PHOTO COURTESY BRUNSWICK

Brunswick Corp. reported net sales of $1.37 billion in the first quarter of 2024, a 21.7% decline from $1.74 billion in the prior-year quarter. Operating earnings were $110.6 million, and operating margin was 8.1%.

“Our businesses delivered solid results, consistent with expectations, as our continued market share gains, benefits from a wealth of outstanding new products, and comprehensive cost control measures resulted in financial performance in line with estimates, despite continued economic uncertainty,” CEO David Foulkes said in a statement. “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.”

Foulkes added that Brunswick continues to support retail sales with marketing and promotions “appropriate to the environment” while managing field inventory. Dealers, manufacturers and retailers continue to demonstrate caution with orders, resulting in reduced shipments compared with the prior-year. The company completed a planned debt issuance of $400 million in the first quarter to cover the refinancing of near-term debt.

The propulsion segment was down 23% due to smaller orders and managed production of current-model-year products. Brunswick said Mercury gained 200 basis points of U.S. the outboard market share compared with 2023, with gains in engines rated at 150 hp and higher.

Net sales in parts and accessories were down 9% for the quarter at $262.4 million, and adjusted operating earnings were down 24.7% at $36.5 million.

Navico Group was down 24%, driven by reduced sales to OEMs that moderated orders to control the pipeline of current-model-year products, partially offset by the introduction of new units.

The boat segment experienced a 26% decrease in sales from softer wholesale orders. Dealers have been ordering “cautiously ahead of the model-year changeover,” according to Brunswick. Freedom Boat Club contributed approximately 9% of boat-segment sales.

Cash and marketable securities totaled $560.3 million at the end of the first quarter, up $80.6 million from 2023 year-end levels.

“The continued economic uncertainty is resulting in cautious ordering patterns by our channel partners, making the rate and timing of wholesale acceleration and the balance of peak-season wholesale sales between the second and third quarters more difficult to predict,” Foulkes said. “Despite the challenging conditions, we remain focused on moving forward with our new-product plans and growth initiatives and driving resilient EPS and free cash flow, while continuing to balance production to support retail sales while managing pipelines.”

Guidance for 2024 is as follows:

• net sales of $6 billion to $6.2 billion

• adjusted diluted EPS of $7 to $8

• free cash flow in excess of $350 million

• annual share repurchases of approximately $250 million

• second-quarter net sales of $1.5 billion to $1.6 billion, and adjusted, diluted EPS in the range of $1.85 to $2.05