Brunswick Q1 Earnings Call Highlights

Key Points

• Q1 outperformance and guidance raise: Brunswick reported net sales of $1.4 billion (+13% YoY) and adjusted EPS of $0.70 (+25%), and raised full‑year adjusted EPS guidance to $4.00–$4.50 after expecting lower net tariff impacts than previously estimated.
• Market share and segment momentum: Management said the company gained share across its portfolio—propulsion sales rose 17% (though propulsion earnings were weighed down by tariffs and accelerated R&D), while P&A and Navico saw double‑digit margin expansion and the Boat Group also improved profitability.
• Channel health and recurring revenue growth: Brunswick reported lean, aligned wholesale‑to‑retail pipelines (boat backlog = 71% of Q2 wholesale forecast) and highlighted rapid Freedom Boat Club expansion to 446 locations plus a recent 21‑location acquisition that management says is immediately accretive and part of ~$300 million in synergies since 2019.

Brunswick NYSE: BC reported first-quarter 2026 results that management said came in “significantly ahead of expectations,” citing stable retail demand, strong OEM ordering patterns, and continued market share gains across the portfolio despite a “dynamic geopolitical and tariff environment.”

First-quarter results and demand backdrop

Chairman and CEO David Foulkes said global and U.S. boat retail unit sales were “approximately flat” year-over-year against what he described as a relatively strong first quarter of last year, while premium categories outperformed value. He said the company has now seen “the third consecutive quarter of improved relative retail performance,” which he said increases confidence heading into the core selling season.

Brunswick posted net sales of $1.4 billion, up 13% year-over-year, and adjusted EPS of $0.70, up 25% versus last year. Foulkes attributed the results to “continued market share gains, strong OEM demand, accelerated new product and technology introductions, and disciplined operational execution.” CFO Ryan Gwillim said adjusted operating earnings rose 15%, helped by higher sales, mix, improved absorption, and cost management that “more than offset” incremental tariffs that were implemented after the first quarter of last year.

On retail trends, Foulkes said early-year volumes in January were strong and then “stabilized over the balance of the quarter.” He said it was difficult to determine any direct impact from the conflict in the Middle East, but noted that if there was hesitation, it “likely impacted the value buyer more than the premium buyer.” He added Brunswick’s retail performance in April was up compared with April of the prior year and said the company was “encouraged by the start to the second quarter.”

Inventory and pipeline positioning

Management repeatedly emphasized lean and healthy channel inventory. Foulkes said global boat pipelines were down about 2,000 units versus last year and flat sequentially versus the end of 2025, which he said reflected deliberate wholesale-to-retail alignment. He also said Brunswick’s global boat order backlog at quarter-end represented 71% of its second-quarter wholesale forecast, up 6 percentage points from last year.

In engines, Foulkes said the U.S. outboard engine industry grew 6% in the first quarter, while Mercury retail units were up about 11%. He said U.S. outboard pipelines were down roughly 10% versus last year and flat sequentially, again pointing to wholesale matching retail.

Segment performance: Propulsion, P&A, Navico, and Boat Group

Foulkes said all segments delivered year-over-year sales growth for a third consecutive quarter, with operating margin expanding across the portfolio except propulsion, where the company said it absorbed most of the first-quarter incremental tariffs.

