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    BC
    Earnings call· Mar 2026(Q1 FY26)

    BRUNSWICK Q1 FY26 earnings call BC

    Apr 30, 2026 Source

    Executive summary

    Brunswick Corporation Q1 FY26 — Strong Start to Year with Market Outperformance

    Brunswick delivered a strong Q1 FY26, exceeding expectations with significant sales and EPS growth, driven by market share gains and operational execution. The company outperformed a flat boat retail market, benefiting from lean inventories and strong OEM demand, while navigating dynamic geopolitical and tariff environments. Management remains confident in its full-year outlook, balancing strong performance with cautious macroeconomic considerations.

    Highlights

    5

    • Net sales increased 13% year-over-year to $1.4 billion, with growth across all segments.

    • Adjusted EPS increased 25% year-over-year to $0.70, driven by strong operating leverage.

    • Global and U.S. boat retail was approximately flat on a unit basis, outperforming the industry (SSI data showed U.S. main Powerboat retail down ~5% YTD).

    • Navico Group adjusted operating earnings increased 64% with adjusted operating margin expanding 280 basis points.

    • Boat Group adjusted operating earnings increased 63% with adjusted operating margin expanded 130 basis points.

    Concerns

    4

    • Propulsion adjusted operating earnings declined year-over-year due to planned accelerated investments in product development and incremental tariff impact.

    • Free cash flow was negative in Q1, consistent with seasonal patterns, and down year-over-year due to reinstated variable compensation.

    • Geopolitical volatility introduces new uncertainties, especially regarding consumer health outside the U.S. from a prolonged conflict in the Middle East.

    • Fuel prices have risen recently, with diesel prices impacting transportation costs, though generally remaining within historical bounds.

    Guidance & targets

    7
    CategoryTargetConfidence
    Adjusted EPS
    $4.00-$4.50
    high materiality
    Medium
    Full-year incremental net tariff impact
    near the lower end of our original $35 million to $45 million estimate
    medium materiality
    High
    Retail market environment
    flat to slightly up
    high materiality
    Medium
    Wholesale unit shipments (boat)
    up mid-single digits
    medium materiality
    Medium
    Wholesale unit shipments (engine)
    up mid- to high single digits
    medium materiality
    Medium
    Promotional spending improvement
    about 40 basis points
    low materiality
    Medium
    IEEPA tariff refunds
    $50 million
    medium materiality
    Medium

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Propulsion
    Sales increased significantly. Adjusted operating earnings declined due to planned accelerated investments in product development and incremental tariff impact. Pro forma adjusted operating leverage was north of 20% absent incremental tariffs, even with high single-digit million additional product development spend.
    Mercury's global and U.S. outboard unit orders: increasing more than 15% over the prior year periodMercury outboard share at recent boat shows: 60% overall and 80% on the water share at Miami, 70% share at Palm BeachOverall R12 share: 47% (steady)Year-to-date retail share: up 200 basis pointsWholesale share: strong gains
    		—17%—Adjusted operating earnings declined year-over-year
    Engine P&A
    Delivered growth from its aftermarket high-margin recurring revenue portfolio. Driven by healthy early season boating participation and continued market share gains. Robust adjusted operating leverage at 27%.
    U.S. distribution share (Land and See): increasing by 150 basis points
    		—14%—Adjusted operating earnings up 24%, adjusted operating margin expanded 140 bps
    Navico Group
    Transitioning from stability to growth, with sales up across all business lines. Supported by improving OEM demand, steady aftermarket performance, and operational efficiency. Benefits from product portfolio optimization, operational improvements, and disciplined cost control actions.
    Adjusted operating leverage: 47%
    		—7%—Adjusted operating earnings increased 64%, adjusted operating margin expanded 280 bps
    Boat Group
    Sales driven by higher wholesale shipments matching stabilized retail conditions, favorable mix, and momentum in the business acceleration portfolio. Growth led by aluminum fish and pontoon brands. Healthy adjusted operating leverage of 25%.
    Freedom Boat Club new locations: 4Freedom Boat Club member trips: increased by 20%Freedom Boat Club same-store sales: improved by 10%Boston Whaler and Sea Ray revenue increase at Palm Beach show: 40%
    		—6%—Adjusted operating earnings increased 63%, adjusted operating margin expanded 130 bps

    Operational metrics

    25
    Adjusted Operating Earnings (Consolidated)
    up 15%YoY
    Q1 FY26

    Supported by increased sales, favorable mix, improved absorption, and disciplined cost management, more than offsetting incremental tariffs.

    Adjusted Operating Leverage (Consolidated, ex-tariffs)
    approaching 30%
    Q1 FY26

    Absent the year-over-year enterprise impact from incremental tariffs.

    Adjusted Operating Leverage (Propulsion, ex-tariffs)
    north of 20%
    Q1 FY26

    Even after accounting for high single-digit million dollars of additional product development spend in the quarter.

    Additional Product Development Spend
    high single-digit millionquarter-over-quarter versus Q1 FY25
    Q1 FY26

    Planned accelerated investments to supercharge engine programs.

    Adjusted Operating Leverage
    27%
    Q1 FY26

    Robust operating leverage.

    Adjusted Operating Leverage
    47%
    Q1 FY26

    Reflecting early benefits of product portfolio optimization, operational improvements, and disciplined cost control actions.

    Adjusted Operating Leverage
    25%
    Q1 FY26

    Primarily driven by higher sales and favorable mix.

    Global Boat Pipelines
    down approximately 2,000 unitsversus last year
    Q1 FY26 end

    Reflecting deliberate actions to closely match wholesale with retail.

    Global Boat Order Backlog
    71%up 6 percentage points from last year
    Q1 FY26 end

    Providing improved near-term visibility.

    U.S. Outboard Engine Industry Growth
    6%
    Q1 FY26

    Industry growth in the first quarter.

    Mercury Retail Units Growth (U.S. Outboard)
    approximately 11%
    Q1 FY26

    Mercury's retail unit growth in the U.S. outboard market.

    U.S. Outboard Pipelines
    down approximately 10%versus last year
    Q1 FY26 end

    Reflecting wholesale to retail matching.

    Fuel Costs as % of Total Boat Ownership Expense
    20% to 30%of the fuel of a comparable passenger vehicle
    annual

    Fuel costs represent a relatively small portion of total boat ownership expense, contributing to low correlation between oil price spikes and boat sales.

    Oil-linked Materials as % of COGS
    2%
    Q1 FY26

    Combined exposure to oil-linked materials, reducing impact of oil price volatility.

    Interest Rates (Loan Rates)
    200 basis points downfrom that peak
    current

    Continuing tailwind for retail and floorplan financing.

    Promotional Spending Improvement (2025)
    approximately 100 basis points
    last year

    Incentives improved versus historical norms.

    Freedom Boat Club Locations
    446from 170 locations since acquisition
    current

    Significant expansion since the 2019 acquisition.

    Freedom Boat Club Member Trips
    640,000 trips
    last year

    High volume of member activity.

    Freedom Boat Club Enterprise Synergies
    $300 million
    since 2019 acquisition

    Synergy sales across the Brunswick portfolio.

    Awards Received
    nearly 50 awards
    through Q1 FY26

    Recognition across product innovation, workplace culture, leadership, and corporate reputation.

    Repower Market (Units Sold)
    15% to 20%
    current

    Percentage of units sold that are for repowering existing boats.

    Mercury Price Increase
    2%
    beginning of this year

    Price increase implemented by Mercury, similar to Japanese competitors.

    Boat Group Efficiencies
    more than 10 million
    next year

    Expected efficiencies from footprint rationalization, which is a cost headwind this year.

    IEEPA Tariff Refunds (Total Value)
    $50 million
    total

    Estimated total value of IEEPA tariff refunds, not yet factored into outlook.

    New Boat Sales vs. Replacement Value
    half or 60%
    current

    Current new boat sales relative to the replacement value of the existing fleet, indicating significant room for growth.

    Industry KPIs

    6
    MetricValueDetails
    EPS$0.70USD
    Revenue$1.4 billionUSD
    Inventorydown approximately 2,000 unitsunits
    Market share47%%
    Tariff impact mitigationnear the lower end of our original $35 million to $45 million estimateUSD
    Share buyback capital return$20 millionUSD

    Product announcements

    8
    ProductTypeDetails
    Simrad NSO 4 multifunction displaylaunch
    B&G Zeus SRX multi-function displaylaunch
    Lowrance Active Target 2XL fish finderlaunch
    Sea Ray SLX 360launch
    Boston Whaler Outrage 330 and 290 modelslaunch
    Mercury's advanced keyless engine start systemlaunch
    Mercury's innovative Boost over-the-air outboard performance upgradelaunch
    Fliteboard's RACE ultra-high-performance modellaunch

    Deals & partnerships

    1
    Freedom Boat Club franchise club (Boston and Cape Cod region)Acquisition of the largest remaining franchise club in the Freedom network.

    Adds 21 locations to the corporate-owned total and a strategic maintenance operations center to drive synergies with other nearby corporate locations.

    Risks & headwinds

    5
    Geopolitical Volatilitycurrent

    Heightened geopolitical volatility

    Mitigation: High exposure to insulated markets (U.S. and Canada, >70% of sales), balanced portfolio, lean channel inventories, and operational discipline.

    Consumer Health (Value Segment)current

    Potential impact on the health of our consumer, especially outside the U.S.

    Mitigation: Monitoring trends in Australia, New Zealand, and other exposed markets; premium sales outperforming value; offering alternatives like Freedom Boat Club for value boaters.

    Fuel Pricescurrent

    Fuel prices have risen recently, diesel prices have impacted boats and other transportation costs

    Mitigation: Implementing surcharges; historical data shows low correlation between oil price spikes and boat sales/participation; oil-linked materials are 2% of COGS under long-term supply agreements; hedging programs for other key commodities like aluminum.

    Tariff Environment Dynamicscurrent

    The tariff environment remains dynamic

    Mitigation: Net impact of recent changes (IEEPA repeal/replacement, Section 232 amendments) is positive; full-year incremental net tariff impact expected at lower end of original estimate.

    Boat Group Footprint Rationalization CostsFY26

    Headwind to us from a cost basis this year

    Mitigation: Process is on track; expected to flow through to more than $10 million of efficiencies next year.

    What to watch in Q2 FY26

    5

    Adjusted EPS

    Next quarter (Q2 FY26 results)
    Current$0.70 (Q1 FY26)
    TargetProgress towards $4.00-$4.50 FY26 guidance range, especially considering Q2 tariff impact.

    Why it matters

    To assess if the company can achieve its full-year EPS guidance despite Q2 tariff headwinds🌐 and macroeconomic caution.

    The result is materially unchanged guidance on the sales, margin and free cash flow lines, but an increase to adjusted EPS guidance to $4 to $4.50 reflecting the lower full year expected incremental net tariff impact🌐s I just discussed as well as the first quarter overdrive while also factoring in some cautiousness given the current dynamic macroeconomic environment.

    Q&A highlights

    7

    Can you provide an update on Mercury's capacity utilization and ability to handle additional volumes, and a framework for incremental margin in that business, given market share gains and product cycle tailwinds?

    Mercury is well-capacitized after prior investments and does not anticipate major additional investments in the next year. Operating leverage is typically >20%, approaching 30% in Q1 absent tariff impact, even with high single-digit million additional product development spend.

    “We do not anticipate any major additional investments to be able to support volume certainly in the next year or so. So yes, we're very excited about that. As you heard from Ryan and I'll maybe turn over to him. Mercury is leveraging up very nicely. And absent the tariffs, I think we're -- but, Ryan, maybe you want to take over the leverage numbers?”

    asked by Craig Kennison · answered by David Foulkes

    2 min read5 chapters

    Detailed Narrative

    01

    Market Outperformance and Inventory Management

    Brunswick's global and U.S. boat retail was flat year-over-year on a unit basis in Q1 FY26, outperforming the industry which saw U.S. main Powerboat retail down approximately 5% year-to-date. This marks the third consecutive quarter of improved relative retail performance. The company maintained lean and healthy engine and boat pipelines, with global boat pipelines down 2,000 units year-over-year but flat sequentially, reflecting deliberate alignment of wholesale with retail demand.

    02

    Strategic Investments and Product Innovation

    The company continues to invest in future high-horsepower outboard platforms and new mid-range models, reinforcing its long-term competitive advantage. Recent product launches include the Simrad NSO 4 and B&G Zeus SRX multi-function displays, the Lowrance Active Target 2XL fish finder (which received an innovation award), the all-new Sea Ray SLX 360 and Boston Whaler Outrage 330 and 290 models, Mercury's advanced keyless engine start system, and Fliteboard's RACE ultra-high-performance model. These innovations are driving market share gains and industry recognition.

    03

    Tariff Environment and Financial Impact

    The tariff environment remains dynamic, with IEEPA tariffs repealed and replaced by Section 122, and Section 232 tariffs on steel and aluminum amended. The net impact of these changes is positive, leading the company to believe its full-year incremental net tariff impact🌐 will land near the lower end of its original $35 million to $45 million estimate. Additionally, refunds for previously paid IEEPA tariffs, estimated at $50 million, are not yet factored into the outlook and will be recognized as cash is received, expected over the balance of this year and next.

    04

    Freedom Boat Club Expansion and Synergies

    Freedom Boat Club (FBC) continues its strong growth trajectory, adding 4 new locations in Q1 FY26, increasing member trips by 20%, and improving same-store sales by 10%. Earlier this month, FBC completed the acquisition of its largest remaining franchise club in the Boston and Cape Cod region, adding 21 corporate-owned locations and a strategic maintenance operations center. This acquisition is expected to be day-one accretive to earnings and contributes to the approximately $300 million in enterprise synergies generated since FBC's 2019 acquisition, growing its global footprint from 170 to 446 locations.

    05

    Consumer Trends and Geopolitical Volatility

    Product demand and boating participation in the core U.S. market remain relatively unaffected by geopolitical events, though the health of the value consumer remains a focus, with premium sales continuing to outperform value. While expectations for incremental interest rate relief have moderated, the company's forecast does not rely on additional cuts. Fuel prices have risen recently but are generally within historical bounds, with no clearly discernible direct impact on retail or OEM demand in Brunswick's largest markets.

    AI-generated summary of the company’s earnings call. Not investment advice.