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William Mcgill

Thank you, Mike. Good morning, everyone, and thank you for joining us. Before we get into the details of the quarter, let me take a moment to commend our team for their exceptional commitment to serving our customers across every aspect of our business. We ended our fiscal year focused on the cleanup and restoration of many of our locations from Hurricane Helene and spent a fair portion of the first quarter of fiscal 2025, repeating the process as a result of the hurricane Milton.
We are grateful for the extraordinary efforts our team has demonstrated, even as many continue to navigate the disruptions caused by the storms, their own lives and communities. Operationally, December quarter revenue was strained with the combination of the hurricanes and the soft retail demand across the outdoor recreation space. While the top line was a bit lighter than we had anticipated, it isn't surprising that the shortfall largely came from the disruption to the entire state of Florida.
Having said that, it does seem that potential buyers have remained on the sidelines given the mixed economic data persistent inflation uncertainty and a tenuous geopolitical climate. It's difficult to dissect precisely how much of the 11% decrease in same-store sales in Q1 was the result of the hurricanes versus the macroeconomic environment, except to say that both were impactful.
Although the premium segment of the retail boat market was not immune from those headwinds, our strong presence in this high-value category sets us apart. This segment characterized by more resilient demand and customer loyalty often recovers faster during market improvements. By fighting exclusive brands, top-tier products, and tailored services to our premium customers, we are strategically positioned to navigate these challenges effectively and take advantage of growth opportunities as demand rebounds.
Gross margin came in at over 36% in the quarter, which was particularly impressive in light of the underlying retail market. Two factors drove the increase. First, the promotional environment and mix of sales; and second, our strategic focus on driving growth from our higher-margin businesses. It's worth noting that our nonboat revenue has grown significantly from 2019. And over that time, we have seen a measured increase in gross margin.
Our higher-margin businesses, including Marinas, super yacht services, finance and insurance and brokerage services continued to perform well and provide us with more durable margin streams. To that point, our December quarter financial results spotlight the success of our related diversification strategy. Despite a nearly $60 million decline in revenue, hurricanes and a challenged environment, our higher margins helped insulate the business as reflected in our consistent adjusted EBITDA compared with last year.
Our expense initiatives certainly contributed, but the primary building block is the profit contribution from our higher-margin businesses. On the expense side of the business, as Mike will discuss, we are focused on improving efficiencies and continuing to seek areas to reduce costs. We have made significant progress and remain focused on pursuing further improvements.
Turning to other highlights. Many of our stores recently expanded with our Cruisers Yachts brand. Now all of our stores in key regions in the Southern US, including Texas, [Forrestania] and West Florida will feature the full range of Cruisers Yachts. This includes the 57 FLY, which recently debuted at the Fort Lauderdale Boat Show.
In addition, our Intrepid power boats brand recently enhanced its leadership with the appointment of Terry McNew as the brand's President. Terry brings more than three decades of marine industry experience to Intrepid, including executive roles at Brunswick and MasterCraft. Terry's vision and leadership will help build upon Intrepid's strong foundation and drive the brand's continued success in delivering world-class power boats to our customers.
I also want to spotlight the outstanding work of Steve English and the IGY Marinas' team and continuing to expand the global recognition of what we believe is the world's premier Marina brand. Membership in our exclusive IGY Trident program is growing, allowing more Super Yacht owners and captains to enjoy the benefits of guaranteed dockage and priority access at some of the world's premier Marinas, especially as dock space becomes increasingly scarce.
Steve and the team are also nearing completion of the new IGY Savannah Harbor Marina, which is scheduled to open in March. New Wave Innovations continues to lead the way with technological advancement that will drive more synergies across our portfolio. We continue to gain a strategic advantage in the market with our innovation and technology platforms.
And with that, let me turn the call back to Mike for the financial review. Mike?

