Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: Can you help us unpack the $1.25 cost savings in the EPS bridge? Where are those savings coming from? A: David Foulkes, CEO: The savings come from several areas. We began generating run rate savings in 2024 by reducing our hourly and salaried staff. We will see a full year of these savings in 2025. Additionally, we have optimized our production lines and renegotiated cost reductions with suppliers, setting us up as a very efficient operation for 2025.
Q: Of the $1.25 cost savings, how much is from enacted measures versus future actions? How much is structural versus temporary? A: David Foulkes, CEO: It's probably about 50-50 between enacted and future measures. We have learned to operate more efficiently, and we are reluctant to add back fixed costs. We have ongoing projects that will yield benefits in 2025, including supply chain improvements and value engineering to reduce COGS.
Q: The guidance range is wide. What would lead to the low end versus the high end of the range? A: Ryan Gwillim, CFO: The high end would be achieved with a market that outperforms flat, improved FX rates, and no additional tariffs. The low end would result from a market decline, worsening FX rates, and potential new tariffs. The range reflects the uncertainty in the current environment.
Q: Is the plan to continue under-shipping the channel in the first half of the year? A: Ryan Gwillim, CFO: Yes, the plan is for wholesale to under-ship retail in the first half of the year, then moderate and flip in the second half. We took actions in the back half of 2024 to control inventory, resulting in historically low wholesale levels, setting us up for improvement in the second half of 2025.
Q: What is the outlook for industry growth in 2025, and how do interest rates factor into this? A: David Foulkes, CEO: We expect a flat market in the US, with potential for better performance. Boat loan rates have decreased from 9% to around 7.5%, which is a tailwind. The combination of lower rates, improved small business confidence, and promotions could drive market growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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