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Marinemax Inc (HZO) Q1 2021 Earnings Call Transcript

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Marinemax Inc (NYSE: HZO)
Q1 2021 Earnings Call
Jan 28, 2021, 10:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings and welcome to the MarineMax Fiscal First Quarter 2021 Earnings Conference Call. [Operator Instructions] It is now my pleasure to turn the call over to Dawn Francfort, Head of Investor Relations. Please go ahead.

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Dawn Francfort -- Head of Investor Relations

Thank you, operator. Good morning everyone and thank you for joining this discussion of MarineMax fiscal first Quarter 2021 Conference Call. I'm sure that you've all received a copy of the press release that went out this morning, but if not, please call Linda Cameron at 727-531-1712, and she will email one to you right away.

And, now I would like to introduce the management team of MarineMax, Mr. Brett McGill, President and Chief Executive Officer and Mr. Mike McLamb, Chief Financial Officer of the Company. Management will make a few comments about the quarter and then be available for your questions. And with that in mind, let me turn the call over to Mike McLamb. Mike?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you, Dawn. Good morning, everyone and thank you for joining this call. Before I turn the call over to Brett. I'd like to tell you that certain of our comments are forward-looking statements as defined by the Private Securities Litigation Reform Act. These statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks include, but are not limited to, the impact of seasonality and weather, general economic conditions and the level of consumer spending, the company's ability to capitalize on opportunity, or grow its market share and numerous other factors identified in our Form 10-K and other filings with the Securities and Exchange Commission.

With that in mind, I'd like to turn the call over to Brett. Brett?

William Brett McGill -- Chief Executive Officer and President

Thank you Mike, and good morning everyone. Let me start by thanking the MarineMax Team for their focus and commitment, which drove our record-setting results to start fiscal 2021. We have worked hard over the years to build the most experienced, industry-leading team, and I am very proud of their results.

Today, I would like to start by reviewing a few of our first quarter highlights. Then, I will touch on how we are strategically approaching the important peak selling season as well as discussing the meaningful opportunities in front of us to create growth and long-term shareholder value. And finally, Mike will review the financial results in greater detail and provide some color on the balance of the year.

Let me start by reviewing the first quarter. Our top priority continues to be the health and safety of our team, customers and community as we serve our customers boating needs. We are pleased that our first quarter results greatly exceeded the very impressive results last year. A year ago, we had very strong growth in the December quarter and set a record for revenue and earning. The MarineMax team significantly outperform those results and raised the bar yet again. We further strengthened our financial position during the quarter, while completing the very strategic acquisition of SkipperBud's, the largest acquisition for the company to date.

As we indicated on our last earnings call in October, we finished fiscal 2020 with the highest revenue and earnings in the company's history. That momentum and industry demand has continued as shown by our results. Our record results continue to demonstrate our team's ability to evaluate customers' needs, act quickly and implement the right changes and how we operate our business. For the quarter we are particularly pleased with our continued solid performance in same-store sales, which increased over 20% which is on top of 24% same-store sales growth a year ago. Importantly, our new unit growth was even stronger at 35%. Furthermore in the quarter, we had meaningful growth across essentially all brand, categories and geographic region. The marine industry continues to experience a significant acceleration in new customers. This new foundational layer of customers to the boating lifestyle is comprised of the combination of new first-time buyers and people that decided to get back into boating, which should help support future growth as they migrate to larger or different types of products in the coming years. Our team remains energized by the shift, and given our scale, we should continue to significantly benefit from this resurgence.

During the quarter we also leveraged our investments in technology, driving leads in marketing analytics, which is converting in to sale. We continue to make investments in world-class customer engagement tools that improve our teams' efficiency and effectiveness and help us to take share and lead the industry. In the quarter, we added SkipperBud's and it's affiliate Silver Seas Yacht to our family. The acquisition added 20 locations, including 11 marina and storage operations. We have successfully integrated the business and believe many opportunities exists to share best practices, brands and resources to drive even greater growth in the years to come.