Michael Mclamb

Thank you, Brett, and good morning again, everyone. I want to echo Brett's sentiments about the resilience of our team in navigating the challenges of the current market and the storms. As Brett noted, our top line performance reflected both the impact from TWO hurricanes in the softer retail environment. The industry registration data for each month in the quarter continued to reflect the challenges we are facing.
Although we did see increased retail activity following the storms and November, on a sequential basis, December retail was less than expected, resulting in a soft lows to the quarter. Our same-store sales were down 11%, while units were down in the mid-single-digit range, meaning our AUP was also down.
Not surprisingly, lower sales in Florida, which typically are larger in nature, was the biggest driver of the AUP decline. While gross profit declined in absolute dollars due to lower revenue, as Brett pointed out, our gross margin was healthy, reflecting the benefits from our strategy of expanding into higher-margin businesses.
As we go through the income statement, keep in mind that our GAAP results include a $25.8 million gain from an adjustment to the fair value of contingent consideration. Much of the gain is from the earnout reconciliation related to IGY. As we have said on prior calls, IGY continues to perform well, and we are very pleased with our overall performance. However, contingent consideration liabilities can fluctuate based on the achievement of certain predefined qualitative and quantitative milestones.
Excluding the items noted in the press release in both periods, adjusted SG&A in the quarter decreased year-over-year to $149.4 million. As part of our strategic cost reduction initiatives and to align our footprint with the current market environment, we consolidated or sold three locations during the quarter and took other actions designed to enhance our operational efficiencies. As mentioned during our year-end earnings call, we see inflation in several key areas, but we continue our focus of strengthening our operational profile, disciplined and targeted expense management.
In the first quarter, we incurred a charge of $5 million to write-off images associated with Hurricane Milton. The large majority of which we anticipate will be covered by insurance. Income tax expense was $2.1 million in the quarter, which reflects a rather low effective tax rate compared to what we have guided. The IRS concurred with our characterization of several foreign entities resulting in a onetime benefit during the quarter that significantly reduced our effective tax rate.
GAAP net income for the quarter was $18.1 million or $0.77 per diluted share. Adjusted net income for the quarter was $4.1 million or $0.17 per diluted share compared with $4.4 million or $0.19 per diluted share last year. First quarter adjusted EBITDA of $26.1 million was nearly flat with last year, which is a strong result considering the year-over-year revenue decrease.
Turning to the balance sheet. Cash and cash equivalents totaled $145 million compared with $210 million at the end of last year's first quarter, primarily due to the timing of inventory purchases and related financing. Although inventories were up more than anticipated at quarter end due to lower-than-expected revenue, our floor plan lenders note that our inventory remains much fresher and more current than the industry as a whole.
To ensure it stays that way, we have adjusted where appropriate, future orders and implemented proven programs to keep the aging of our inventory in check. With higher inventory, short-term borrowings, which consists of floor plan financing also increased. Consistent with the increased availability of inventory, customer deposits declined.
At quarter end, our debt to EBITDA net of cash stood at just over 1.6 times, which highlights our ongoing financial strength. With our focus on inventory and related aging, we will continue to maintain a healthy balance sheet. Additionally, we have significant financial flexibility through our additional unencumbered inventory and access to approximately $200 million in available lines of credit.
The fiscal 2025 outlook we provided on our year-end call and has not changed. Industry-wide, we continue to expect used sales to be essentially flat with fiscal 2024 with inventory levels likely normalizing as we move through the selling season. Promotional activity will remain elevated in the second quarter with improvement as we move into the back half of the fiscal year.
Although industry conditions were challenging in the quarter, with the start of the boat show season and expected improved clarity in the geopolitical environment, we are cautiously optimistic about our same-store sales remaining flattish on a year-over-year basis. We expect adjusted EBITDA within our targeted range of $150 million to $180 million with adjusted net income in the range of $1.80 to $2.80 per diluted share.
In addition, we continue to forecast consolidated gross margins in the low 30% range for the fiscal year. These expectations do not consider give effect for, among other things, material acquisitions that we may complete or other unforeseen events, including weather and changes in global economic conditions.
Looking at current business conditions, we are expecting January revenue to be up over the prior year. Well, that is encouraging, it's important to keep in mind that January is typically the smallest month of the March quarter. With that, I'll turn the call back over to Brett for closing comments. Brett?

William Mcgill

Thanks, Mike. While economic conditions in the recreational marine industry have been challenging, we anticipate that the pace of activity will improve as we move into the spring selling season. Early activity at this year's retail boat shows has been encouraging, and we believe that our position within the premium category of the segment will enable us to achieve meaningful growth and outperform the industry as market conditions recover.
As a leader in the recreational marine market, our strategic advantage centers on the diverse yet complementary nature of our portfolio, all of the pieces are related, and we continue to leverage the synergy. Every aspect of our business from retail locations to Marinas, Super Yachts services, finance and insurance operations and manufacturing is interconnected with each component strengthening and supporting the others to drive overall success.
We are confident in our ability to execute our growth strategy by focusing on innovation, enhancing customer experiences and further expanding our higher-margin businesses. And with that, Mike and I will be happy to take your questions. Operator, please open up the line for Q&A.

