BC - Earnings call transcript Q4 2024

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Operator

Good morning. Welcome to Brunswick Corporation's Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] Today's meeting will be recorded.

If you have any objections, you may now disconnect at this time.

I would now like to introduce Neha Clark, Senior Vice President, Enterprise Finance Brunswick Corporation. you. Thank

begin. may You

Neha Clark

thank this joining Brunswick's morning CFO. Ryan and on CEO; With the Gwillim, call are you morning us. for me and Good Dave Foulkes,

to our comments differ our include materially results in certain future expectations. I Before mind the about will prepared statements from Please begin that during these with would we could like results. remind forward-looking that everyone call, actual remarks, keep our

today's our on release. these consider, recent factors SEC press to and details For please filings to refer

of our All are at website on these available documents brunswick.com.

Reconciliations today's over to section During reconciliation GAAP our results. I will Dave. be are to will financial to presentation, appendix the provided accompanying the and of non-GAAP now we turn the certain this referring non-GAAP in presentation the unaudited financial information. consolidated call to measures statements of financial

David Foulkes

Neha, morning, Thanks, circumstances, and in engine which finish XXXX us product successful a to cash very expectations. enabled all fourth new characterized had slightly market quarter, year solid conclude We generation in by to our the further operating outboard recent performance of significant gains, the good XXXX, ahead full of everyone. share optimal and launches

than important have early to the single-digit towards have percent segments. fairly sales in management exiting XXXX, hand dealer shows, their partners better resulted and positioned, field boat well balanced dealer ended down with line with weeks boat which industry in inventories In pipeline. high new shifted levels slightly Our inventory retail in XXXX, U.S. season well diligent the ongoing boat XX.X of and channel date. with encouraging our U.S. versus performing year production on the expectations, prior Brunswick With premium been retail focus

to full support cost and Our continue free and capital even year in capital growth containment, cash in resulted successful initiatives. new efforts strategic continued as technologies execution conversion we flow to to invest XX%, products manage working of focus strategy on robust

$XXX of in a million XXXX. of share completed we total addition, In repurchases

some highlights our in from the segments quarter. to Turning

net As in XXXX. operating anticipated, production earnings in reduced our lower fourth versus business the resulted sales and in propulsion quarter

we achieving early However, of basis to increases outperform engine U.S. year significant at addition market XXX gained and boat share continue share points during shows. in XXXX retail to season the outboard the

Brownsburg, and operating delivered versus lower completed efficiencies the earnings business margins operational the led Our engine parts center. earnings slightly resulting quarter the from grew sales portion products in and by full distribution and the businesses year, the accessories net for Indiana fourth but prior the the year to and transition of

were and with quarter supporting sales business higher flat in sales fourth aftermarket quarter. earnings versus Season performance, and continued with third sales sequentially reduction essentially control cost which year, resulted Group together XXXX, in Holiday complexity well-received a adjusted versus versus Navico products and higher positioned the prior and solid the new net

for with boat Strong Our helped inventory while with products, expectations, in premium continuing a quarter, together to for XXXX. delivered enter demand baseline gains pipeline sales business and provide healthy XXXX. as consistent we earnings levels market categories, the stable several ensure share in

and Boat strong XXX,XXX Freedom recent its another member Finally, annual continuing had for year. second acquisitions achieving Club integrate consecutive to the quarter, trips over

and cycle-resistant added Europe, new by the business New to locations XX and its more Australia a many enabled Freedom past the convenience, in model. regions Zealand path and Over months, U.S., on add continues synergistic

external Turning to environment. the

The XXXX September, some consideration. has, the released interest seen was in tailwind for of affect course, uncertain should an which late the rate welcome season. have to season, become environment tariff be a obviously elevated which We XXXX too

we U.S. the China the U.S. exposure few of significantly past majority to and for of over have market, and benefit the our our We producing have years. in the large reduced the products

impact annualized an anticipate we rates, in tariff XXXX. current approximately million at However, of $XX

and sentiment scenarios recent base, of fairly our U.S. in range underway, facilities. Dealer a long-term for were staging pleased of solid season our including inventory of short- surveys. the have supply optimization actions improving preparing Business and see is towards Small to continued and confidence many shows. We are already with migration mitigating We shifted boat early focus most

As promotion remain their cautious patterns. model and we continuing elevated, prior channel anticipated, year particularly enter and on XXXX, products, to and discounting ordering be as are and OEMs in levels partners production

and recurring good we businesses, However, boating strong high interest resilient to is our products. supporting our fresh there innovative many revenue new acceptance continue participation, see of and in

proposed Vessel regulatory agenda. Finally, North Restriction the recently from Atlantic Right Whale the previously withdrawn Speed rule was

declined U.S. outboard retail industry. performance. Moving Marine units a with outperforming Mercury U.S. now full versus prior retail on engine year, industry to X% industry basis year the

delivering As Marine share share, engine gain XXX continues market Mercury points outboard U.S. full to increase year. basis for of the mentioned,

have pipelines of fiberglass We full hand, XX.X was environment below on retail historical that pipeline XX% weeks inventory U.S. both levels. the for single and were premium managed wholesale leading finished digits, shipments diligently healthy to levels a in year-end year, down well high down