From a profitability perspective, one of the best elements of the quarter was strong gross margin. We benefited from increases in product margins, growth in our storage and service businesses, our asset light Fraser and Northrop & Johnson global charter businesses and our finance and insurance businesses. Expanding our margins has been a long-term strategic focus and recent acquisitions have contributed to that strategy. The combination of gross margin expansion and focused expense management resulted in considerable leverage and a record $1.04 of EPS for the quarter. But, even more impressive is that we believe there is incremental growth ahead.

So, now let me touch on how we are approaching the important peak selling season. We are well positioned and prepared to serve our customers. COVID had changed all aspects of customer expectations including the historically important Boat Show. Our team has adapted with greater digital capabilities and refocused marketing spend that leverages our stores and our online experience generating exceptional results. Beyond leaner industry inventory we continue to invest in training and tools to ensure our team is able to pivot to continue to meet the needs of our customers digitally. Our deep manufacturing relationships and nationwide shared inventory give us a competitive edge. With the largest selling season ahead, we expect to build on a strong start to our fiscal year and deliver exceptional customer experiences.

Our strategy to create long-term shareholder value is focused on driving top line growth, operating leverage, disciplined capital management and building on our strong culture. We continue to effectively execute on our multifaceted growth strategy supported by our global market presence, premium brands, exceptional customer service and ongoing investments in technology. Our focus on driving margins and improving costs continue to unlock significant leverage in our model. Our performance illustrates the power of our business model, specifically our scale, premium locations, and cash flow generating capability. MarineMax is a well-disciplined operator with a strong foundation from which to grow.

With that update, I will ask Mike to provide more detailed comments on the quarter. Mike?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you, Brett, and good morning again everyone. I would also like to start by thanking our team for their tremendous efforts that produced record revenue and earnings to start the year.

For the quarter, revenue grew 30% to over $411 million due largely to same-store sales growth of 20%. This exceptional growth was driven by even greater comparable new unit growth that exceeded 30%. While our AUP declined in the quarter from seasonally very strong sales of smaller product, the demand for larger product is also robust. A big takeaway from our results this quarter is our ability to post very strong comps on top of already strong comps.

Our gross profit dollars increased over $43 million while our gross margin rose 370 basis points to 30%. Our record gross margin was due to a handful of factors. Among these are improving margins on new and used boat sales, impressive service and storage performance of SkipperBud's, which has a long track record of performance in these categories, growth in our higher margin finance and insurance businesses, and growth in our brokerage business including our global Superyacht Services Organizations of Northrop & Johnson and Fraser Yachts. We would note that the superyacht charter business has remained adversely impacted by travel bans around the globe. Our higher margin businesses has been a focus of ours for sometime, including our acquisition strategy, which is helping to drive these results.

Regarding SG&A, the majority of the increase was due to the increase in sales and the related commissions combined with the two mergers we have recently completed, SkipperBud's and Northrop & Johnson. Interest expense dropped in the quarter due to lower interest rates and a sizable reduction in short-term borrowings given the cash we have generated. Our operating leverage in the quarter was over 17% which drove very strong earnings growth setting another quarterly record with pre-tax earnings of almost $31 million. Our record December quarter saw both net income and earnings per share more than double with EPS hitting $1.4 more than twice the level of last year's previous record.

Moving on to our balance sheet, we continue to build cash with about $121 million at quarter end versus $36 million a year ago. Even after paying cash for both Northrop & Johnson in July and SkipperBud's, October 1. As discussed last quarter, given the attractive interest rate environment we explored and did secure mortgages on a portion of our sizable real estate portfolio. Besides some slight rate arbitrage it further positions us to capitalize on opportunities as they develop.

Our inventory at quarter end was down 23% to $379 million, however, excluding Skippers our inventory is down closer to 36%. I illustrate this point to show how well our team has pivoted to selling in a lean inventory environment as proven by the very strong unit growth in same-store sales growth this quarter.

