Boat Stocks Tumble as MasterCraft Boat Holdings Warns of Weak Demand

Shares of boat stocks took a hit as MasterCraft Boat Holdings, a leading manufacturer of boats, predicted a significant decline in both profit and sales for the upcoming year. The company also expressed concerns about soft consumer demand, further dampening investor confidence.

Leading the decline were shares of MasterCraft and its competitor Marine Products, with both experiencing drops of 13% and 8% respectively during morning trading. Brunswick, the largest publicly-listed U.S. boatmaker, and retailer MarineMax also saw their shares fall by 2%. Malibu Boats, which recently reported its fiscal fourth quarter results, experienced a similar dip of nearly 2% in its share price.

MasterCraft had high hopes for its fiscal fourth quarter, which traditionally represents its peak selling period. However, Chief Executive Fred Brightbill revealed that retail sales progressively deteriorated throughout the quarter, leading the company to scale back its production in response. As a result, MasterCraft now enters the new fiscal year with excessive inventory on dealership lots.

For fiscal year 2024, MasterCraft anticipates a significant decline in both profit and sales due to higher interest rates and the burden of mounting inventory on demand. Accordingly, the company intends to take a conservative approach to its production plans for the year.