Before to of adjusted I share. guidance year between it to turn Ryan, wanted EPS through our and components $X.XX the I full XXXX of over per walk $X

which half illustrates believe volume there primarily of unique the we will moving earnings factors more our In the grow many current influence we'll aware, the are As result that as that some have profile of our control, back year. control. earnings this several we of areas direct are This a pieces. view in the outside with over year's you bridge of additional

share. of benefit cost efforts which significant reduction $X the have of by be we will $X.XX addition, anticipated underway approximately per compensation partly offset share, per an with In variable reset

the impact moment. dollar through The split can rules our reflects The for purchased certain operations. the versus lines, predicated but in including markets to product primarily U.S. current roughly from and combination not about of we'll share our the non-U.S. offset and believe U.S. as base impact and which impact headwind transaction rates, in Euro, more will per full impact. product of we Peso, on several $X.XX of our evenly. Ryan The currencies, just Real further this a creates be a able results offset under of others estimate tariff pricing the We losses and speak rates businesses foreign strengthening exchange partially tariffs

I'll Ryan to call outlook. comments over our and to turn performance additional provide the on financial now

Ryan Gwillim

everyone. down by quarter and in market. operating sales of good quarter increases higher continued net the slightly due segments results discounts marine margins below of quarter retailers, morning, and exchange prior to by Dave, Brunswick's ahead of lower were with rates changes U.S. fourth and were products. remained X%, fourth retail OEMs Thanks, the in with an adjusted XXXX, in but continued impact EPS expectations, the foreign were new prior only as of production XX% coupled unfavorable well-received sales Fourth in select annual $X.XX. adjusted of and year year were resulting wholesale quarter below offset ordering Versus the challenging price and currency partially dealers,

Adjusted quarter sales versus the partially absorption and and cost operating of lower from offset lower production earnings by margins from resulting of ongoing levels, net declined XXXX decreased control fourth the impact efforts.

history. for the of fourth Lastly, Brunswick's we million in generated in record quarter cash fourth any quarter, a $XXX free flow

entire QX margins of steady versus top-line than were reducing On costs. of softness, a operating of even impact of absorbing full of acquisitions enterprise strong basis, the remained XXXX a The were after XX%, in sales flow cash cash diluted XX%. while remains focused on expenses controllable year our flow as levels performance the which target Gross $X.XX, down XX%. full EPS X% is resulting with X.X%, adjusted operating despite adjusted free XX%, free above down conversion in the margin resulted year down more annual

at which the we'll share in for measures. XX% partially reporting efforts gains should sales absorption continued impact our material U.S. each lower earnings its half XXXX, field XX% pipeline lowered allow down in XXXX. business, saw second with due in sales decrease which offset partially and moderate together and offset inventory over year propulsion from outboard year, continued engines. by market higher in U.S. in by of units prior the declines, the inflation, engine in starting Now look were control operating XX,XXX a with segment, by resulting cost of improvement Mercury Segment to below labor wholesale to the rates production

accessories down expenses. lower impact operating adjusted domestic led as earnings pricing were impact declines slightly inflation, only higher sales engine by segment business and offset slightly material markets, higher the more quarter. offset from another were sales of sales solid Our the sales lower the which Segment operating by partially in while had international than and were parts impacted aftermarket certain and

in intangible and by than of offset net result resilient the period OEM the despite as declines full sales the slight quarter, RV in XXXX yet decreased this the versus Group year, strong performance manufacturing third Indiana, Brownsburg, in engine cost control sequentially of our Navico of measures. had experienced improved business. Navico versus quarter operating Note ongoing adjusted control the generated benefit of another the charges, importance the by net P&A mostly grew sales impairment business. weak Operating adjusted business more expected, primarily earnings retail a recurring aftermarket softer and new of in the aftermarket state-of-the-art transition measures. orders a the the segment flat same the efficiencies slower essentially that, the aided which asset quarter, higher sales to in as as high-profit by the completed facility the sales cost offset business our earnings conditions, annuity-based reminder and earnings which were result continued and and the the environment marine as For

lower from levels. the the offset earlier operating dealers net levels, delivered Similar coupled of production of which boats with XX% Finally, continue from inventory, on to fourth quarter, U.S. and pricing contributing year taken did with year. another as the orders pipeline Boat XXXX, reduced and sales the the Group Boat consistent with field the XX% our approximately our an than levels levels favorable lower production my reducing our declines and managing absorption higher of strong below Segment Boat anticipated more in earnings excellent decreased to and X,XXX earnings quarter, segment. in Club job sales resulting adjusted sales the to over actions many quarter resulting of manage wholesale mix across by declined fewer impact operating to the due finishing year XX% discounting pipeline. Sales comments brands. the business Mercury, selective had full in softer production also of planned Freedom

in earnings revenue We and which growth. $XXX growth ending capital returning across growth businesses successfully executed believe our projects million in the and $XXX exciting our businesses, deployed We will for shareholders. while drive future expenditures products funding cash on and strategy to million strategic with new year we XXXX, our capital of capital

of X% Brunswick's advantage shares, and or as representing $XXX value addition, the dislocation our X.X of of In and company. own share Dave we repurchased market million approximately mentioned, took million shares

for also dividend We consecutive increased our year. the XXth

we $XXX working a XXXX, reduction generation net XXXX, by end reduced result when the versus inventory XXXX will levels second year of throughout capital million discuss a you of XXXX. half over XX% similar Lastly, shortly I anticipate was in benefits as guidance. see with continuing into and The

outlook a has the strong at financial in for conditions. flow delivering while the resilient on year, share, steadily continued of with look our outlook, extremely free and resulting per steady we entered first returns. XXXX remain earnings easing year to year shareholder cash potential the for As quarter, we we focused be the cautious particularly And

a performance environment. and and pipeline thoughtful containment in consumer the growth, and necessary prudent products business strategy strong levers this strong new provide management cash investment operational in cost and disciplined capital management, actions, and uncertain with generation, coupled Our controllable continued

of the $X.X is and by sales conversion. in we on result improvement and of Dave as with we to billion and flow net $XXX in excess patterns wholesale $X.XX slide, the this completed $X. reviewed flow billion EPS We guidance between including see adjusted looking between cash strong anticipate Note of very cash free the The diluted quarter you $X.X free as fourth ordering million QX progress anticipate throughout just with similar that year. continued earlier,

market is to this this retail units XXXX in retail for guidance flat terms assumption market U.S. a boat underlying sold. of Our

morning good are assumptions working most this assumption our consider quick market to capital million We reasons guidance. capital, with similar be We approximately believe expenditures net annual a our spending work but continue on to inventory guidance. I'll a throughout believe on underlying that we continuing depreciation could that prepared plan and we on generate moderate anticipate will XXXX levels my to to $XXX the started flat initial end levels. and assumption We review flow cash which to our the to building other in there that year, this believe outperform as XXXX. of remarks the initial P&L base on balanced

with of million advantage our outpaces we price outlook. plan could repurchases minimum completed taking Our done which January, repurchases share have assumes we in $XX that of increase the that event already of dislocation year, our expectations. Note, recent value cash share and in the generation repurchases million of a between significant initial continue in future systematic our our $XX

Our guidance and will of existing assume XXXX, China on the incremental of drawbacks year. benefits million $XX from duty catch-up result to in certain and primarily of XXXX expired were or a absence tariffs $XX in this million exclusions XXX tariffs that and completed not repeat tariffs

actively to laws mitigation overall staging, tariff impact enacted we'll be the methods, the should and pricing tariff be and are working new ready to inventory We mitigate throughout other through year. accelerate efforts

unfavorable assumes million impact fluctuations, U.S. impacting dollar our rate in As to primarily strong due continue operations. the to we million currency see our earnings to guidance $XX foreign $XX non-U.S.

as Finally, meaningful managing is in XXXX. have been due structure, a reminder, coming no our positioned we with which and diligent very until debt debt just well

pass I Dave call now remarks. will the back for concluding to

David Foulkes

Ryan. We've excitement concepts. commercialized early York, boat in early Show shows, major unit shows positive and year. generated our our prior products, across January, from Brunswick's and consumers are sales all the versus and upcoming momentum showcased where New boat boat extremely dealers seen Dusseldorf, with season Toronto Consumer full including XX% year Year-to-date, enormous sentiment of the exhibiting Minneapolis. and the up Thanks, new and aggregate portfolio at at Xth also Intelligence ACES Electronics and already technologies by Boating We're we pleased

premium strength than extend show, At Boat see interest largest including indoor and sales, which Quicksilver, Dusseldorf our We more world's buying to XX% had surpassed the record brands. which unit Ray, of the last year's boat consumer several core Show, total across were and versus encouraged brands tripled prior Sea the record our sales year. and by

Dusseldorf, a share at XX% multiple outboard share had also shows. start Mercury the to has Mercury in from XX% increased dramatically to robust XXXX In very gaining season, show overall in XXXX.

outboards, had than new share was the and At Mercury's share XXXX. Mercury and a outboard-powered Toronto larger present XX% XXX-horsepower above reaching boat were show, and/or from XX% every larger outboards up XX% X in For on just up outboard meters. flagship also under significantly, Mercury

on more had Group Dusseldorf a XX% of also display. Navico technology on strong than Show its with boats present

Navico our began new new Elite our will recently Lowrance across We freshwater fishfinders, Miami shipping and ultra- new version and applications, of its product the its rapid trolling operating respectively. from uses cadence based for unique Android most continue under exciting fast and FS Lowrance new launches the of shortly will its businesses brands. shipping motors Simrad and Group system begin industry-leading Recon At advanced ever which multifunction display, brands Simrad saltwater show, the processor. upcoming its latest a and launch