Looking at our liabilities despite added borrowings for Skipper's inventory, short-term borrowings decreased $171 million due largely to a reduction in inventories and increase in cash generation with the contribution from the roughly $53 million of mortgages that are outstanding. Customer deposits, while not the best predictor of near-term sales because they can be lumpy, due to the size of deposits and whether a trade is involved or not, nearly tripled in size due to the timing of large orders and more robust sales along with the contribution from Skipper's for future sales.

Our current ratio stands at 1.74 and our total liabilities to tangible net worth ratio is 1.42, both of these are very impressive balance sheet metrics. Our tangible net worth was $339 million or about $14.92 per share. Our balance sheet has always been a formidable strategic advantage, and today more than ever It continues to protect us on uncertain times while providing the capital for expansion as opportunities arise.

Turning to guidance, the December quarter exceeded expectations and the industry trends remained strong. The industry estimates for 2021 retail units are beginning to rise from the low-single digits to the mid-single digits. Since we usually outperform the industry and grow our AUP on an annual basis, we now expect our annual same-store sales growth to be in the high single digits. This is up from the mid-to-high single digits we guided to earlier in the year. Given the strength in earnings in December our guidance also assumes modest operating leverage improvement above our previous guidance. This expectations assumes we reached the low end of our historical targeted leverage of 12% to 17% given we have the bulk of the year still in front of us along with continued uncertainty. Accordingly, we are raising our earnings per share guidance to the range of $4 to $4.20 for 2021 from our earlier guidance of $3.70 to $3.90. Our guidance excludes the impact from any potential acquisitions that we may complete. As we progress through the year, we will provide updates as needed to our guidance. Looking at the remainder of 2021, remember that our March quarter is the easiest comparison with our toughest comparisons in the more meaningful summer quarters of June and September. Our guidance uses the share count of about 22.8 million shares and an effective tax rate of 26%. Our tax rate for the December quarter was meaningfully better than this due primarily to equity compensation deductions which are hard to predict and are not typically forecasted when we give guidance.

Turning to current trends, January will close a positive same-store sales and our backlog is meaningfully higher than last year. As we have said, industry trends remain strong and we are generally outperforming these elevated levels. We continue to feel good as we enter the important summer selling season that's early in the year and a lot of work remain.

With those comments, I'll turn the call back over to Brett for some closing comments. Brett?

William Brett McGill -- Chief Executive Officer and President

Thank you, Mike. MarineMax continues to benefit and capitalize on the surge in demand and the desire of consumers to find a safe recreational activity. Our team's performance to start the fiscal year has shown continued excellent execution, even on top of very impressive same-store sales a year ago we are creating exceptional customer experiences through our team's services, products and technology. Most exciting is that we see significant opportunity in our brand expansion and also our higher margin businesses. With about 30 locations globally, we believe our superyacht services business have considerable upside including their charter business, which should contribute in a much larger manner. We remain committed to the long-term financial strength of the company by driving cash flow growth. Importantly, our acquisitions are integrated and contributing immediately to our business. Looking forward, we are focused on building our strong team culture, we are focused on executing on our growth strategy and we are focused on creating long-term shareholder value.

With that, operator, let's open up the call for questions.

Questions and Answers:

Operator

Certainly. We will now be conducting a question-and-answer session. [Operator Instructions].

Our first question today is going from Joe Altobello from Raymond James. Your line is now live.

Joseph Altobello -- Raymond James & Associates -- Analyst

Thanks guys, good morning.

William Brett McGill -- Chief Executive Officer and President

Good morning.

