Sales were up 6 percent for the second quarter of the year at Brunswick Corp., as the industry giant reported growth in engine sales and fiberglass boats.
The company reported net sales of $1.14 billion for the quarter, up from $1.07 billion in 2014. Operating earnings were at $154.2 million, up from $138.3 million. Net earnings were up from $87.1 million in 2014 to $107.6 million for the quarter.
New engines — both outboard and sterndrive — and new models are generating market share gains, CEO Dusty McCoy said.
The company continues to be challenged by the strong dollar putting pressure on exports — sales would have been up 11 percent on a constant currency basis.About 20 percent of Brunswick’s business is conducted in currencies other than the U.S. dollar, said CFO Bill Metzger, and the company expects currency issues to reduce overall sales by about 4 percent.
For the full year, Brunswick expects industry sales to be down high single digits or low double digits in Canada, flat in Europe and down double digits in South America, McCoy said.
While Brunswick expects to outperform the industry in those markets, the pressure on sales — especially aluminum boats — will continue north of the border.
“The only thing about the boat group that causes us to be conservative for the remainder of the year is Canada,” McCoy said. “It’s just a tough place to be right now.”
The marine engine segment, which includes Mercury engines as well as Brunswick’s parts and accessories businesses, reported a 6 percent gain in net sales to $689.2 million for the quarter. International sales were down 3 percent for the engine segment. Outboards and parts and accessories continued to be strong, while sterndrive sales declined again, said COO Mark Schwabero.
The Brunswick Boat Group also reported growth for the quarter, with net sales up 8 percent to $349.3 million for the quarter compared to $324.1 million in 2014. The increase was driven by growth in fiberglass boats, partially offset by declines in aluminum sales, Schwabero said.
In the long term, McCoy said he sees great potential for growth for the industry, with an eventual return to 300,000 boats sold — but probably not any time soon.
“My own judgment that eventually the market will get back to 300,000 units,” McCoy said. “It will take a while and when it gets back it will be a different mix than it was back in 2005.”
At the same time, McCoy pointed out that Brunswick is built to be more profitable now than it was when the market was at 300,000.