Weakness seen in other in leisure vehicle industries has not affected the marine industry, according to Brunswick CEO Mark Schwabero.
“We’re at a different point in our recovery than some of the other industries have been in,” Schwabero told analysts and investors during a conference call Thursday to discuss second quarter results. “We’ve had a strong U.S. market as part of that recovery and it’s balanced across all geographic regions. We’re also a little less tied into some of the energy fields, agricultural softness with marine versus some other comparable industries.”
Even states tied to energy such as Texas have continued to grow nicely for Brunswick and for the overall industry, Schwabero said, particularly in areas that relate directly to energy. “I think some more recent numbers for the state of Texas show 15 percent growth,” Schwabero said. “Other factors related to droughts in prior years have maybe impacted us more, even when energy was strong. Fundamentally we’re not seeing that relationship in the U.S. market.”
Brunswick reported a second-quarter net sales increase of 9 percent, reflecting growth in fitness and fiberglass outboard and aluminum boats, as well as solid performance in outboard engines and marine parts and accessories.
“We are seeing a nice growth across our portfolio,” Schwabero said. “We see people migrating into boats with bigger engines, more content, at the low end of our product offerings all the way to the high end. It’s been part of the evolution of market over past 15 years. There is more elasticity on the high end versus the value end.”
“If you end up in stable recovery mode where we’ve got a pretty nice balance between recovery at the high and low end, and you end up seeing a reemergence of value on value side, it might have more of an up side on units, which could put pressure on [average selling price]. But we will still get to same the dollar amount,” Schwabero said.
The company continues to introduce new product at a faster rate than the rest of the industry, Schwabero said, and continues to operate on a pull model rather than push, making inventory more on demand.
“We had pretty good share performance in the marketplace, and we’re going to create an environment where we may trail retail a little bit with wholesale shipments in the first part of the year, and catch up in the back half,” CFO Bill Metzger said.