales and dealership traffic, (2) the successful execution of inventory and brand rationalization initiatives, and (3) the trajectory of gross margins as promotional pressures persist. Progress on margin stabilization, cash flow improvement, and responsiveness to macroeconomic changes will also be key markers of performance.

OneWater currently trades at $16.28, up from $14.57 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).

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