MasterCraft Boat Holdings (NASDAQ:MCFT) stock plunged in Wednesday’s early deals after the speedboat maker warned investors of significant uncertainty over demand amidst the economic downturn.
The company - which typically sells models of its flagship XStar speedboat for around $300,000 apiece – said sales for the fourth quarter were down 15.5% at $166.6 million, ahead of market expectations pitched at $162.1 million.
Adjusted earnings per share were reported at $1.37, exceeding a consensus forecast of $1.07.
Looking ahead, however, new guidance was set in the range of $390 million to $420 million for annual sales, and earnings expectations were set at $1.46 to $1.88. Both were substantially below prior market consensus estimates of $573 million and $4.00 respectively.
Its current quarter (fiscal first quarter 2024) is expected to yield $98 million of sales and 41 cents of earnings per share.
Chief executive Fred Brightbill, in a statement, noted “cyclical headwinds facing the industry” and described the slowdown seen during recent trading.
“As our fiscal fourth quarter progressed, retail sales slowed significantly and fell short of our expectations,” Brightbill said.
“Although we reduced production plans in response, dealer inventories ended fiscal 2023 at levels higher than we would now consider optimal.”
Despite the warning over the future outlook, the fourth quarter marked an overall positive fiscal year which Mastercraft called its “most profitable” with $662 million of total sales for the year representing a 3.2% improvement on the prior year, meanwhile, income from continuing business was up 2.9% year-over-year at $90 million.
Brightbill commented: “Our business performed extremely well during fiscal 2023, delivering a third consecutive record-setting year for net sales and earnings.
“Our strong operating performance resulted in the highest cash flow for any year in the company’s history.”
The Tennessee-headquartered boatbuilder’s chief executive, meanwhile, described Mastercraft’s balance sheet as “a fortress” and a competitive advantage.
In New York, Mastercraft stock was down 22.5% trading at $19.34 ahead of Wednesday’s opening bell.