Brunswick Corp. had second quarter net sales of $1.44 billion, a decline of 15.2% compared with $1.7 billion in the prior-year quarter. The company attributed the decrease to lower dealer orders and higher discounts in certain segments.
Operating earnings were down year-over-year due to the impact of lower net sales and higher manufacturing costs related to lower production.
“With high interest rates continuing to pressure consumer budgets and suppress discretionary spending, the introduction of new model year products at the beginning of the important month of June did not catalyze boat purchases as we had anticipated, and our second quarter results were slightly below expectations,” CEO David Foulkes said in a statement.
“Continued slower retail sales, combined with higher levels of discounting and carrying costs, have increased pressure on dealer and channel profit margins resulting in ongoing conservative wholesale ordering patterns, which, in turn, is causing OEMs to maintain lower boat production rates through the main selling season, impacting propulsion and Navico Group OEM orders,” he added.
The company expects full-year sales to be down about 10% compared with original forecasts. Brunswick has worked with dealers to move aged inventory and said remaining field inventory is fresh, with approximately 85% of units being current.
“Our focus continues on leveraging our new products and adjusting production levels to maintain or gain share in key categories while diligently managing field inventory levels to end the year with weeks-on-hand at appropriate levels and units below prior year,” Foulkes said.
Mercury continues to gain share in outboards, with more than 48% of the overall domestic market. Additionally, the controls, rigging and propeller categories had operating margins ahead of the same period in 2023.
The propulsion segment reported a 21% decrease in sales, and the boat segment had a 23% decline. Freedom Boat Club contributed approximately 10% of the boat segment sales and added flagship locations in Denmark and the United Kingdom.
For the balance of 2024, Brunswick adjusted its net sales forecast to a range of $5.2 billion to $5.4 billion.