• Propulsion: Gwillim said propulsion sales increased 17% year-over-year on an improved market, share gains, and strong OEM demand. He said adjusted operating earnings declined due to “planned accelerated investments in product development” and incremental tariff impacts. Foulkes highlighted Mercury’s global and U.S. outboard unit orders rising more than 15% versus the prior-year quarter and cited “record” outboard share at recent boat shows, including 60% overall and 80% “on the water” share at Miami and 70% share at Palm Beach.
• Engine parts and accessories (P&A): Gwillim said sales rose 14% on growth across products and distribution, supported by “healthy early season boating participation” and share gains in global distribution. He said adjusted operating earnings rose 24% and adjusted operating margin improved 140 basis points, with 27% adjusted operating leverage in the quarter. Foulkes added that Land ’N’ Sea increased U.S. distribution share by 150 basis points.
• Navico Group: Gwillim said Navico sales increased 7% year-over-year and adjusted operating earnings jumped 64%, with adjusted operating margin up 280 basis points. He credited “product portfolio optimization, operational improvements, and disciplined cost control actions,” which he said more than offset incremental tariffs. Foulkes and Gwillim pointed to recent launches, including Simrad NSO 4 and B&G Zeus SRX, and noted Lowrance ActiveTarget 2 XL received an innovation award.
• Boat Group: The boat segment posted 6% sales growth, according to Gwillim, who said it was driven by higher wholesale shipments aligned with stabilized retail conditions, favorable mix, and momentum in business acceleration initiatives. He said adjusted operating earnings rose 63% and adjusted operating margin expanded 130 basis points. Discussing category trends, Foulkes said the company saw strength in Lund and Harris brands and described softness in saltwater as being “more in the value side,” while Boston Whaler was up year-over-year.

Freedom Boat Club expansion and new products

Foulkes highlighted Freedom Boat Club as a fast-growing recurring revenue business, saying it continues to expand boating participation and drives “extensive synergy sales” across Brunswick’s portfolio. He said those synergies have totaled approximately $300 million since Brunswick acquired the business in 2019. He said the location count has grown from 170 to 446 global corporate-owned or franchised locations since acquisition, with four new locations added in the quarter.

Foulkes also said Brunswick completed the acquisition of “the largest remaining franchise club” in the Freedom network serving Greater Boston and Cape Cod. He said the deal adds 21 locations to the corporate-owned total, includes a maintenance operations center, and is “day 1 accretive to earnings.”

On innovation, Foulkes listed several product introductions during the quarter across the portfolio, including the Sea Ray SLX 360, Boston Whaler Outrage 330 and 290 models, Simrad NSO 4 with Neon Android operating system, Mercury’s keyless engine start system and an over-the-air outboard performance upgrade, and Fliteboard’s Race model. He also said Brunswick had secured nearly 50 awards through the first quarter and was named to Fast Company’s Most Innovative Companies list for the first time in 2026.

Tariffs, guidance update, and Investor Day

Tariffs were a major theme, with management describing shifting policy mechanics and uneven timing through the year. Gwillim said IEPA tariffs were repealed and replaced with Section 122 during the quarter, and Section 232 tariffs on steel and aluminum were amended more recently. He said the net effect was positive, and Brunswick now expects full-year incremental net tariff impacts to land near the low end of its prior $35 million to $45 million estimate.

Gwillim said Brunswick raised its adjusted EPS guidance to a range of $4.00 to $4.50, citing the lower expected tariff impacts and first-quarter outperformance, while adding “some cautiousness” given macro uncertainty. He said guidance on sales, margin, and free cash flow was “materially unchanged.”

On potential refunds, Foulkes said Brunswick has started applying for IEPA tariff refunds, estimated at about $50 million, but emphasized they were not included in guidance. He said the company expects to recognize refunds “as we receive the cash,” with some potentially arriving over the balance of this year and some next year.

Brunswick also reiterated shareholder returns and capital allocation actions. Foulkes said the company repurchased $20 million of shares year to date and delivered its 14th consecutive annual dividend increase.

Looking ahead, Foulkes said Brunswick will hold an Investor Day on Aug. 11 at Mercury Marine’s headquarters in Fond du Lac, Wisconsin, featuring a facility tour, on-water experiences, and a Q&A with senior leadership.

About Brunswick NYSE: BC

Founded in 1845 by John Moses Brunswick, Brunswick Corporation is a global leader in recreation products. Headquartered in Mettawa, Illinois, the company has evolved from its origins as a billiard table manufacturer into a diversified supplier of leisure equipment, serving both consumer and commercial markets around the world.

Brunswick operates through two primary segments: Marine and Bowling & Billiards. In its Marine segment, the company designs, manufactures and distributes recreational boats, outboard engines and aftermarket parts under recognized brands such as Sea Ray, Bayliner and Mercury Marine.

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