Joseph Altobello -- Raymond James & Associates -- Analyst

First question on the guide for 2021, I guess Mike, you mentioned that you're still looking for flow through this year to be at the lower end of that 12% to 17%, we just did 17 plus in Q1. So I'm curious why you're still thinking low end of that range. Is it conservatism? Is there something that you you're expecting it's going to weigh on margins in the balance of the year.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

No, I think it's just that it's early in the year. We have one quarter under our belt. We're certainly aiming to achieve higher than that, but like I said, it is early in the year and we need to get through the March quarter or get into the June quarter and address things at that point in time.

Joseph Altobello -- Raymond James & Associates -- Analyst

Got it. And, just secondly, is there anything to take away from the jump in customer deposits, and the lower ASPs, perhaps in terms of the composition of your buyer or the type of boat they're buying or is it just noise in a small quarter

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Well, no, I think I actually customer deposits we do said they're lumpy and that we said that for years and it's hard to kind of see real solid trends from that, but I think it clearly points to everything that we said in the release and we said in these prepared remarks, the industry trends are and continue to be pretty darn solid. So, it does reflect the increased backlog that we have. This time of the year is seasonally very strong.

William Brett McGill -- Chief Executive Officer and President

And Joe, I'll comment on the the average price. I think that's probably just a little bit of noise in the quarter, some volume, closing, timing of those deals, those sort of things.

Joseph Altobello -- Raymond James & Associates -- Analyst

Got it. Okay, thank you guys.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you, Joe.

Operator

Thank you. Our next question is coming from James Hardiman from Wedbush Securities. Your line is now live.

James Hardiman -- Wedbush Securities -- Analyst

Hey, good morning guys. So obviously another great quarter here. Our first question. I think I probably know the answer to this one, but you increase your guide by about $0.30 at the midpoint, you beat street numbers by, call it $0.40 to $0.45. So all else equal, the signal here is that we should be lowering our estimate for the balance of the year. Is that the way that you're actually thinking about it. Obviously you don't give quarterly guidance, but how are you thinking about adjustments to the balance of the year?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Yes. So really it gets kind of similar to what I said to Joe, it's early in the year and we have three quarters ahead of us. We've completed one quarter. We hope to keep updating our guidance and looking at trends as we move through March and the June and September quarter. Certainly from an operational perspective, we're grabbing every day to keep creating more and more business throughout the March quarter and also the summer time.

James Hardiman -- Wedbush Securities -- Analyst

Okay. That's what I thought. And then, obviously some really great margin performance here, I think one of the challenges across the board with the stock market right now is trying to discern how much is sort of pandemic surge related and how much have an ongoing benefit there is longer term turn. Is there any way to think about teasing out. I guess, a, the promotional environment is is pretty favorable as we stand here today, so I guess that being number one, huge leverage benefit, but then you've also brought in some higher margin businesses as well. I guess what I'm trying to figure out is, when all the dust settles versus historical margin level should we be assuming that your sort of sustainable margin number is considerably higher?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

I can take it and Brett can join in if he wants to. I commented about kind of 3 different components that helped to drive the gross margin expansion and roughly a little bit less than one-third is due to new and used both pricing in this environment, and then the other two-third is due to our efforts including our acquisition strategy, but our efforts around growing our higher margin businesses, whether it's our brokerage business internally or by adding Northrop & Johnson and Fraser, or it's adding SkipperBud's, which does have a bigger element of storage, and of course we've been adding marinas within the core business of MarineMax too, but, and as I tell you, at least in the quarter actually about two-thirds is unrelated to the, if you would say, the more robust sales environment.

James Hardiman -- Wedbush Securities -- Analyst

Okay. So if I think about I guess, looking specifically at gross margins that over the last decade have been anywhere from 24% to 26%, I'll call it mid '20s, should we now be thinking about that sort of mid to high '20s going forward?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

I can tell you, we've got a lot of goals internally to keep driving our margin of I'll tell you specifically in our guidance, other than the benefit that we got in the March quarter, we aren't really tweaking margins up meaningfully in our guidance. We will continue to evaluate margins as we move through the year, but I think that's some potential upside if we execute properly from a margin perspective.