Question and Answer Session

Operator

(Operator Instructions) Joseph Altobello, Raymond James.

Joe Altobello

Question was on SG&A. I'm trying to get a sense for where you guys see SG&A this year. I think on the last earnings call, you seem to imply about 50 basis points of leverage with the annualization of $20 million to $25 million of cuts, but you're also seeing some creep in other costs. So given what we saw in Q1, what's a good realistic number for SG&A this year?

Michael Mclamb

Hi, Joe. It's Mike. Good question. We said last call that we were aiming to get back SG&A as a percentage of revenue equal or approximating where it was in 2023, which at the time was about a 100-basis point overall reduction. But because of the inflationary cost increases that we are seeing, we probably alluded to something less than 100, but that's still our target for this year when the year wraps up on a full year basis.
Obviously, as a percentage it jumps around quarter-to-quarter based on how strong retail activity is, but that's what we're shooting for. I think I again said in the prepared remarks that we do see inflation still in certain parts of the business that we're challenged with, but we're not giving up our overall goal of improving the operational efficiencies of the company.

Joe Altobello

Got it. Just a follow-up on that. Can you speak to the insurance market in Florida, either for boats and or marinas? Have you seen any material uptick in premiums, for example, or are seeing insurers leaving the market?

Michael Mclamb

Another good question. As of now, on retail insurers, like for people who are buying boats from us, we have not experienced an increase from the people who ensure boats in Florida. It wouldn't surprise me if there is something in the future once the dust all settles. Likewise, when you think about just the nature of the storms also even the fires all the way out west, unfortunately for the people out there, you would think that the storms and the fires would have some type of an impact on the insurance market or when it comes to companies ensure the risks that we have, the property risks that we have.
We haven't seen any specific increases yet, but we're mindful that there could be some of those are some of the inflationary pressures I mentioned on our last earnings call, specific to insured. So, we're waiting and seeing right now, I guess, is what I'd say on both.

Joe Altobello

Okay. Just last one, if I could. Given the onetime benefit in Q1, what are you expecting for a full year tax rate?

Michael Mclamb

We guided to 26.5%. I haven't changed that in the overall guidance. And actually, I'll just comment on that, Joe. So, the benefit in Q1 is about $0.12 in the quarter. So, if we're $0.17 on a GAAP basis, because of the effective rate adjustment, it's about a $0.12 impact in that quarter. In the scheme of a whole year, I didn't think it was material enough to adjust the overall guidance yet. We'll keep watching that to see if we need to bring the effective rate down a little bit for the full year.

Operator

Drew Crum, Stifel.

Drew Crum

So just a question on the adjusted gross margin. I think the 36% plus for the quarter would seem to be pacing ahead of where you thought it might be for the year, which I believe was and closer to 32%, 33% range. Do you see upside to your original gross margin assumption based on the fiscal 1Q performance? Or should we expect this to fall in subsequent quarters? And if so, what would be the drivers for that?

Michael Mclamb

Hi, Drew, good question. I comment. It's Mike. Margins do change throughout the year. Typically, when you get into the higher volume quarters like March and June, they are lower gross margins when you look kind of historically in our company. So obviously, we're pleased with the overall -- by the way, that's not an adjusted gross margin. That is the gross margin.
And I know we have a couple of different adjusted numbers here, but we're pleased with where the 36% is in the quarter. And hopefully, as we move through the year, there's an opportunity to talk about improved margins. But I think at this point, we keep the margin guidance in that low 30% range as we mentioned.

William Mcgill

And I'll add, Drew, that when you have the sales when we had the loss of the sales in the quarter from hurricanes and other factors that obviously puts a higher percentage comes from the higher-margin businesses. So that's part of the contribution to that higher margin you see.

Drew Crum

Got it. Okay. And then maybe just one housekeeping item. On the interest expense line, it was up a little bit on a dollar basis and as a percentage of revenue year-on-year. Obviously, a lot of moving pieces here. But how do you see that moving around over the balance of the year?

