Brunswick Q1 Revenues Down 21% from Record 2023
Results consistent with expectations in soft retail market, with strong winter boat show sales for Sea Ray, Boston Whaler
Brunswick Corp released its 2024 first-quarter financial results on Thursday reporting respectable numbers despite a soft global boat market.
For the quarter ended March 30, 2024, Brunswick reported net sales of US$1.36bn, representing a 22% year-over-year decrease from record revenues of $1.74bn reported for the first quarter of the FY2023.
Brunswick’s boat group reported revenues of $425.7m for the first quarter on the strength of new models like the Sea Ray SDX 270 Surf
Cost of sales decreased by 20% YoY, to $991.4m from $1.23bn reported one year ago. Selling, general and administrative expenses of $203.7m reflected a 4% YoY decrease, while higher restructuring, exit and impairment charges left the company with first quarter operating earnings of $110.6m, down 53% from the $236.1m reported for the prior Q1.
Net earnings for the first quarter were reported as $68.0m, for a 39% decrease from Q1 net earnings of $112.3m reported for the prior year period.
Reporting by segment, Brunswick’s propulsion business reported Q1 net sales of $578.2m for a 23% YoY decrease from the record $751.6m reported one year ago. Operating earnings of $82.8m fell 45% below the $151m reported for the prior Q1, with operating margin of 14.3% trailing the 20.1% for the prior year period.
Mercury Marine propulsion sales for the first quarter totalled $578m
Brunswick’s engine parts and accessories segment posted Q1 revenues of $262.4m for a 9% YoY decrease. Operating earnings of $33.2m trailed the $47.8 reported one year ago by 30%, with an operating margin of 12.7% below the 16.6% reported for the prior Q1.
Navico Group revenues of $210.9m fell 23.9% behind the $277.3m reported for the first quarter of 2023, for an operating loss of $2.4m against earnings of $12.8m for the prior year period. Operating margin of -1.1% fell below the 4.6% reported one year ago.
Brunswick’s boat group reported revenues of $425.7m for the first quarter, down 26% from the $575.2m earned in the previous Q1. Operating earnings of $29.4m fell 49% behind the $57.8m reported one year ago, with operating margin of 6.9% trailing the 10.0% reported for the previous first quarter.
CEO David Foulkes said that solid retail sales through the winter boat shows give the company confidence to leave full year guidance unchanged
Brunswick chief executive officer David Foulkes summed the first quarter of FY2024 as delivering essentially solid results that were in line with expectations in the face of a soft market and higher lending rates.
“Our early season internal boat unit retail performance is tracking with our initial outlook of flat to 2023, with boat show results slightly above prior year levels on a unit basis and with a richer mix of premium products,” he said. “We continue to support retail sales with levels of marketing and promotions appropriate to the environment, while successfully managing field inventory to target levels ahead of the prime selling season. Marine dealers, manufacturers and retailers continue to demonstrate caution with early-season wholesale ordering patterns, resulting in reduced shipment rates across our product businesses as compared to the first quarter of 2023 in which pipelines were being filled.”
“We closed the first quarter with 36.1 weeks on hand in the US, which is in line with historical norms”
– Brunswick Corp CEO, David Foulkes
In a call with analysts Foulkes noted that good winter boat show results encourage the company to make no changes to its full year earnings outlook. “As we move into the core 2024 retail selling season, we continue to work closely with our channel partners to maintain balanced current-model field inventory levels,” he said. “We closed the first quarter with 36.1 weeks on hand in the US, which is in line with historical norms.”
Foulkes cautioned that while encouraging winter boat show results give the company optimism for the coming months, Brunswick will continued closely monitoring uncertainty in the boat market, and particularly in the US. “Our year-to-date global internal unit retail sales are flat to prior year, including a solid start in the first weeks of the second quarter,” said Foulkes. “It is not uncommon to see differences in SSI reporting and internal data at this point in the season, and our expectation of a flat retail market for the full year currently remains unchanged.”