William Brett McGill -- Chief Executive Officer and President

And James. I'll add that as you can see with our acquisition strategy in the businesses we're kind of continuing to grow with, obviously there is a strategic move that to move that up or as well, not just benefiting from low inventory, high margin, low discounting environment. That's helping right now, but when we come out of that, when that may normalize, our strategic moves from make and shift continue to help usp.

James Hardiman -- Wedbush Securities -- Analyst

Got it. And then lastly for me, there is the pervasive bare case, I think, across a lot of big-ticket discretionary categories that a bunch of people will have bought, in this case boats in 2020, and then just about home and somehow say "oops" and realizes they made a huge mistake. Can you speak at all to just the satisfaction of new boat buyers obviously since you're as close to them, if anybody and sort of the likelihood that these people are going to down the line bail and ultimately put that boat on the used market a lot more quickly than then has historically been the case.

William Brett McGill -- Chief Executive Officer and President

Yeah. Good, good question we keep getting that same one, but with our strategy for really ever since we formed MarineMax was to service the customer second to none. There is no question we're and we're ramping up our service efforts trying to keep people happy. Our net promoter scores reflect that everybody is happy in the ones that need more attention were getting that too, but also our getaways an event strategy, we get them out boating, get them in safe, socially distance environments where they can enjoy their boat, that get them about using their boat, take good care of them, and and then you don't have that scenario that you talked about with a set of oops and and that's pretty rare. People, once they get into the boating lifestyle they really enjoy it. there clearly could be a cycle when they worn out, but those are opportunities for us as well in our brokerage market, but there won't be a flood of people.

James Hardiman -- Wedbush Securities -- Analyst

Excellent. Really helpful. Normally, I'd say see you guys in Miami, but I guess with just the time around out, I will see when I see you. Thanks guys.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Yeah, thanks James.

Operator

Thank you. Our next question is coming from Eric Wold of B. Riley FBR. Your line is now live.

Eric Wold -- B. Riley Securities -- Analyst

Thanks. Good morning guys. A couple of questions I guess. I guess one, can you give us a sense of what you would normally spend on boat shows? I guess this quarter specifically, and I guess maybe overall, how much of that would be reinvested into an enhanced virtual experiences or kind of alternative ways to reach customers, I guess that kind of what could you "save" if there is no loss of sales or [Indecipherable]?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

I can comment, then Brett can comment also, but I did comment on the call not long ago that we spent a double-digit millions in boat shows. It's not a small number. The biggest quarter for that spend is in the March quarter. We are allocating more of those dollars to of our digital spend and also the events experiences and in-store activities as Brett just alluded to. There is certainly is potential to have some savings that come out as net savings that comes out of that. I think it all depends on how well we execute on our strategies and what the results are from the different events and and what other events we may need to do. We have not baked into our guidance, again any other than any savings we may have had in the December quarter, we've not baked in any significant savings from boat show costs in the forward.

William Brett McGill -- Chief Executive Officer and President

Yeah. Eric I will chat, we want to realize some savings. There is no question about it, but we also want to continue to keep the excitement up for our customers. So, these in-store events we keep having, more private showings over a longer period of days and those events to hold them socially distanced and have them spread out over several days or a little more costly than but it doesn't clearly add up to a boat show, but it's hard to quantify because we pulled the marketing leverage as we need and then we can create an in-store event and have hundreds of customer shop over a couple of weeks. It's pretty powerful.

Eric Wold -- B. Riley Securities -- Analyst

And you expect to come out of these boat shows and then look toward next year's boat shows and you expect to come out of this with a different mindset toward how you would tackle physical boat shows, I mean do some boat shows, maybe not become relevant anymore or do you go out with the smaller footprint, how you think about that.