Michael Mclamb

Thanks, Drew. Yes, it's primarily because inventory is up, and the related financing of inventory is up. I think the press release says our prepared remarks as inventory is elevated higher than we would have expected it to be. And we work through -- and typically, the December quarter or the March quarter is peak inventory. Hopefully, as we move through the March quarter, it's going to prove out that we -- that December was peak inventory. And as inventories come down hopefully somewhat in March and then again in June seasonally, and then end the year a little bit lower interest expense will have an opportunity to begin to reduce accordingly.
We are getting the benefit. We are getting the benefit now of 100 basis points in total in terms of reduction. Not all of that's for the full fiscal year, the two most recent cuts, obviously, are just for the remaining nine months of the year, which will be beneficial.

Operator

Michael Swartz, Truist Securities.

Michael Swartz

Maybe just to start, I'm just wondering, across your business, Florida is a seasonally larger piece of the business and for the industry in the December quarter. I'm just wondering where their regional disparities between the retail volume that you saw? In other words, outside of Florida, would it have been better than down 11?

William Mcgill

You're saying that kind of the difference between [out] Florida and non-Florida stores revenue. Is that what you're asking, Mike?

Michael Swartz

Yes.

William Mcgill

Yes, I think that -- I'll categorize Mike, help me out here. I believe that our non-Florida revenue was pretty flat, like almost exactly flat and the variation tends to come from Florida almost completely.

Michael Mclamb

Correct. Yes. Brett's prepared remarks actually said that the decline in revenue was heavily weighted towards Florida during the quarter.

Michael Swartz

And just to clarify, on a comparable store basis, was it flat as well outside of Florida?

Michael Mclamb

Yes, you're going to get -- I'm sure when you break it apart, you're going to have regions that were up or down, but in total, outside of Flota business was flat to last year in the quarter.

Michael Swartz

Okay. That's helpful. I appreciate that. And then just in terms of a lot of moving pieces to the gross profit margin and understanding seasonality is part of the equation with a lot of the non-boat sales or both businesses being a larger portion of sales in December. But is there any way of looking at just kind of stripping all that out, what boat margins were relative to last year?

Michael Mclamb

Yes, I can comment on that, Joe. I think for those of you who have followed us for a long time, you'll remember that last year's December quarter, we sensed softness in the industry, and we got very aggressive from a promotional perspective. I think on this call last year, we talked about that we pretty much went alone. A lot of the manufacturing partners were -- they typically don't. They typically have not started with all their incentives yet given the cycle coming out of 2023.
In the current quarter, the manufacturer partners are doing what they normally would be doing in an environment like we're in. So, there is additional support coming from manufacturers, but it's really more support, I would stress coming from them. So, while we're going to market more aggressively, we have some additional help from the manufacturing partners this quarter versus last year.

Operator

Frederick Wightman, Wolfe Research

Fred Wightman

I'm just hoping from a very high level. If we think about some of the puts and takes for top line. I mean rates are probably higher than you would have thought they would have been three or four months ago. You've talked about a choppy retail environment. December was weak and inventories are above plan. So, when you put all that together, like what is driving the cautious optimism for '25? Like where is the offset on the top line to keep the full year outlook unchanged.

Michael Mclamb

I can take a stab then Brent repair anything that I say. But when we came out of the storms, we had good retail activity in Lauderdale. There were a couple of press releases that certain manufacturers put out that largely reflected what we did the month of November was honestly a pretty decent month. Now it's always hard to say how much of that is made up from the storms, how much of that is retail activity December was softer.
We're in boat shows right now that generally are going -- they're not all 100% great, but they're generally going pretty good. And we feel at least there's clarity in terms of the political environment. And I think the expectation is that with that clarity and with things settling down, hopefully, there'll be improved retail activity.

William Mcgill

I think I'll add to it, that December was much tougher than you had anticipated. Like we said, November was great, but really when you dig down, Mike said it, we probably were just getting business that didn't happen because of the hurricanes in October. So, you pushed December was rough. I think you'll hear that across a lot of industries, probably. And then January, Mike commented that where things are looking up for January. And I know we commented it's a small month, but its important months leading into these boat shows. So, it is up right now.

Fred Wightman

That's helpful. And then I think entering the fiscal year, you guys had alluded to a timing of the recovery for the Florida market as probably being the biggest unknown entering the year. And I'm wondering if that's still a fair characterism -- and if you could maybe update us on how you see the broader Florida market recovering versus plan?

