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Brunswick (BC) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Discretionary· Jul 30, 2026

Source: earnings call transcript

Executive summary

Brunswick Q2 FY26 — Strong Sales Growth Across All Segments and Increased EPS

Brunswick delivered a strong second quarter, exceeding financial expectations with sales growth across all segments and robust adjusted EPS, benefiting from pricing actions, new product traction, and strong operational execution. The company is navigating a turbulent external backdrop, including new tariffs and inflationary pressures, while strategically focusing on premium and core product lines and leveraging its recurring revenue businesses. Management remains confident in its full-year outlook, raising free cash flow guidance and maintaining a balanced view of risks and opportunities.

Highlights

5

  • Net sales increased 8% year-over-year to $1.6 billion, with growth across all segments for the fourth consecutive quarter.

  • Adjusted EPS rose 34% year-over-year to $1.56, significantly ahead of expectations even absent tariff benefits.

  • Free cash flow was robust at $278 million in the quarter.

  • Navico Group's adjusted operating margin expanded by 680 basis points, driven by higher revenue and tariff refunds.

  • Freedom Boat Club announced its 450th global network location, with member trips up a record 13% for the first half of the year.

Concerns

4

  • New Section 301 and Canadian tariffs are estimated to drive a net negative incremental $5 million impact in 2026.

  • Anticipated additional $0.15 of material inflation in H2 FY26, mostly impacting Mercury and Navico Group.

  • U.S. main powerboat segment retail sales were down approximately 4% year-to-date, impacted by sentiment, affordability, and weather.

  • Propulsion segment's adjusted operating margin was essentially flat year-over-year due to elevated material/labor inflation, product spend, and tariffs, despite increased sales.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Revenue
$5.7 billion to $5.8 billion
high materiality
High
Full-year 2026 Adjusted Operating Margins
approximately 8%
high materiality
High
Full-year 2026 Adjusted EPS
$4.35 to $4.75
high materiality
High
Full-year 2026 Free Cash Flow
more than $400 million
high materiality
High
Full-year 2026 Net IEFA Benefit
a little more than $0.30
medium materiality
High
Full-year 2026 Material Inflation Impact
additional $0.15
medium materiality
High
Full-year 2026 Tariff Changes Impact
approximately $0.05
medium materiality
High
Propulsion Segment Full-year Margin Growth
more than 100 basis points
medium materiality
High
Navico Group Full-year Adjusted Operating Margin Target
in excess of 100 basis points
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Propulsion
Driven by steady OEM demand, market share, and pricing actions. Elevated material/labor inflation, product spend, and tariffs offset margin gains. Expects >100 bps margin expansion for full year.
U.S. Outboard rolling 12 share: down slightly to 46%International share gains: double-digit unit order increases YTDBrazil share increase: 600 bps since 2019U.S. outboard pipelines: down 7% YoY
up 8%8%—Adjusted operating earnings up, margins essentially flat
Engine Parts and Accessories (P&A)
Supported by healthy boating participation, product demand, and past pricing actions. Improved profitability from product mix and leverage on higher sales.
Products business growth: 16%Land and Sea rolling 12 distribution share: increased by 130 bps
up 9%9%—Adjusted operating earnings up 19%, adjusted operating margin up 200 bps
Navico Group
Strong performance across business lines, new products, OEM wins, aftermarket demand, operational improvements. Solidly on track for full-year target of >100 bps adjusted operating margin increase (ex-tariff refunds).
Core operating margin expansion (ex-EPA): over 250 bps
up 7%7%—Adjusted operating earnings up 143%, adjusted operating margin expanded 680 bps
Boat
Benefited from premium models, improved pricing, lower discounts, and operational efficiencies. Expects continued strong margin expansion over the remainder of the year.
Freedom Boat Club global network locations: 450thFreedom Boat Club member trips: up 13% for H1
up 5%5%—Adjusted operating earnings up 45%, margins up 120 bps

BC operating KPIs by quarter

BC operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
Stores Freedom Boat Club
446 Since the acquisition, we've also grown the location count from 170 locations to 446 global, corporate-owned and franchise locations, adding 4 more locations in the quarter. Source: earnings call transcript
450 We recently announced our 450th global network location and member trips were up a record 13% for the first half of the year. Source: earnings call transcript
+0.9%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
5 new engine platformsroadmap

Deals & partnerships

Saks store OEM supply agreement for Simrad Auto captain

Navico Group finalized its first OEM supply agreement with Saks store for Simrad Auto captain.