William Brett McGill -- Chief Executive Officer and President

I think I think all shows will look much differently in the future, which will be better for the consumer, I think people that didn't go this year realize that I didn't need to go, let's make them real good events to show people what's new in the market and save everybody a little bit of money and actually make a better experience for the customers. So they'll change what it will look like. We don't know, but we're working hard with the industry to more fixe that.

Eric Wold -- B. Riley Securities -- Analyst

Okay. And then final question. Your cash balance continues to improve, are you using for financing at the same level that you historically have for new inventory. I guess is the return on cash better investing in inventory or held for acquisitions or other opportunities or is that somewhat irrelevant given the quick turn that you are seeing inventory their [Indecipherable]

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Great question, Eric. And generally, throughout a period our excess cash is applied against our outstanding floor plan. Just to say whatever rate is there as we're looking for other opportunities to get different returns either through acquisitions or investing in our stores. But no, you're right, we do we take advantage of it and pay down, you can see a pretty substantial savings in interest, year-over-year despite paying the cash that we did for SkipperBud's and also Northrop & Johnson, adding the inventory for Skipper's and that's because of what you're saying we are taking advantage of the cash and pay down the line.

Eric Wold -- B. Riley Securities -- Analyst

Okay. Thank you guys.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Yeah, thank you.

Operator

Thank you. Our next question is coming from Fred Wightman from Wolfe Research. Your line is now live.

Frederick Wightman -- Wolfe Research -- Analyst

Hey guys, good morning. Just a quick housekeeping question first. Did you give that customer deposit number on an organic basis, I assume it reflects some SkipperBud's contribution, but do you have that organically?

William Brett McGill -- Chief Executive Officer and President

You know what, I don't have it Fred. What I can tell you is, while Skipper's has a contribution, it would still be catching everybody's attention today. Our customer deposits organically are up substantially.

Frederick Wightman -- Wolfe Research -- Analyst

Okay, that's helpful. And if we go back to last quarter, you talked about the industry potentially growing low-single digit to mid-single digit, this year. It sounds like you move that up a little bit and are now sort of in that mid-single digit range, but if we take a step back and look at what SSI was for 4Q in December specifically, is there a chance that that target lines are being conservative.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

I think it. Fred, I think there is a chance for sure. And I think everybody in the industry is doing all they can to make it conservative, trends the industry is about to get pretty good comps in the summer time, but just given where trends have been to date, and I'll remind everybody in the December quarter that we just announced. So, last year MarineMax and not the industry, but MarineMax had 24% same-store sales growth driven by 24% unit growth. This year we had 20% overall same-store sales growth, but our unit growth was 35%. And, so I think as we move through the year to be great to be able to update you guys and see unit trends continuing, but I think we got one quarter behind us, there still 3 quarters in front of us including separately comps, let's cross those bridges what we get to them.

Frederick Wightman -- Wolfe Research -- Analyst

Fair. And then just finally on the inventory side, I think you gave the organic numbers down 36%, so a little bit better than where you guys for last quarter, but some of the language in the Brunswick released today makes us how much they think it could be sort of 22 or maybe even later until we're back to whatever a normalized level will be, do you think that timeline and time horizon makes sense, just from a inventory replenishment and restocking timeframe?

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Yeah, I'll take that, but just given trends and what's happening in the industry. I think that estimate is as good as any, trends continue to be very strong, product coming in is going out. I mean, keep in mind our September quarter we were down roughly 40% in dollars and roughly 40% in December on an organic basis, we still drove really strong unit growth, so the manufacturers and we think we're working with best manufacturers, they are getting us the product, it's coming in, sold, it's going out. Our team is doing a really good job. Demand continues to be good. We watch our lead activity in the activity on our website and it's, it's a very good levels and increases. So we like what we're seeing.

Frederick Wightman -- Wolfe Research -- Analyst

Perfect. Thanks guys.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you.

Operator

Thanks. Our next question is coming from Scott Stember from CL King & Associates. Your line is now live.

Scott Stember -- CL King & Associates -- Analyst

Good morning guys, thanks for taking my questions.