William Mcgill

Yes. I think you got to -- you probably break it down into a couple of parts, right? There were stores that were disrupted because of the storm, meaning preparing, they might get hit, but they never did get hit. So that was just very disruptive, call it, October. They picked up that business. Those stores, I'd say they're all back up and running a rocking and rolling. And then there are stores that were damaged by the storm, the communities were damaged the docs, the people's homes.
I don't even know the timeline on some of that. I know our stores, our team resilient, and we put mobile trailers up, computers are working, and we're engaged in business and we're selling boats, but people's homes and docs and their life has to get back in order, too. I don't have a timeline for it other than I'm impressed with what the team is doing under the circumstances.

Operator

John Healy, Northcoast Research.

John Healy

Mike, I want to spend just a minute on the gross margins a little bit more detail. In the release, you talked about three or four things that kind of help that improvement. I was wondering if you could maybe give a little bit more granularity on the contribution of each. And then thinking about the go forward, just the ultimate contribution that some of those items can have and maybe where you kind of see a more steady state gross margin profile for the business?

Michael Mclamb

Thanks, John. Good question. I'd tell you; I think the biggest driver of the business is the growth in our higher-margin businesses that we've expanded with and improved upon. They all grew in absolute dollars over prior year the higher margins as a percentage. I think last year, we were probably in this quarter, something like 25%, 26%. This year, we're over 30%. And part of that what Brett said when you have a decline in revenue in the neighborhood of $60 million year-over-year. Your margin businesses are going to expand.
But I do still think on a full year basis, the low 30s is kind of the right number to be thinking about. I think long term, as we continue to think about the business and even as we continue to complete acquisitions. We're pretty focused on adding businesses that have a profile with higher margins for the reasons you see this quarter, they tend to be more stable, a little more resilient, help support the overall operations, the EBITDA and cash flows of the organization.
So I think long term, there will be another discussion about where margins go to. But today, I think that the low 30s is probably the right number to be thinking about.

Operator

Brandon Rolle, D.A. Davidson.

Brandon Rolle

First, on retail, I think you had mentioned flattish retail expectations for the remainder of the year. Do those expects bake in any share gains versus the industry where maybe you're expecting the industry to be down year-over-year?

Michael Mclamb

Actually, that's a really good question, Brandon. And normally, as you guys know, we typically do outperform the industry. I think when we did our guidance for 2025, we were a little cautious about that only because of the impact to our stores on the West Coast of Florida, and that is a significant part of our business. I think I said last call, it was roughly 25% of business.
So we haven't changed that. I mean, typically, we would outperform the industry. So, our flattish sales are consistent with what we said about the industry, which is flattish. So hopefully, as the year goes on, there could be some upside in that if the industry is, in fact, flat in our stores have recovered and we can beat that.

James Hardiman

Okay. Great. And then on inventory, I think you in the press release mentioned being a little bit elevated in some areas. I'd imagine you're in a better position than industry participants. Could you talk about maybe pressure points in your own inventory and then maybe what you're seeing for the broader industry?

William Mcgill

Hi, Brandon, this is Brett. I'll comment first. I think our focus on our aged product and working with the manufacturers to get the orders right and get those boats out. We feel good about where our inventory is at from a quality, less age, still some work to do there. We're laser-focused here at the boat shows in this winter season to get those -- any last bits of those cleaned up. So, Mike, do you want to add anything there?

Michael Mclamb

It's just elevated. We expected higher sales. And so, when you have less sales and you have the product that you were hoping to sell you have a little higher inventory. But I feel pretty comfortable that as we move through 2025. Inventories will improve and come and check overall.

Brandon Rolle

Okay. And for the broader industry?

Michael Mclamb

A broader industry of the data that we keep seeing and hearing is just that there continues to be an aging problem. And they're far more aged than we are more noncurrent, more older product than we have. I suspect as we go through 2025 that will also improve for the overall industry, too.

Operator

Michael Albanese, The Benchmark Company.

Michael Albanese

First one, as it relates to expense reduction, I'm just trying to get a sense of white space or, I guess, what leverage you can pull. I mean you closed three stores on the quarter. Were these more one-off kind of portfolio optimization situations? Or how can we think about really your unit count as we move throughout the year kind of taking your, I guess, retail assumptions as a flat retail?

