MasterCraft Boat Holdings, Inc. (MCFT) shares have tumbled 37% in the last year, including a 16% YTD drop. MasterCraft Boat is suffering from slowing demand and other setbacks after a booming post-Covid stretch.

MCFT’s earnings outlook has plummeted during the last 12 months, dropping meaningful lower following its Q3 FY24 release in early May.

MasterCraft Boat Basics

MasterCraft Boat is one of the powerhouses of the recreational boating world. The company is a leading designer, manufacturer, and marketer of recreational powerboats through its four brands: MasterCraft, Crest, Aviara, and Balise.

MasterCraft Boat holds a leading market share in performance sport boats and pontoon boats, two of the fastest-growing segments of the powerboat industry. MasterCraft Boat is also expanding in the large, growing luxury day boat segment.

(Click on image to enlarge)

Image Source: Zacks Investment Research

MasterCraft Boat posted 28% revenue growth in its fiscal 2021 and 38% stronger sales in FY22. The company posted 3% sales expansion in FY23, as it came under pressure from those difficult to compete against periods.

MasterCraft Boat benefitted from the Covid-based spending spree. But anyone who wanted to buy a boat over the last few years seemingly already did. Consumers are now spending heavily on travel and experiences. On top of that, the macroeconomic landscape is far different.

MasterCraft Boat CEO Brad Nelson said last quarter that a “competitor’s largest dealer is in financial distress, which has heightened competitive pressure with the potential for higher-than-normal competitor discounting. Dealer inventories remain higher-than-optimal and inventory carrying costs are elevated. Consequently, dealers are taking a cautious approach to ordering ahead of the annual model year changeover.”

(Click on image to enlarge)

Image Source: Zacks Investment Research

Bottom Line

MasterCraft Boat’s recent setbacks are part of a long-term downtrend that’s seen its consensus FY24 earnings estimate fall roughly 70% in the past 12 months, while its FY25 estimate is over 50% worse. MasterCraft Boat’s overall downward earnings revisions help it land a Zacks Rank #5 (Strong Sell) right now.

MasterCraft Boat shares are down 8% over the past five years vs. the S&P 500’s 90% climb. MCFT is not alone in its struggles, with the broader Zacks Consumer Discretionary sector down 20% during the last five years.

MasterCraft Boat trades below its 21-day, 50-day, and 200-day moving averages. MCFT also trades at a 62% premium to its three-year median at 11.X forward 12-month earnings. Now might not be the best time to think about buying MasterCraft Boat.

More By This Author: