Key cold-weather boating states saw boat sales drop across the board as cold weather persisted into early spring, with Michigan, New York and Ohio all posting sharp declines in late winter.
The persistent chilly spring weather prompted Brunswick Corp. to pre-announce an anticipated 3 percent drop in first-quarter revenue, versus prior analyst expectations that sales would rise 3.3 percent for the quarter. The company kept annual expectations unchanged.
Michigan saw a 3.6 percent drop in sales in February, New York experienced a 9.9 percent drop and Ohio had a 26.2 decline in sales, according to a report released today by Wells Fargo.
“We expect similar regional trends in March … and also in early April,” analyst Tim Conder wrote in the report, adding that retail data are due in mid-April for March sales.
April retail sales, particularly of fishing boats, could be restrained in the northern United States and Canada as deep lake ice abates, Conder wrote, cautioning that second-quarter data should be analyzed collectively because of the slow melt of thick lake ice in the north.
The report emphasized that first-quarter volume is not sufficient to predict the entire year. “While the first quarter represents only about 17 percent of annual retail and Brunswick recognizes revenue on shipment to dealers, we believe the company curtailed shipments to dealers in regions most negatively impacted by harsh winter weather — to assist in lowering floorplan financing — and will ship early in Q2,” Conder wrote.
“We believe significant pent-up demand could then be released — similar to the third quarter of 2013 following second-quarter rain — which could negate historical seasonal stock-trading patterns,” Conder wrote.
Brunswick announced that earnings per share would be in the range of 59 to 60 cents, compared with the 66-cent analyst consensus. Annual EPS guidance was unchanged at $2.40 to $2.55.