William Brett McGill -- Chief Executive Officer and President

Thanks Scott. Yeah.

Scott Stember -- CL King & Associates -- Analyst

Do you maybe talk about the current trends, you said that there are some they're up solidly up nicely last quarter you talked about how seasonally things were better than normal even in the north reaches. It sounds like people don't want to get boxed out of getting a boat this season, but can you maybe just talk about what some of the lead times are? And then also maybe just talk about how strong seasonally things are?

William Brett McGill -- Chief Executive Officer and President

Yeah, I think I will let Mike talk on lead times Specifically, I think we mentioned it a little bit, but our ability to, with our inventory across the country and the ability to share that inventory and the information we have in front of our sales team to know that our boats maybe earmarked ahead to a Florida store but the Minnesota customer wants it we can sell it quickly, route it there. So we're not experiencing that, what we're seeing is if somebody says, look, I want to buy a boat to have it ready for March or April, w can make that happen and as quick as boats are landing on our showroom floors, they're going out to the customer, so we're fine. And that's a pretty good thing it's, there are some really hot models out there that are sold out for way out in advance and that's a good thing, but people seem to be willing to wait, and then also seems like we're willing to hit their timeframes. do when they want their new boat yeah.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

I would, the going to comment on the models you already covered that and then it does seem like consumers are aware of how the industry sits and they do almost come in with more of the mindset of, let me get in the line to get the boat and depending on the boat, we may to meet their needs a lot sooner but just depends on the model.

Scott Stember -- CL King & Associates -- Analyst

Okay and just the last question, I appreciate you guys are obviously want to be conservative for the back half of the year primarily, but the second quarter coming up how should we be thinking about that as far as, since you really talk about January being very strong maybe contextualized versus a year ago or even versus the first quarter.

William Brett McGill -- Chief Executive Officer and President

Yeah, I can give you a little color. I think we probably said this, if you go back and look at our April transcript for the March quarter. We've already said it that our December quarter was quite strong, our January and February last year was, actually very strong. So we are again comping positively against pretty darn good comps of January last year. Where things really decline was the month of March with COVID, so I think for the overall quarter I think were up 1% is a comparison versus last year. So it's the easiest comp. So if you think about just spreading out the year but we're saying high single-digit, call it 9% or 8% or however you guys model it. But my guess is you put a good chunk of in March and then try to spread the rest of it throughout the summer time.

Scott Stember -- CL King & Associates -- Analyst

Got it. And that's all I have. Thank you.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you.

Operator

Thanks. Our next question is coming from Mike Swartz from Truist Securities. Your line is now live.

Michael Swartz -- Truist Securities -- Analyst

Hey guys, good morning.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Good morning.

Michael Swartz -- Truist Securities -- Analyst

And just maybe touching on SkipperBud's and I think, Mike, you said a number of things just related to the P&L impact in the quarter. I think you said there accretive to gross margin, it sounds like it's a seasonally small quarter and obviously the overhead of the 20 stores. It sounds like that was somewhat of an offset. So I guess the question was Skipper's profitable in the quarter and then how do we think about the seasonality and the profitability of that business over the next couple of quarters.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

A good question. Yes, they were profitable in the quarter. It is their smallest quarter, which is true for the industry and they generally follow the industry trend. If you guys all follow the industry kind of, the smallest quarter is December, even March quarter is a little bit bigger, June is June's a very big quarter and September a decent sized quarter for them. So, probably a little more seasonal than even the industry data, but that's a pretty good benchmark. If you just follow that for them.

Michael Swartz -- Truist Securities -- Analyst

Okay. Okay, that's great. And then just on backlog, maybe just help us understand, I think you said backlog is up, but really how relevant is backlog right now? Just given the lead times, given the backlogs that are out there. Is it relevant to compare this year versus last year from that standpoint.