Risks & headwinds

Consumer sentiment negatively impacted by Middle East conflict and inflation Ongoing

Negatively impacting consumer sentiment, particularly amongst buyers of our valued products.

Mitigation:Focus on premium and core brands; rationalization of value models.

New Section 301 and Canadian tariffs 2026, primarily H2

Net negative incremental $5 million 2026 impact.

Mitigation:Continue to adjust mitigation actions as the environment evolves.

Additional material inflation H2 FY26

Additional $0.15 EPS impact in H2 FY26.

Mitigation:Implied by pricing actions and operational efficiencies.

Softness in value product lines H1 FY26, ongoing

U.S. main powerboat segment retail down ~4% YTD, with pressure on value product lines.

Mitigation:Purposeful rationalization of value models and manufacturing footprint; focus on premium/core segments.

What to watch in Q3 FY26

Full-year Adjusted EPS

Next quarter (Q3 FY26 earnings call)
Current $4.35-$4.75 (midpoint $4.55)
Target Confirmation or revision of guidance

Why it matters

Key indicator of overall financial performance and management's ability to navigate macro challenges.

Adjusted EPS of $4.35 to $4.75, up almost 40% at the midpoint.

Find out whether BC delivers this. Inve re-checks your case every morning.

Q&A highlights

Clarification on the net impact of tariffs, refunds, and variable compensation on full-year EPS and operating margin guidance, specifically asking if the $0.30 EPS raise is offset by tariffs.

Ryan Gwillim explained that tariffs paid in 2026 and EPA refunds are distinct. New tariffs (Section 301, Canadian) are a $5M hit in H2. Gross EPA refunds are $60M-$70M, but the net benefit (after variable comp) is what matters. $30M of Phase II refunds were accepted in Q2 (net $0.20 EPS benefit), with another $10M expected in H2 (net $0.10 EPS benefit). Phase IV refunds are not in 2026 guidance. The Q2 EPS beat of $0.20 was unrelated to tariffs. The full-year EPS guidance raise from $4.25 to $4.55 midpoint reflects the Q2 beat and partial net EPA benefit, offset by H2 inflation and new tariffs.

“So that leaves the treatment of Phase II IPO and simply about $30 million of that, as you correctly mentioned, $30 million was accepted in Q2 and therefore, included the results and once netted for enterprise-wide variable comp impacts represented about a $0.20 benefit in the quarter.”

asked by James Hardiman · answered by Ryan Gwillim

2 min read 5 chapters

Detailed narrative

Market Dynamics and Portfolio Resilience

Brunswick's premium and core bias portfolio demonstrated resilience amidst a turbulent external backdrop, with first-half boat retail sales flat when adjusted for purposeful value model rationalization. The company continues to outperform the market, expanding its share of wallet and capturing new OEM wins with well-received new products. Dealer and OEM sentiment is stable but cautious, with wholesale order rates remaining fairly steady, and overall net sales increased 8% year-over-year.

Tariff Management and Financial Impact

The company is actively monitoring and mitigating tariff impacts, expecting total gross IPA refunds of $60 million to $70 million. Approximately $30 million of submitted and accepted refunds were recognized in Q2, with an additional $10 million from Phase II expected in H2. New Section 301 and Canadian tariffs are projected to add $5 million in net negative incremental impact for 2026, slightly elevating the total incremental tariff impact to approximately $40 million for the year.

Product Development and Innovation

Brunswick earned a record 15 boating industry top product awards in the quarter, with 86 awards year-to-date, reflecting strong product leadership across 13 different brands. Five new engine platforms are on track, with four launching in the next two years, supported by ongoing product development investments of approximately $20 million to $25 million spread over a couple of quarters. The company is also pursuing growth opportunities in repower, government, and commercial markets.

Boating Participation and Recurring Revenue

Boating participation remains very strong and continues to drive robust performance in parts and accessories aftermarket and subscription businesses. Freedom Boat Club, a key part of the business acceleration portfolio, recently announced its 450th global network location, with member trips increasing a record 13% for the first half of the year. Engine pipelines remain lean and fresh, positioning the company for wholesale growth with any future market improvement.

Segment-Specific Performance Drivers

All segments delivered year-over-year sales growth for the fourth consecutive quarter. Propulsion saw strong OEM demand and international momentum, with double-digit unit order increases year-to-date internationally. Engine P&A benefited from healthy boating participation and pricing actions, achieving 16% growth in its higher-margin products business. Navico Group's growth was fueled by new products and OEM wins, and the Boat segment improved margins through a focus on premium brands and operational efficiencies.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.