Malibu Boats (NASDAQ:MBUU) management told investors it delivered “solid” fiscal second-quarter 2026 results that came in slightly ahead of internal expectations, even as the company continues to operate in what it described as a challenging retail environment. Executives also said early boat show activity and the company’s year-end sales event were encouraging, while the broader outlook for the marine market remained unchanged.
Business update: boat shows, new models, and dealer focus
CEO Steve Menneto said the company entered the early boat show season with momentum across its brands and pointed to a successful Malibu year-end sales event that outperformed the prior year and helped drive December retail activity. Menneto said the promotional environment remains competitive, but he was encouraged by customer response to new model-year boats during the sales event and early boat shows.
On distribution, management emphasized its ongoing approach of working closely with dealers while “tightly managing channel inventories.” Menneto said Malibu is encouraged by what it called a healthy and current inventory position for model year 2026 boats across its dealer network, while the broader industry continues to work through what he described as a modest overhang of non-current inventory.
Financing program and components initiative
Menneto also discussed MBI Acceptance, a retail financing option being rolled out with financing partners. He said the program offers “rates as low as 3.99%” and is intended to give dealers another tool to engage customers and help close sales. Management said the program started as a pilot within Malibu and Axis and is now gaining momentum as it expands across the portfolio.
In the Q&A, management cautioned it is still early, but said it has seen “a higher take rate” on the 3.99% offering at a couple of boat shows. Menneto said feedback from dealers has been positive, including that it helped drive traffic to booths and “help close handfuls” of sales, though management said it was not yet enough to establish a trend.
Menneto also pointed to a newly announced marine components business as an extension of Malibu’s vertically integrated model. He said the company’s initial focus has been on establishing systems and processes, and that it is seeing early traction with Soft Grip flooring and trailer offerings, including engagement with two new customers. Management characterized these efforts as early stage and said it would provide updates as the platform develops.
Quarterly financial results: sales down, margin pressured
CFO David Black, on his first earnings call in the role, said second-quarter results were “slightly above” expectations. Net sales declined 5.8% year-over-year to $188.6 million, while unit volume decreased 9.5% to 1,106 units. Black attributed the sales decline primarily to lower wholesale shipments and lower unit volumes across all segments, along with unfavorable segment and model mix in the Malibu segment, partially offset by favorable model mix in Cobalt and saltwater fishing as well as inflation-driven price increases.
Black provided unit mix for the quarter:
- Malibu and Axis: approximately 46.4% of unit sales
- Saltwater fishing: 25.5%
- Cobalt: 28.1%
Consolidated net sales per unit rose 4.1% to $170,544, driven primarily by favorable model mix in Cobalt and saltwater fishing and price increases, partially offset by an unfavorable model mix in Malibu and an unfavorable segment mix overall. Black said the company expects segment mix to remain unfavorable and to pressure average selling prices through the fiscal year, citing year-over-year comparisons affected by production cut timing and seasonal mix shifts.
Profitability softened meaningfully. Gross profit fell 32.9% to $25.1 million and gross margin was 13.3%, down 540 basis points from the prior year. Black said the margin decline was driven primarily by fixed-cost deleverage due to lower sales and higher per-unit labor and material costs across all segments.
Selling and marketing expense increased 1.4% year-over-year, primarily from higher personnel-related expenses, and rose to 3.2% of sales. General and administrative expense decreased 21.5% (down $5.7 million), which Black said was driven by lower legal fees, incentive pay, and stock-based compensation; G&A was 11% of sales, down 230 basis points.
On the bottom line, Malibu posted a GAAP net loss of $2.5 million, compared with GAAP net income of $2.4 million a year earlier. Adjusted EBITDA declined 52.5% to $8.0 million, with adjusted EBITDA margin of 4.3% versus 8.4% in the prior-year quarter. On a non-GAAP basis, adjusted net loss per share was $0.02, compared with adjusted net income of $0.32 per share in the prior year; the company said it used a normalized C-Corp tax rate of 24.5% and a basic weighted average share count of about 19.1 million shares.
Cash flow, buybacks, and outlook
Black said Malibu generated $8.4 million of free cash flow in the quarter, including $4.4 million of capital expenditures. He also said the company expanded its share repurchase program to $70 million and repurchased $20.8 million of shares during the quarter, or 751,000 shares. Black described the buybacks as taking advantage of what the company viewed as attractive market conditions, while continuing to invest in the business.
For the full fiscal year, management said its market view is unchanged, continuing to expect marine markets to decline in the “mid to high single digits.” Against that backdrop, Malibu expects full-year sales to be flat to down mid-single digits year-over-year. For fiscal Q3, the company guided net sales to $198 million to $202 million.
Malibu expects full-year adjusted EBITDA margin of 8% to 9% and said its guidance includes a “modest direct impact” from tariffs, estimated at 1.5% to 3% of cost of sales assuming current rates. For Q3, the company expects adjusted EBITDA margins of approximately 8.5%.
In Q&A, management said year-over-year promotional activity tied to the year-end sales event and typical Q2 cadence represented about 50 basis points of cost pressure in the quarter. Black also addressed the implied margin improvement in the back half of the fiscal year, citing three primary drivers: expected sequential top-line growth and fixed-cost leverage, centralized sourcing benefits flowing more fully into results as higher-cost inventory is worked through, and a reduction in promotional dollars as inventory stabilizes.
On dealer sentiment, management said feedback has been mixed show-to-show but described the overall trend as positive and said boat shows are meeting expectations. Regarding channel inventory, Black said the outlook implies “some level of destocking” given expectations for a market decline, but added that it should stabilize later in the year, and that the company has capacity and flexibility to scale production if demand improves.
About Malibu Boats (NASDAQ:MBUU)
Malibu Boats, Inc is a leading designer, manufacturer and distributor of performance sport boats for the recreational boating market. The company’s product portfolio includes the premium Malibu® brand and the value-oriented Axis® Wake Research line, as well as Cobalt® boats following its 2020 acquisition. Malibu’s vessels are engineered to serve water-sports enthusiasts, with models optimized for wakeboarding, wakesurfing and waterskiing.
Founded in 1982 by water-sports enthusiast Jack Springer, Malibu Boats is headquartered in Loudon, Tennessee.