V-Series of recently new domestic the Bayliner and to continues points show. products hybrid the the Our customers price Ray needs SDX the Dusseldorf all XXX at surf Boat and at Business introduce outstanding and boat meet launched to new international Sea

is recently with New distribution in partner, begin Freedom Spanish and partnered into Boat Madrid. locations expanding opening Zealand to our Touron Club

supply for exciting In and its recently and system, propulsion Brunswick's addition a partnership autonomous products edge a the and Mercury announced Simrad vessel leading U.S. ability with Tsunami new paired utilizes Brunswick of to radar Brunswick autonomous unique with solutions. recreational to marine navies. is vessel control Textron's Textron allied The of markets, example our for system and hull, surface produce slate a solutions system another to Systems

we and products surpassed And our being people, an Xrd employer ourselves pride know, all trustworthy choice in for and awards for we space innovation. a on the again an our company. on our consecutive XXX innovator culture, on responsible and of our our you year, As being being

Companies. highlight awards our Best our of in XX% the Midsized and awards America's Today, Time engineering One Notably, in in and as are such of manufacturing XXXX USA Newsweek, Magazine's Time national from #X list being outlets ranking Forbes. category

January XXXth the our cross XXth listed on the York New Stock Exchange. on Finally, Brunswick anniversary XXXX, celebrated XX, milestone. the XXX-year of the is company currently listing we to

our remind by a exhibits cocktail investor hour the and Brunswick's to of Miami a Show, at the Ritz-Carlton. about I events analyst during at upcoming many I'd the followed including Before like tour Boat you finish, show,

now questions. you line We'll the for attention. your for open Thank

Operator

[Operator Instructions].

Our Kennison from first Baird. Craig question with is

Craig Kennison

you your us I savings. wanted to ask unpack Can about in help cost that $X.XX cost you savings that mentioned, EPS bridge Dave. the

curious from? where coming Just those savings are

David Foulkes

places, Yes, really. Craig, question. thanks of number Yes, for a the

is XXXX. base it you generate even of the if of really run think savings I rate of in -- that kind began we kind to

in to clear XXXX of December, our had of of XX% support year-end If that the staff. inventory it when about back reduce that The unfortunately X% levels January majority you and that Xst we half look salaried our staff year go production levels to exit happened XXXX. of XXst needed from we of we had hourly of the to our to was to into about

So get year in is rate XXXX, significant. a of we'll savings which those run full

about underproducing thing it were is half pretty other significantly XXXX, in process. to a of that as is of inefficient back we think under The kind the retail

levels. So in I but we only thing to produced talk producing did engine I could think We business. think, done Ryan significantly business That job boat it we in low units, the about our good really were at have about we our we a an underproduced certainly do. XX,XXX is will and but that retail best job, later, elsewhere. in maybe inefficient circumstances

always labor. You've much got too

there's not that of retraining time. modest your in too of got reoptimized rates, shifts, are possible many or amounts production period possible lines You've retraining always what no lower

that FX, much go course really, more headwinds position. potential we But face of things into which to benefit In go going the our in are of XXXX, highlighted production lines. a suppliers operating we the On go throughout year. and year. as a cost we'll back correctly, cases, we a set staffed other optimized after our big we able of very lot reductions. ways, operation reoptimized that, additional in tariffs of a of efficient doing and a So We're been we've top we but negotiate is into during up we be XXXX, with as lot some the the with

Operator

Our Securities. from Mike Truist next Swartz with is question

Michael Swartz

enacted so, about Maybe out that just of I that come? more detail. then I versus some following think And maybe in how costs of things structural million things is $XXX to see on or of been volume a question, already guess versus that the returns? temporary for $X.XX, guess little those up from which I how have back Craig's when maybe much where mean of works is nature much we'd I come

David Foulkes

and for Yes. I don't XX-XX... complete Ryan have I a probably that, but just about number would

Ryan Gwillim

Yes, above...

David Foulkes

Above XX-XX probably.

I all, we coming your how operate to first efficiently. back, of think learned costs more

And amount lot production the probably we that So supply make really of back in even our yield of I underway certainly fixed lines fixed year. XXXX during costs of variable and can are us that imagine benefits to either. how benefits reluctant are think XXXX. chain efficiencies cost operating more already we kind yield plants have and cost back projects efficient. didn't will in not there that where back yielding in projects, that that of or cost combination of are adding a in will But not XXXX in depend a obviously do XXXX they're and material we the always we anywhere, add progressed on lot add I volumes a

of of after year half of XXXX lot things. operational retraining going For were work, at and multiple some of reduce a products kind and and example, will boat a be the a example, those facilities our our of other over we the functions year the we not for go of to We're line, onto the and of value the or products. back year. engineering we'll on during That focus shutdowns engineering which significant in able combining the until do single will course things undertook production course that through our be certainly COGS

behind speculative. Every it. that So are has that projecting cent we're $X.XX savings not of a these plan

of you we're do, like, going we is if already but Some in to our pocket, significant it work know what but to there's do.

Ryan Gwillim

Yes.

