MasterCraft Boat Holdings delivered a challenging but constructive Q2 2025, reflecting the cyclical nature of the premium recreational boating market. Revenue declined 36% year over year to $63.4 million, driven by planned lower production and an unfavorable model mix, with gross margin compressing to 17.2% from 23.3% a year ago. Despite the topline pressure, the company generated $11.0 million of operating cash flow and $8.6 million of free cash flow in the quarter, backed by a fortress balance sheet with no debt and about $63 million in cash and short-term investments. Management emphasized destocking progress and the ramp of the new XStar flagship, signaling a meaningful second-half earnings and cash-flow inflection as higher ASPs and a favorable mix drive profitability.
Looking ahead, MCFT narrowed its full-year guidance for fiscal 2025 amid the XStar launch and an improving but still cautious retail environment. The company now expects net sales of $275–$295 million, Adjusted EBITDA of $19–$24 million, and Adjusted EPS of $0.64–$0.86, with capex around $12 million. For Q3, management guided roughly $75 million in net sales and about $5 million of Adjusted EBITDA, with Adjusted EPS around $0.17. The XStar ramp, coupled with a more favorable product mix and ongoing inventory rebalancing, is the primary growth catalyst. Risks include macroeconomic volatility, consumer financing conditions, production ramp execution, and potential tariff or supply chain variability. Overall, the combination of a strong liquidity position, accretive product introductions, and disciplined capital allocation supports a constructive long-term investment thesis, albeit with near-term earnings volatility tied to the marine cycle.