Brunswick Corp. reported consolidated net sales of $1.7 billion in the second quarter, a 7.3% reduction compared with $1.83 billion in the year-prior quarter.
Operating earnings of $194.4 million were a 30% decrease compared with $279 million a year ago. Adjusted operating margin was 13.8%, compared with 16.4% a year ago.
The company suffered a cyberattack June 13 that resulted in financial results that were lower than initial expectations. “The disruption associated with the IT security incident was the most significant in our propulsion and engine parts and accessories segments, and because of the proximity to the end of the quarter, there was limited opportunity to recover within the period,” CEO David Foulkes said in a statement. “Within nine days, the company announced that all primary global manufacturing and distribution facilities were fully operational, and there are no significant residual impacts.”
Foulkes continued: “Our business executed a strong second quarter, benefiting from market share gains, well-received new products, solid operational performance and diligent cost control. The new-boat market remains challenging, and year-do-date new-boat sales remain below 2022, but there has been relative improvement in recent months, with preliminary June U.S. SSI main powerboat retail turning positive and Brunswick outperforming the industry both in June and year-to-date.”
The propulsion segment reported a 4% decrease in sales in the second quarter. Planned reductions in lower horsepower outboard and sterndrive sales and production were offset by favorable product mix related to increased high-horsepower outboard demand and higher sales to repower customers. Mercury gained 460 basis points of U.S. retail market share in the second quarter and a total of 140 basis points year-to-date.
Engine parts and accessories were down 13% versus the second quarter of 2022. U.S. sales were offset by more seasonal third-party distribution sales and international market softness.
Navico Group posted a 20% decrease that was driven by lower retailer orders and slower recovery of RV OEM production.
Brunswick’s Boat Group delivered double-digit adjusted operating margins for the fifth consecutive quarter, but sales were down 1% due to the impact of lower-value product shipments and higher discounts. Freedom Boat Club had a strong quarter, contributing about 7% of sales to the boat segment.
Cash and marketable securities totaled $489.3 million at the end of the quarter, down $123.7 million from 2022 year-end levels.
For the balance of 2023, Brunswick anticipates net sales between $6.7 billion and $6.8 billion, adjusted diluted EPS of approximately $9.50, share repurchases in excess of $250 million, and third-quarter net sales to flatten compared with 2022.