Just other comment. one

will in lot hearing I from Dave, the a you're found think these gross of be margin line. this

not are these all So OpEx.

bit surprise that can we a already towards fact, even weighted and add which on efficiencies little gross In we've in probably the item. we be given out margin P&L margin, believe taken back should the line a the all gross OpEx

Michael Swartz

question range. would another midpoint. I That's assume Okay. I and guidance helpful. retail that pretty And expectation think a said just the It's the range. you is at And wide on your flattish. then maybe the guidance

well? end maybe get that and low help So range would maybe could get that end the how just how you us of the you of understand high -- range to to as

Ryan Gwillim

back been is chunk. And in then below, more versus if The for big something weaken with probably where constant already doesn't $X -- digit Mike, were we've I'll end it a to be of and also China be it But be high $X.XX no would Yes. is to range that the outperforms of up. XXX would XXXX, are be that would would would straightforward. got now all materially that a follow need more start. I'll it would can flat, if FX of I to to the need low relatively say in, need baked doesn't think but dealing Again, improve incremental a normalized outperform back we to then XXXX, what greatly. doesn't the it levels. that a tariffs we've take start, that tariffs number It of The it $X.XX which things dollar certainly significantly. mid-single got Dave or years. include a up, good to of outside I that kind market continuation

it's to definitely $X. market a China the and into outside -- places even opposite. potentially worsening would no potentially and/or a things be it's Canada or you those X have The is factors. can all of it's You the kind case like $X.XX improvement or $X Mexico in and if rates It tariffs through, other that's or of come more worse down get FX

can a it's uncertain the We So I time. used wider things we're that of than to, folks know we dealing with control. very we're But range bit well suited. pretty a a think but all obviously

most throughout in to react on have are year. so to just flexibility of the guidance things the that to And the we're going

David Foulkes

Yes.

subject this our uncertain on mitigating Mike, also, think mitigate taken working on XXXX. that's a the on of to we to this optimization There's actions, already of tariffs, I have significant replacement ahead supply base. with of environment inventory, lot including gone impact, certainly in

Operator

next Our is with from Wightman question Fred Research. Wolfe

Frederick Wightman

Just it you the of X in? or or the a look what if the the at or ramp you If it's the we one plan you back that where put shape was have changed into this sort been and the has sort there, is given just destock I'm consensus numbers quarter sort the where below the of penciled the of versus more guidance. on of thought out sort of XQ cadence was a year always ongoing was. bit half sort if would of it wondering

David Foulkes

I it is in a we're at and the say math, it. material change it's confident wouldn't our very moment. really I long Yes. mean in assumptions a

shows I early well, anywhere. -- season but are boats not baked positive, that's think QX boat in broadly,

at a first point this and of business XXX,XXX was the QX confidence supporting year were last most in about incentives still units of year, think quarter. Dealer you a Market capable was lower. were up much If the relatively through running good. Retail year. actually we

believe margin levers of on lot side, course for I operate We're a take a have we think of bit we growth have hit year, year top-line the during just but this in reason even a good -- we -- kind will will some more of certainly QX. in we efficiently the market. this a have that we So flat to every

Freedom, expect Group, Mercury We gains. from growth Navico share from from

and underproduce and the -- of year as of we least our last rightsizing we took the significantly QX at and So pain efficient in we're market inventories. course, QX

growth to operating in the and achieve we better, areas the in to select expect more So of just back some efficiently much year. be half

Frederick Wightman

mean, That share years. just makes just shift maybe upside few like sounds where to been sense. have million, good there a you that? past And in about Can running it's gears behind think I a that? to should could bit but how then guys from bit thinking some down to It be you the explain the $XX we that repurchases,

Ryan Gwillim

strategy our balancing needs opportunities. and we're Fred, Yes, all capital of

as but I probably want trough think year, that the as is that of first cognizant to XX TTM back earnings. last year leverage. we to kind this a point fair out, baseline, the our of trough you a together correctly basis, say watch on we're of much with it's we half half debt Obviously, earnings, very believe

to And lowering sure We've some take some currency some debt utilization done action. cash well, on smart a of here got swap advantage work about fixed rates. to year. of been the we're so as USD the just We've to making bit smart that from off. debt floating we've in little early on paying Euro so We some flipped

So cash-oriented. we're everything being smart about

that but a and good to January debt in the and cash landing we'd January. still the be able to year be again, cash strong, that in kind I I if over you our to XX continue think service back can and of final X significantly of continue and over still sign And expectations theme assure the if and of trend January I do should has repurchases spot, tell month will continues, be last that not appropriately. continued half came XXXX can

Operator

Hardiman from is question with next Citi. Our James

James Hardiman

environment better confident expected. and months then in was ways, those than different the were grow months earnings incremental? of which an what's just little certainly seem we're I been at still some to pretty just midpoint end, already high X asked that what's you but figure Maybe channel think then That's put XXXX versus maybe months where the as versus bridge, of to table the would bit ago look trying to some at trying quarter I'm versus that you those the these 'XX. are changed fourth I'm question lower. I X asking which still pieces. future? QX, together maybe slightly for ago, about foreseeable seem confident a X the I if So ago, I guess curious, baked on of or And pretty is the guess in fully out of least are we Just already undershipping at

David Foulkes

yes, more significantly probably, is I the did really to want that one thing over James, Yes. X so if isolate change changed past it you has months. FX, think significantly

were and you headwind, not significantly were put budgets midpoint. XXXX would year as we above as absent have us which for So of we additional guidance, FX mentioned, that of midpoint planning the that prior our anticipating EPS $X.XX as

