Resilient U.S. consumers, favorable spring weather and strong March boat sales trends point to a very solid marine industry in its peak selling season and could indicate a supply shortage in California and northern U.S. states.
Barring “a major external shock,” U.S. consumers would remain much more resilient than expected, said an analysis of public marine companies that includes BRP Inc., Brunswick Corp., Malibu Boats and MCBC Holdings, the parent company of MasterCraft, by Wells Fargo.
Data released by Statistical Surveys indicated that March sales units were up 21 percent year over year in traditional composite and 22.2 percent year over year including ski and wake boats, the report by Wells Fargo senior analyst Tim Conder noted.
Strong growth in March, a month that traditionally accounts for about 9 percent of annual sales, starts the retail selling season against a difficult 9.8 percent growth comparison last year. Comps become easier through the important second quarter, which accounts for the bulk of new boat sales.
Each core segment of the companies saw solid growth in double digits, Conder wrote.
In addition, Texas saw a 14.2 percent increase in sales for the year to date and a 16.7 percent increase if ski and wake boats are included — traditionally a popular segment for that region — which Conder attributed to the drought relief offsetting any potential oil-related fallout.
El Niño benefits were starting to benefit the Pacific, a region that saw 23.2 percent growth in March, and 14.2 percent for the year to date. California alone saw a 5.9 percent increase in March boat sales, he wrote.
The National Marine Manufacturers Association said outboard engine retail sales were up 8.4 percent on a trailing 12-month basis, and SSI revised February sales data slightly up after receiving information from late-reporting states.
“Our industry lending sources estimate 2016 unit sales [are up] 5-6 percent with dollars [up] low double-digit percentages versus 2015,” Conder wrote, saying unit growth was about 6 percent and dollar increases were between 12 and 14 percent.
Combining all those factors with a warmer spring, Conder and his colleagues were positive about the overall health of the marine industry.
Wells Fargo has predicted that all four companies’ stocks will outperform expectations.