William Brett McGill -- Chief Executive Officer and President

I think, actually, I think you are on a really important topic I think a lot of people do focus on our customer deposits, and I understand why, but I think our commentary is really what people should always listen to in our commentary is pretty clearly that the industry is pretty strong right now and the January current trends, I think Scott you just asked about current trends, current trends are our very robust, people are still coming into the industry. I know there was some thought from some folks that, gosh, maybe this was a June quarter of that last year, September quarter of that last year, but just given how strong the industry data was for October, November, December, granted in a small quarter the commentary that we're saying probably the commentary that Brunswick saying, this is much longer than just a [Indecipherable] summer time of 2021. It's much more sustainable word of mouth spreading, friends are spending time on friend's boats, then that friend wants to buy their own boat. So, it's got a grass roots legs to it, which I think is going to help fuel growth for a lot longer than just the near term, but it's very positive for the industry. And, our website traffic and lead traffic is up substantially in January here.

Michael Swartz -- Truist Securities -- Analyst

Okay, great, thanks guys. That's it from me.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you Mike.

William Brett McGill -- Chief Executive Officer and President

Thank you.

Operator

Thank you. Our final question today is coming from Brandon Rolle from Northcoast Research. Your line is now live.

Brandon Rolle -- Northcoast Research Partners -- Analyst

Good morning. Congrats on a strong quarter. I was going to ask you guys to touch on the SkipperBud's acquisition and just how they've been able to capitalize with their storage business on the surge of new buyers. And, if you could also touch on just the availability of used inventory and pricing as we enter the first quarter of the year

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Yes. Skipper's was a very strategic acquisition for us for a lot of reasons. They were one of the largest, they are the largest out there and joined our family and they brought to us everything we've been working on, higher margin businesses, storage, just like you pointed out and it flowed through properly in the December quarter. It's they continue to sell boats, and they have storage facilities for those people to take care of in the winter. So it's playing out just as we had planned and expected and to your comment on your question on used inventory it's alive, it's tough to get a hold of, our brokerage business is also doing well. So it's, I think it's a good, used is going very well, but obviously, right now, you can always you handle a few more used boats, and when I say that we're also getting a lot of customers that are new to boating. So you don't have trends in that case.

Brandon Rolle -- Northcoast Research Partners -- Analyst

Okay, great. And also just on the new customers. Are you seeing people that were first time buyers tis summer, coming back to maybe trade out to a larger units or are most people just realizing the backlogs out for many months and they're just keeping the boat they have at the moment.

William Brett McGill -- Chief Executive Officer and President

We're definitely. So I don't have any analytical data on that, but we're definitely seeing people already who bought last summer coming back saying hey, maybe I should get a top model or just a little different style of boat or a little bit larger I can sleep on it now. So it's, we're seeing more of that and probably people would expect, and that's a good thing.

Brandon Rolle -- Northcoast Research Partners -- Analyst

Okay, great. Thank you.

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

Thank you, Brady.

Operator

Thank you. We have reached the end of our question-and-answer session. I will turn the floor back over to management for any further or closing comments.

William Brett McGill -- Chief Executive Officer and President

Thank you everybody for joining the call and taking the time with us today, and Mike and I will both be available if you have any additional questions today and we look forward to updating you on our next call.

Operator

[Operator Closing Remarks]

Duration: 41 minutes

Call participants:

Dawn Francfort -- Head of Investor Relations

Michael H. McLamb -- Executive Vice President, Chief Financial Officer and Secretary

William Brett McGill -- Chief Executive Officer and President

Joseph Altobello -- Raymond James & Associates -- Analyst

James Hardiman -- Wedbush Securities -- Analyst

Eric Wold -- B. Riley Securities -- Analyst

Frederick Wightman -- Wolfe Research -- Analyst

Scott Stember -- CL King & Associates -- Analyst

Michael Swartz -- Truist Securities -- Analyst

Brandon Rolle -- Northcoast Research Partners -- Analyst

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