Ryan, So do that's change, the wanted to... you biggest

Ryan Gwillim

James, wholesale the on underships plan then question back versus of is that the and the of retail, right wholesale the currently half over moderates year. retail flips now And Yes. your first in in the a on half yes, year.

to Something our remember historically and and businesses low. in the was engine production XXXX primary back wholesale and for boat of half everyone,

engine the So we the at result was half back -- did any and the year and purposeful the control in wholesaling the -- we boat levels second that took half level pipeline, below inventory in years. actions of in to was actions significantly

still to half it low XXXX, historically at look since relatively back looks lower. of a that And of performance back loaded. other back that to any looks half roll understand is back XXXX half you But our of if And half say so the you a actually and year conservative if second 'XX little XXXX, forward the of year half and we against and versus 'XX. this guidance

year, did So half pause need us set making to we of back in to year understand the in really up. what it the mind we people after keep but the last shape of you

James Hardiman

wholesale on retail versus staying conversation. maybe then And that it. Got

So hand going those back overall assumption the think inventories the normalized And then to you should years that do where how sort the finish down think back about maybe number, are come, during retail when where to Presumably, to wholesale recovery number levels I half of first to you're in bit get about equal this hand to about you've volumes getting year? you year, undershipping that the them talked How difficult a little low. on want Is we expect right? keep the in that weeks is undergrow it the be? will as that XXXX? to weeks in to of

Ryan Gwillim

Yes, right. you're

plan the side. on outpaces Our be and more -- even right retail still on the the would wholesale side now engine so boat

assume both and in that greater engines than year. are units in both of last those still However, wholesale

David Foulkes

end is been would an XXXX. where And we of weeks range. The plan we XX And such with in really hand on XX.X might historically versus a have our the XXXX weeks current in really, hadn't significant on action if the for than hand was we normalized year taken end on QX. lower the overachievement weeks

unit on remember, very, a really a and on basis, certainly, low. -- unit So fiberglass very low our we basis. are pipelines still historically are And

Operator

Megan question is next from ] Our [ Alexander Morgan Stanley. with

Megan Christine Alexander

me. follow-up couple of for clarifications a Just

you gave answer So wholesale on on that to just James versus retail.

than we on think I And I you talked could imply mid-single-digit mid-teens. help previously volume in just more still you'd Is October, the when maybe a expectations. us tailwind. is now? retail bridge something And embedded in back about said, what's Or back that year think the full of based a that up guide? what you base there can flat just from talked unpack the half case

Ryan Gwillim

Maybe retail on U.S. our the to to it's flat real going Retail well, That in the is No. so our believe clear, U.S. be is I -- should be we plan in flat just say, based

boats good up to in reasons will there's of digits think to be real will digits mid-single last I that, year. be it wholesale could be up think some and top we over than mid- units think On on but engines better high basis. low wholesale we flat is single that, to a think

the that is in a market are flat on units environment. those plan the embedded -- So wholesale

Megan Christine Alexander

us maybe and could us $X.XX. can some tariffs, embedding you that the then the on with what just and And around Mexico what if that mentioned look at on clear. exposure share And the maybe you I not, to can think there's you like? put you're some of end tariffs the low range, possibility embedded Very there. Any Okay. $X.XX, incremental remind Canada parameters

Ryan Gwillim

guess covered I'm be there. things rates the But going think I and former. are I'm there. do trying to to China could we've not what the well. Sure. latter, the out pools tariff Obviously,

impact. year I past China move will So current

Mexico have the is about [indiscernible], full and to X%, the you a at we Boat is about in couple U.S. Canada COGS, over points, you even our outside speculative of $XXX our and include at or attributable of than Group in and segment so our XX%, our U.S. is X if XX% comes value a [indiscernible] look our Navico. and just Mercury originates tariffs, million If from actually that, less under China Of into operations.

pretty of EPS a So implicit the you tariff any for the Without actions Dave again, amount see to the the full impact giving small could that area. specific that hard potentially you're in the from something number, because could many covered COGS happening, that in year, at we're case taking still it that to doubles tariffs. be speculate. as so is worst earlier, be consider would to prevent But worst $X.XX case hard

manufacturer U.S. are in where produce products that internationally in we again, we selling places, So location and region. U.S. or the primarily we a U.S. in that many sell in

monitor, tariffs come we business as operating of best can and them. we're the continue around and smart ability. new to continue so But do being our rules play, mitigation decisions our about until into best is as consider something And we making

Operator

Raymond with is Joe question from next James. Our Altobello

Joseph Altobello

ask I want outlook 'XX. for to industry the about

least have off rates you like, consumer rates But Fed You looks the the not all low here. And mentioned interest since cutting flattish, side, rates. obviously come heroic potential the mention a at tailwind. overly did at the down starting on it of not base as

are into environment you rate that of sort baking flattish what industry So outlook?

