Brunswick reports 3 percent decline in sales
By Jonathan Sweet
April 24, 2014
Filed under News
Blaming poor winter weather in many key boating states, Brunswick Corp. reported sales of its engines and boats were down in the first quarter.
Overall, net sales for the company decreased by 3 percent versus Q1 2013, with bad weather also affecting the bowling and billiards segments.
“Colder than normal conditions affected the eastern two-thirds of the U.S. in 2014 and were more widespread than 2013, which was also a difficult year,” said CFO Bill Metzger.
For the first quarter of 2014, the company reported net sales of $969.2 million, down from $995.3 million a year earlier. For the quarter, the Company reported operating earnings of $94.7 million compared to $89.9 million in 2013.
Sales in the engine segment, which includes Mercury and the parts and accessories businesses, declined 3 percent worldwide from $521.8 million in 2013 to $505.1 million. Sales were down 5 percent in the United States, down 1 percent in Europe and down 6 percent for the rest of the world. A small increase in parts and accessories sales was more than offset by a decline in engine sales, Metzger said. Sales of both outboard and sterndrive engines were down, with modest growth in diesel engines.
Sales in the boat segment, which includes the company’s 14 boat brands, dropped 2 percent for the quarter from $289.7 million to $282.8 million. Operating earnings increased from $2.4 million to $8.4 million for the quarter due to improved margins from the company’s restructuring and other efficiencies.
Sales were up 38 percent in Europe, but down 4 percent in the United States and down 11 percent for the rest of the world. The European sales growth resulted from improvements in outboard models and smaller fiberglass boats. In the U.S., outboard boat sales increased, but sterndrive and inboard boat sales continued to decline.
CEO Dusty McCoy said he is optimistic about the rest of 2014 and 2015 – and that he is tired of talking about the weather.
“We’re through talking about the weather,” he said. “We’re going to go to work. We’ve invested a lot of money in new products that are going to do really well in the marketplace. The weather is going to be what it’s going to be and we’re just going to have to work around it.”
The company is expecting revenue growth in the mid single-digit range for engines and high single-digit range for boats, McCoy said.
The company will have a “steady flow” of new products coming into the marketplace in 2014 and 2015. He specifically mentioned Sea Ray’s new L650 and 350 SLX as examples of products buyers and dealers are excited about.
“The dealers are buoyant,” McCoy said. “The belief is we’re going to have a good year.”