Michael Mclamb

Yes, I think -- we don't have a ton of other stores that we can close. I think we've roughly closed 10 retail locations in the last three or four quarters. Most of those were duplicated where there's another store nearby where we're not really going to miss the revenue. The other expense initiatives, I think we mentioned on the last call, we certainly have looked at our number of team members are resources and made adjustments where it makes sense for the current environment, ourselves and our team are really going line by line in the P&L and looking at every expense that we have and contracts that we write, recurring expenses.
In the current quarter, we've had nice reductions really in a lot of other areas in the business marketing, other areas, T&E, et cetera, in the quarter. Unfortunately, we had some inflation coming in though that helps to offset some of that. But we're going to stay focused on it and continue to look for areas to improve the overall operational growth of the company.

Michael Albanese

Got it. That's helpful. And then just one more, if I could go back and ask about kind of the promotional and discounting activity inventory is up a little bit on the quarter. But I think across the industry bar and some certain segments that need a little bit more of a destock. Channel inventories are a bit tighter, a year in a go position, less aged product, and you kind of quoted more normal support from OEMs.
I mean so is your expectation then as we move into selling season, again, holding your assumptions is true that we'll start to see more relief and kind of stay within that normal cadence? Or are you expecting the promotional activity to remain significant kind of throughout the year?

William Mcgill

Mike, this is Brett. We're going to continue to see some aggressive promotional activity from manufacturers, dealers across the kind -- especially during this winter boat show season to get inventory levels and the aging -- everything you just pointed out, we got to get that right.
But I think we're in a good position with all those manufacturers we're lined up and ready for it. And we have a lot of product that's fresh and new, and those bring higher margins with new innovation. So, there's a good balance between those.

Operator

James Hardiman, Citigroup.

James Hardiman

Quickly circle, good morning. I wanted to circle back to the inventory conversation. So just looking at the balance sheet, I think inventory dollars, right, or up 18% year-over-year. I guess first question, is that an apples-to-apples number? Oftentimes, there's some M&A in there? I don't know if there's some ASP in there, just trying to get sort of a clean apples-to-apples, how much are units up in terms of your inventory year-over-year?
And then as I think about the go forward, it sounds like you expect orders to be significantly less than retail going forward to bring that number down. How long is that going to last? And what does that inventory number look like year-over-year as we work our way through the year?

Michael Mclamb

Yes, there's really nothing from an anomaly perspective in the comparison year-over-year other than last year, there were still categories where we were lean in inventory, and we did expect and then we did articulate that we were expecting to have inventory up this December versus last year's December, it just finished higher because of the lighter sales than we had actually achieved.
On a unit-over-unit basis, I actually don't recall what it's up year-over-year, James. I typically go back and look at where we're versus 2019 because a lot of people historically had asked that question and we're way down from 2019 as the industry is, which doesn't surprise you.
And then the tweaking of the orders and stuff that I mentioned on our prepared remarks, it is just that it's fine-tuning around the edges where it makes sense with our manufacturing partners. And we -- quite frankly, we always do that. We're always adjusting up or down were based on retail activity.
We said on our call last quarter that we expect the year inventory orders to finish around where they were last year, if not a little bit below and that is still where we're targeting. Obviously, it's all subject to retail activity, but that's still what we're targeting for the full year.

William Mcgill

James, I'll add that I think with December usually being a bigger boat selling month for sure and that being off, I think our ASP on inventory jumped, a touch for sure. And then that's why I made the comment about promotional activity. We're going to press the pedal to bring the inventory down here, especially in these winter boat show is.

James Hardiman

Got it. That's helpful. And then curious what you think drove the January improvement. It sounds like December was pretty bad January. It sounds like it was pretty good. I know it was a small month but is that Florida getting better. ASP is getting better, boats, non-boats. What's driving improvement in January?
And then, I guess, in the context of the full year guide, right, same-store sales in the December quarter were a little worse than expected but you still expect to get to flattish same-store sales, which would imply presumably some growth during the remaining three quarters. I guess I'm trying to figure out how we get there and what that looks like.
Originally, I think a lot of us had modeled sort of a slower first half and then a pickup in the second half, but then January is up. So just help us in terms of at least how you guys are thinking about that flow through the year?

