Brunswick CEO discusses earnings, plant closure
While Brunswick continues to struggle with inboard boat sales, good sales in engines and outboards are helping offset those losses.
“We are seeing U.S. sales growth led by strength in outboard engines and solid growth in parts and accessories,” Brunswick CEO Dusty McCoy said today in discussing the company’s latest earnings report.
For the third quarter, engine revenue was up 11 percent, while revenue for boats boat sales was down 7 percent for an overall 3 percent increase in Brunswick’s marine segments. Year-to-date, marine revenue is down 1 percent, with a 5 percent decline in boats and a 2 percent increase in engines.
In the United States, engine revenue was up 14 percent and boat revenue was down 9 percent. Europe continues to be a trouble spot, with engine revenue down 12 percent and boats down 38 percent in the third quarter. Engine and boat sales were both up in the rest of the world.
While overall boat sales are up for the industry, much of the strength is in small boat sales. Brunswick’s product mix, McCoy said, doesn’t lend itself well to the current areas of growth. Only 48 percent of Brunswick’s boat sales are in the more robust aluminum or fiberglass outboard market, while 52 percent is accounted for by fiberglass sterndrive boats – a weaker market segment.
Brunswick is growing market share in the aluminum outboard segment, though, along with the cruiser market and engines, McCoy said.
McCoy also addressed the recent decision to suspend U.S. production of Bayliner cruisers and consolidate cruiser production at its Florida plant. Even after closing the Knoxville plant, the company will have capacity equal to three times its current worldwide cruiser demand, McCoy said.
Brunswick has confidence in the U.S. cruiser market over the long term and will continue to serve it through its Sea Ray brand.
“We’re in the cruiser business. It’s one of the real centerpieces of our Sea Ray brand,” McCoy said. “The cruiser market will ultimately rebound. We’ll not ever be adjusting our portfolio to get out of that.”