David Foulkes

not. Yes. loan both even have re-elevated Joe, mortgage have rates kind actually, though rates of

that most of So end like X.X%, kind boat X.XX%, going at quarter third maybe of paying through in we on X.X% year, something X.X%, the now X%, is reasonable the kind last with a that. you credit of environment the were above people or maybe look were of the That if loan.

that the of have rate like in been -- loan we reduction period not reversion some rates retained has seen applications unlike have a in mortgages. what the over and any So seen material the in some of

We some over edge down time. that more probably expect to

looking that So that's the really rate at. we're

And was these kind a lot year I year of into people the rates, the in of interesting historically small an of a There dynamic saw think season with it's of to opportunity back the for our think at have sidelines and interesting would the but interest combination go early lower tailwind, in those QX of as some at shows. really stayed they for and as of it combination terms on a factors as reduced, We a were But rates. who maybe the see discounts things that of I X boat where of one that -- high real or in. tailwinds loans last interest get available a is combined with the we in at end of that's looking certainly boat promotions probably I years business, X.X at year. looking versus along other bit were we're us. bullishness as factor rates the more

Joseph Altobello

$X.XX assumes shares you it Very helpful. flat share to or EPS a additional over piece, your gains, are it. for in engines? volume Does Got to were bridge switch the also market. market the that flat just anticipating particularly Maybe assume 'XX,

Ryan Gwillim

price be our gains there's like labor is here. then also we'd for other material remember, there's inflation Mercury things -- premium anticipating always there's on brands. categories gains things. bridge and share continued and in many, But share could that sure you boat as this other danger put at Joe, other And overcome like will a No, many

category of a of continuing them. there's market But yes, out, being one kind market we big fully that gain share to share. of anticipate on nets other So Mercury

Joseph Altobello

year, assume a this like this we'll bridge it Ryan? Is one Or is to safe every get done?

Ryan Gwillim

like EPS last do one like But bridges. we yes, got you've feel think I in few. the our -- we

David Foulkes

out release manufacturer announced yesterday boat Finnish morning from a builder out It's came competitive that press look to should for Finnmaster Mercury. from you a this outboard interesting. pretty switch a Joe,

Operator

next KeyBanc Noah Our from Zatzkin question with is Capital Markets.

Noah Zatzkin

Navico, couple a large on guide. a on range year-over-year the a in just obviously, it's fairly Maybe percentage basis,

think have in restructuring there for this fairly quarter. And about right range charge go large So to year? noticed just the trying you what in that and relatedly, come towards to the growth of a higher I fourth what guys there's end needs some to

So and charges wondering how more when many types those move we expect you'd those? quarters of past kind of maybe can of

David Foulkes

Yes.

So good question.

It's topline. look Navico to our was think on interesting year was the it down in XXXX X% to a full performance, interesting P&A basis, in see it back I about

of that XX%, rebaselining it you'd which mix And propulsion company the that we businesses down of is is that to and XX% Our perform. from is aftermarket. you topline of all OEM what beginning It is down to XX% were the kind really in and boat XX% XX% range. would a the on expect Navico show inventory things get as through expect essentially as other noise performing to was

takes in a to we the continue We invest probably XX% product new lot way aftermarket type kind perform that and of validation products is some in came why in expect to an to aftermarket. line. a the with to to commercialized top market we the section Navico. is will would deck new I XXXX quarter, XX-XX. Navico how products market new mostly Our my to coming products P&A And market was development did emphasized as business of coming were of the more than for are of a which in fourth flavor. time It emphasized OEM which is or are nice market on but in make business there, bit its XXXX products -- the that to more

right So for is a the big margin operate the but to invest. we continue differently show short the not improvement, term -- thing that Navico And that's could we for and while and top have product expansion, sure we in line will the longer term. XXXX, invest But make continue growth in lines everywhere. to business margin Navico competitive we to we expect

the here. think right that up. Ryan talk I onetime beginning show can is about to

Ryan Gwillim

And goodwill discount the the was change of impairment almost X, an to to from use the low is rate it really, quarter. risk-free Xs Yes, that in we took calculation. rate fundamental in the that we calculation changed the DCF the which have in going

goodwill technical outward the undergo have rate So to certainly moving test long it very we're little to future, a what in risk valuation the of predict that us charge. impossible discount years a that no again, put each business way quarter, that But confident in. situation that be, with our into the change put discount of but there's premium the which, do thus of and it, views which capture at year we change included end the risk forward. an the forecast we impairment in rate, in Obviously, but to helps the

and right now So charges have think I additional anytime rightly valued hopefully, we're view to you our soon. is take don't

Operator

with Xian BNP from next Siew Paribas. question is Our

Xian Siew Hew Sam

international the versus you on Could of remind weeks of U.S. about should where think the we and Anything us go over hand year? end that course could levels terms where the year? to dealer global in are

David Foulkes

one, Well, will XX-week plus European other the for meaningful which be is only is the XX-weeks up in European.

would combined, someone XXs. like So that. the think I in it's high probably

separately, boats the yes, fact to But because engines, always higher, logistics required that means European X with and market weeks additional shipping so the we of dealers the that the is on of ship we also are European because boats combine not together. mainly the -- -- hand stock there's the at of typically which

pretty the U.S., really in marketplace. distributed manufacture manufacture our boats Europe to a in bit manufacturing but have we Poland. We or the in Portugal either for -- fundamental of it's So all we

more inventory. So down if to shipping to we're the for just need Scandinavian up markets, example, we or Italy,

