Boat registrations dipped slightly in September, despite a favorable comparison to September 2017, when sales were off 5 percent due to two hurricanes, Harvey and Irma. Preliminary data from Statistical Surveys surprised some marine industry analysts, who had expected growth for the month.
“While we were anticipating that stronger September data could provide a positive backdrop ahead of quarterly earnings reports, we cannot rule out the combination of a small state sample size — 51 percent matches the low of the year — weather impacts on deliveries and registrations, and the normal lag between warranty and state registrations as creating a headwind on the month’s results,” writes B. Riley FBR analyst Eric Wold in a report.
California, usually an early-reporting state that often ranks among the top five, wasn’t included in the September numbers because the state was behind in collecting data, SSI sales director Ryan Kloppe says. “That means we’re probably missing about 1,500 boats across all the categories,” he says.
Year-over-year sales declined 0.4 percent in the main powerboat segments but were up 3.5 percent year-to-date. The industry grew a total of 3.5 percent in September versus September 2017, though that number was slightly skewed by 100 percent growth in houseboats — with two sold last year versus four this year.
PWC registrations, which saw a 30.7 percent increase for the month over 2017, also drove growth, with nearly 2,000 units sold versus just under 1,500 last year. PWC has seen a 7.1 percent increase year-to-date. “PWC had a huge month, and it’s over 60,000 units for the year at this point,” Kloppe says.
Pontoon registrations rose above 50,000 after a 9.7 percent increase in September versus the same month last year; year-over-year growth was 4.5 percent. Aluminum fishing boat sales dipped 7.3 percent from last year, but the segment’s year-to-date growth is among the strongest, at 5.5 percent.
Ski and wake boat sales have seen the strongest year-to-date growth, at 8.8 percent, even though the segment declined nearly a percentage point in September over the prior year.
The drop in overall registrations prompted Wells Fargo analyst Timothy Conder to lower growth expectations for 2018 from 4.5 to 4 percent, but he still expects dollar growth to be at 10 percent. September usually accounts for 6 percent of annual sales, and the third quarter accounts for about 28 percent. “September and October will likely reflect a modest retail impact from hurricanes Florence and Michael,” Conder says in his report, which followed SSI’s data release.
A Wells Fargo dealer survey showed that 78 percent expected to end the year up 5 percent compared to 2017. Coastal dealers were the most upbeat, with 93 percent believing they’d exceed 5 percent growth. “In our view, the increased enthusiasm from coastal dealers was particularly striking given recent storms that have upended retail across several key coastal regions,” Conder says.
With the majority of sales for the year recorded, there shouldn’t be much change in year-to-date growth, which is at 3.1 percent overall, Kloppe says. “We’re right on that target that analysts predicted, between 3 to 6 percent growth,” he says.
This article originally appeared in the December 2018 issue.