William Mcgill

But I definitely comment that we watch things daily and weekly from some of the high-technology investments we've made that can tell us a lot. So, we can drive things quickly. December was just tough to get people. And so, we had to make some adjustments. So I'll give a little credit to our pretty innovative technology that we have to be able to drive some business in January.
But I would also say there's a feeling of a different consumer sentiment, so to speak, of putting in leads and us being able to convert those leads or get the people in the showroom. So, there's just -- I'll summarize it down to a little bit of a traffic uptick for January.

James Hardiman

Do you -- let me ask it this way. Do you think again, in the context of your full year flattish same-store sales, the revenue would need to be up at least modestly, right? It's not a big quarter, obviously, the December quarter, but do you think the second quarter, Sharon will be up in terms of same-store sales?

Michael Mclamb

Hi, James. This is Mike. When I think about -- actually, let's get to chime in, but I apologize. So, I was going to say what you just said the December quarter is a small quarter. The back half of the year is -- or the back three quarters of the year are all much bigger. We do have easier comps for sure in the September quarter, assuming there's no other hurricane because we were down 5% in September of 2024.
So we have an easier comp there. March quarter easier. The June comps relative to what we normally have done in this organization, the 4% in June is not all that up relative to what we've come. So, I think the back half of the year gives us an opportunity to have flattish comps for the whole year.

Operator

David S. MacGregor, Longbow Research.

David MacGregor

I just wanted to follow up, Mike, on your commentary around the revenue outlook for 2025. You mentioned that you'd closed 10 locations in the last three to four quarters. What does that loss of revenue represent as a headwind within the mix of factors going into that guidance?

Michael Mclamb

Good question, David. So, what I commented is really almost all those locations are duplicated, meaning there's a hub store in the same marketplace or at least adjacent to it. And then in a couple of cases where we've actually maybe left the market, the larger boat revenue that may have been recorded in the stores that were in that market is largely going to be recorded by us anyhow because of the way we structure the agreements of manufacturers, we have very large territories. So, we're not expecting really any headwinds from the locations that we've closed to date or.

William Mcgill

Very slight.

Michael Mclamb

Yes, very slight. Very slight headwind. But we would have adjusted our guidance if we were concerned about that. So, it's a good question, but it's really just closing primarily duplicated locations, David.

David MacGregor

Okay. I guess somebody has to ask the obligatory question around tariffs. How do you think about exposure there?

Michael Mclamb

It's a good question. When I think about our business, we do import product. The biggest region we import product from that's decent size is Europe, outside of Europe, we don't -- nothing is real material overall in terms of the percentage of revenue. And with Europe, I guess, if there is a tariff on Europe, with the strength in the dollar today where the Europe is danger at parity for most of our existence, we've brought boats in from Europe at a much higher euro.
So at least in theory, a reasonable level of tariff, while nobody wants it. We don't want it. It's something we could probably navigate between us and our manufacturing partners. So, we're watching it like everybody else is, we're trying to see what's going to come about. We would prefer none in terms of what we import, but we think we can navigate it.

David MacGregor

Mike, is there any way you could quantify kind of the magnitude of that in dollar terms or what that European purchase would represent?

Michael Mclamb

Europe is probably something like, yes, probably it's greater than 10%, less than 15% or around 15%. It's -- I'll take in my first answer, it's greater, less than 15% of total revenue.

David MacGregor

That works. And then last question for me is just, I guess, on capital allocation, and you've got a strong balance sheet. Maybe our inventory is a little bit higher right now, but your plan is for that to come down and certainly good cash position, lots of credit availability. How do you think about the opportunity right now when you survey the market to make acquisitions of destroyers or -- and if so, how do you think about prioritization of that initiative?

William Mcgill

Yes. Dave, it's a good question. We obviously are continuing to talk to a lot of different acquisition candidates to be that list. We're really bouncing against our overall strategy. Whether it's Marinas and Super Yacht services or even the boat retail business and retail business where it extends that they have storage and Marina and the higher-margin components of the business. So, and then within our markets, that we have, there's additional expansion opportunities with maybe new locations that add storage and revenue streams there. So, keeping an eye on all of that and to be opportunistic if that comes up.

Operator

Thank you. We have reached the end of question-and-answer session. Ms. McGill, I'd like to turn the floor back over to you for closing comments.

William Mcgill

Well, thank you, everybody, for joining us today. We're in full swing at all the winter boat shows, including the New York show this week. As well, we're gearing up for the Miami Show in February, and we hope to see some of you at some of these shows. So have a great day.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.