Ryan Gwillim

the change look you can Quicksilver did so that's together maybe Dusseldorf even pipeline a small year one last years especially very Dusseldorf our versus good Seeing actually Ray so and European the were customer hand number down record very such retail pretty goodness with European there that units, we'll of our doing versus end, take TTM rolling where value come a a number, those sign, Again, when on quickly. is And But well performance. thing. why it's that Show results a back, prior brand Sea kind quickly. at the as weeks at pipelines

Xian Siew Hew Sam

need and some Do helpful. That's you like super How that's stay like about that holding like promotions price still do then And of maybe And on if you're taking it. kind people it think back? 'XX? you of Got kind think to price off inflation. modest sounds affordability? in mix, increases elevated

David Foulkes

of definitely think over past affordability improved if significantly I prices, is I mean, Well, you at -- look years. affordability the Yes. is couple transaction

continue price I think moderate we increases. significantly to

kind So kind the period take the pricing that MSRP out over moderated of crisis. evening or during supply over higher even is X, in terms a the to X-year CAGR price of we advertised time, had chain of increases

back in But be year transaction total on promotional there's I would promotions, went the deflation similar a or transaction basis half into think rates the We XXXX. the prices. with that promotional assuming to rates of

the During though, some the promotions some moderate other continue of but will if that that do basis. see a just brands, course reason significant promotions to think, more develops. I necessarily of the year, not you and type prior model year Brunswick the -- And of market there out is, certainly full just in necessitated the was we to basis, year, lower. half discounts be with there how inventory the on we'll on year look brands in as average probably clear on were back a a kind need

having I we don't and more see discounting additional with inventory need of the As old. we dynamic much go into on for clear more just out this prior And of our less year, year same steady a than to same the incremental XX% production than see don't balanced, year. I have pipelines. model

Ryan Gwillim

of That's down. -- not interest the be And down. the wholesale going and will SOFR because whole component just

Xian Siew Hew Sam

Super Great. helpful.

Operator

next with Our from is Morningstar. Jaime Katz question

Jaime Katz

it like to of as maybe about hear is the intensity lot this to CapEx growing than a closer at think the to were closer forward at new X% X% robustly? the more sales maybe businesses rather that looking Is about rate? run right going we of that program to It your the business But looks I'd looks the on operating curious size be given a on talked thought call. We long-term like. what expenses capital

Ryan Gwillim

facility. Yes, Mercury, pretty a We you're pre-COVID lot and of through Whaler Jaime. even projects where opened we Yes. was second after did right. a a at capacity COVID, CapEx elevated. period We went

our we of in and to would for were people, years, certainly number invest now facilities X% say, And and so capital that in invest intensive. phase was lot programs. probably I a through running but We our still in keep a X% harvest our We're products, can X% number, X%. that between pretty those where our capital of in

But forward, as some at are yes, where got we we I or think the X spending at And think a flip the next through moving We've of point least capacity. we're of we at be did. plenty harvesting X lower move now I will a we years. bit that

Jaime Katz

helpful. That's Okay.

other coming what to talked wondering about we guess, be if during volume to other of opportunities. sort And would of I potential maybe you have been helpful haven't Lastly, companies it I'm much describe themselves. that this integration but strategic cadence opportunity has looking for the is for not up specifics, interesting vertical period of just distress alternatives picked so of maybe companies that

David Foulkes

Jaime. Yes,

incoming. We to quite continue feel lot of a

share comfortable see deploy judicious but us we we repurchases our portfolio with look we as share for We've handle But continue continued strong moment. to the very of been continued think pretty a our would about cash. have how we We'll we're as generation at pretty say, And expand we're I price priority to see Freedom to broadly, Boat at Ryan notably. got terms in where earlier, be we've $XX, think I really that. I Club purposeful. mentioned cash flow and

to products our organically, us. priority continue is we invest to certainly essentially fresh, not much continue to we've need which nearly but a we which need to in as And for always capacity, done, keep

Operator

the remarks. question-and-answer our back of over I the for to conference would reached end turn to have session. We Dave like closing

David Foulkes

all thank for your Well, you questions. great

cash we our conditions, potential levels, levers and efficiencies and of XXXX. of effort, close us but flowed position products QX. in to we've business really It of of lineup well flow continue benefits and operating think our market into free solid flow engine really a come Strong was XXXX lot inventory boat QX the new the the in and in used go to really terms we controllable to maximizing given think I in real highlight. took a as fresh

buyers hosting its boat Mercury I up of sort time season forward share a which And few of and shows event. a the premium share shows investor in been early weeks' mean, to from on being also really core points you significantly major XXXX Miami spectrum is the top discussed, much looking across exciting for and value XXXX course, of X gains new analyst products gains, As just to up spectacular share performance. Anyway, at in the showing our have increase. in for early we've encouraging, of to exciting season and Show are see with was sales segments, upcoming exhibits very the pretty many we of our our Boat and and

And so have a great day.

Operator

today's This Thank you. will conclude program.

You may your your and disconnect for lines you participation. this at time, thank

Brunswick (BC) 30 Jan 252024 Q4 Earnings call transcript