Report eyes pent-up demand after cool spring

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Growth of new boat registrations is down in all categories for the three-month period from February to April, according to new Bellwether data from Florida-based Info-Link Technologies.

But Info-Link co-owner Jesse Wells says looking at three-month rolling averages can be tricky when considering months that traditionally see fewer sales, such as February, March and April, since the numbers are smaller to begin with and therefore more easily skewed.

“I don’t know how much I’d read into it. Looking at the three-month average, especially in the wintertime [and early spring] when numbers are so small, it can be up or down pretty easily,” Wells told Trade Only Today. “We’re hearing it’s weather-related. We don’t know, but it’s going to be interesting to see what this looks like in May and June, which are huge months, because if it is weather-related and there’s pent-up demand we’ll see that effect in the next few months if we’re ever going to see it.”

Wells said Info-Link puts more emphasis on 12-month rolling averages since there is less seasonality in those numbers. By that measure there is still growth across most segments, but it’s less occurring less rapidly than the previous year’s growth.

“We’re still on track,” Wells said. “I suppose if it were to continue heading down toward the zero [growth] mark we’d just be flat, relative to last year. So I think what we’re talking about is the growth rate is accelerating at a decreasing rate. Anything above that zero point means they’re selling more units this year than last.”

Info-Link numbers showed that boat sales grew at a 10 percent faster rate in 2012 than in 2011, Wells said. “We’re almost at half that now. How’s it going to end up? I wouldn’t be at all surprised if we see a little rally.”

It wasn’t just lousy weather that affected sales, although that weather played a large role, according to National Marine Manufacturers Association president Thom Dammrich.

“I think the springtime slowdown is attributable largely to a cold spring throughout much of the country,” Dammrich told Trade Only. “Consumer confidence was down a little during this period, too. But I think it is mostly weather-related. The next few months will tell the tale.”

Weather was the oft-cited culprit in quarterly earnings calls with investors and analysts in April.

MarineMax CEO Bill McGill told analysts that chilly weather “gave rise to truly bifurcated results in our sales and even more significantly to our earnings.”

“Like all of our teams around the country, our teams in the Northeast and Midwest work very hard to create excitement for boating during the quarter, but normal spring weather has not come on time, and as a result our normal spring launch is definitely behind previous years in those regions,” McGill said during the conference call.

The persistence of cold, blustery weather in the Midwest and northern regions of the country — on top of the lingering effects of Hurricane Sandy — depressed sales and margins during the March quarter, McGill said.

Brunswick Corp. CEO Dustan McCoy also said sales compared unfavorably between this year’s cooler-than-average late winter and early spring when stacked against last year’s warmer-than-usual late winter and early spring.

“Although we're always reluctant to cite weather as a factor, we believe warmer-than-normal temperatures that occurred in the first quarter of 2012, combined with colder-than-normal conditions in this year's first quarter for the eastern two-thirds of the United States, contributed to the declines experienced thus far,” McCoy told analysts. “In other words, we believe that retail sales occurred earlier last year, and this year they remain potentially deferred to later months.”

— Reagan Haynes

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