Brunswick NYSE: BC reported third-quarter 2026 results that exceeded its expectations, with sales rising across all reporting segments for a fifth consecutive quarter and adjusted earnings per share increasing 63% from a year earlier.
Net sales increased 7% to $1.5 billion, while adjusted operating earnings per share reached $1.58. Adjusted operating margin expanded 230 basis points to 10.1%. The company generated $140 million in free cash flow during the quarter, up $29 million from the prior-year period.
Chairman and CEO David Foulkes said the results reflected solid execution, higher sales, favorable product mix, operating efficiencies and the anniversary of prior-year tariff impacts. He said Brunswick's premium and core offerings remained resilient despite pressure on consumer confidence and discretionary spending among value-oriented consumers.
“Our premium and core focus portfolio continues to be resilient and perform ahead of overall year-to-date SSI data,” Foulkes said. Brunswick said its U.S. retail performance was in line with the industry when adjusted for discontinued value models.
Guidance Raised as Sales Outlook Holds
Brunswick maintained its full-year revenue guidance of $5.7 billion to $5.8 billion and adjusted operating margin guidance of approximately 8%. However, the company raised its full-year adjusted EPS outlook to approximately $4.65, from a prior midpoint of $4.55.
The new EPS outlook is about 13% above Brunswick’s initial 2026 guidance midpoint of $4.10 and more than 42% above 2025 adjusted EPS of $3.27, according to Foulkes.
Chief Financial Officer and Chief Strategy Officer Ryan Gwillim said the company’s third-quarter outperformance was driven largely by stronger gross margins, premium product mix, higher-margin Engine Parts & Accessories sales, improved productivity and a somewhat better tax rate.
Management said the fourth-quarter outlook includes caution around incremental material inflation, off-season channel stocking, the timing of tariff-related refunds, and continued economic, political and trade uncertainty. Gwillim said the principal change in the company’s fourth-quarter outlook from its July expectations was material inflation, while commercial and ordering trends have remained generally consistent with expectations.
Brunswick maintained its estimate of approximately $40 million in net incremental tariff costs for 2026. The company recognized about $3 million in gross IEEPA refunds during the third quarter and about $33 million year to date. It expects total gross IEEPA refunds of $60 million to $70 million, with most of the remaining balance expected in 2027.
Segment Sales and Margins Increase
- Propulsion: Sales rose 7%, including a 7% increase in outboard engine sales and a 9% increase in controls, rigging and propellers. Adjusted operating earnings increased 51%, while margin expanded 350 basis points to 12%. Brunswick said higher volumes, favorable mix, improved absorption and reduced year-over-year tariff pressure outweighed product-development investment and inflation.
- Engine Parts & Accessories: Sales increased 5%, supported by boating participation, distribution share gains and broad-based regional growth. Adjusted operating margin increased 190 basis points to 24.6%, which Foulkes described as among the segment’s highest margins on record. Land ’N’ Sea’s rolling 12-month distribution share increased 120 basis points.
- Navico Group: Sales grew 6%, with all three business lines contributing and marine OEM sales recording double-digit growth. Adjusted operating margin rose 140 basis points to 6.1%, aided by higher sales, footprint consolidation and SKU rationalization. The company said Navico’s second phase of Ensenada capacity came online in early October.
- Boat segment: Sales advanced 9%, led by a 30% increase in saltwater fishing, a 13% increase in aluminum freshwater, and 14% growth in the Business Acceleration portfolio. Segment adjusted operating earnings doubled, and adjusted operating margin expanded 160 basis points to 3.6%.
Brunswick said global boat pipelines declined by about 900 units year over year, including a reduction of approximately 700 units in the U.S. U.S. outboard engine pipelines were down 3% from a year earlier. Management described dealer and OEM sentiment as stable but cautious, noting that most dealer partners have more than half of their credit capacity available.
The company retained a 46% U.S. outboard retail share and reported wholesale share gains, including repower gains. Foulkes said Mercury achieved 67% overall outboard share at the Cannes boat show and 82% share at the show’s Vieux Port location, which features larger premium boats.
Boating Participation Supports Aftermarket and Club Operations
Management said fuel prices have not materially reduced boating participation based on the company’s internal measures. Freedom Boat Club member trips increased 3% year to date, while the business captured an estimated 69% of the North American boat-club market, up 4 percentage points.
Freedom Boat Club represented roughly 13% of Boat segment sales during the quarter. Foulkes said Brunswick is testing programs that allow members to apply a portion of their Freedom entrance fee toward boat ownership, though he said most members appear comfortable with the club model.
On pricing, Foulkes said Brunswick took moderate boat pricing during 2026, generally in the 3% to 4% range across product lines, and recently implemented a “couple of points” of pricing on outboard engines. He said the company expects similar moderate pricing actions next year, while Gwillim noted that changes in average selling prices also reflect a shift toward premium products and away from value offerings.
Leadership Transition and Capital Allocation
Brunswick repurchased $75 million of shares year to date and retired $100 million of debt. The company increased its full-year share-repurchase target to more than $80 million and said it remains on track to meet or exceed its $160 million debt-reduction target for the year.
The company also reiterated plans for a leadership transition. Áine Denari, currently president of Navico Group and Brunswick’s chief technology officer, will become CEO effective Jan. 1. Foulkes said he will work with Denari through year-end before retiring from the CEO role.
Foulkes said Brunswick’s strategy, capital-allocation priorities and long-term Investor Day targets remain unchanged. In discussing 2027, management pointed to continued pipeline rebalancing, new Mercury outboard launches, distribution and repower share gains, Navico product introductions, and expected cost benefits from Boat Group facility consolidations.
About Brunswick (NYSE:BC)
Brunswick Corporation NYSE: BC is a marine recreation company that designs, manufactures and distributes products used in boating and related recreational activities. Its portfolio includes marine propulsion systems, boats, engines, electronics, boat control systems and other components, as well as parts and accessories.
The company's marine businesses include Mercury Marine, which produces outboard, sterndrive and inboard engines, and a range of boat brands such as Boston Whaler, Sea Ray, Bayliner, Lund, Harris and Princecraft.
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