Brunswick CEO: Timing of Harvey and Irma will affect their impact on boat sales

Publish date:
Brunswick CEO Mark Schwabero told analysts at B. Riley & Co. that sales of boats such as this Sea Ray Fly 520 are not a leading indicator of the overall market.

Brunswick CEO Mark Schwabero told analysts at B. Riley & Co. that sales of boats such as this Sea Ray Fly 520 are not a leading indicator of the overall market.

Hurricanes Harvey and Irma will impact new-boat sales, but the effects will be somewhat offset by the timing of the storms.

“The first thing I want to remind people is, if you look at the seasonality of the marine business, September through December [account for] about 15 percent of retail sales,” Brunswick Corp. CEO Mark Schwabero told analysts at B. Riley & Co. on Thursday. “This isn’t a heavy selling season. You’ve got to remember those are relatively small numbers from a retail perspective.”

The photos emerging from Texas, where Harvey struck as a Category 4 storm on Aug. 25, and southern Florida, where Irma made landfall near Cudjoe Key on Sept. 10, showed a sad situation, Schwabero said. Images of boats jumbled together and sunk dominated news cycles.

New-boat sales will be postponed 12 to 18 months after most storms, which “just makes sense,” Schwabero said.

"People have to get roofs on their houses and their lives back together before they buy a new boat,” Schwabero said. “Even if they bought a new boat [sooner], there may not even be a dock to tie it to because a lot of those things get wiped out, too.”

Some people will also replace their vessels with used boats, he pointed out, after they are issued an insurance check for their former boat — assuming the boat was insured.

“More likely in the short term what you’re going to see is an uptick in parts and accessories because people are going to say, ‘Gee, the windshield is cracked,’ or ‘The seats are moldy or cut,’ or ‘I need a new prop,’ ” Schwabero said. “We’re likely to see some of the things in the short term on the P&A side coming through.”

Brunswick has been investing heavily in parts and accessories manufacturers and distributors in the past few years, most recently with the purchase of Lankhorst Taselaar, a parts and accessories distributor based in the Netherlands and Germany.

Analysts also asked about a dip in large-boat sales.

“I’m glad this question is one you’ve got on your list,” Schwabero said. “A lot of people think a lot about big boats. But big boats make up 15 percent of our boat business, which makes them less than 4 percent of Brunswick, and they’re even less of our earnings.”

“The number of dealers who sell those [boats from 41 to 65 feet] are a fairly small number,” Schwabero said. “They’re just not leading indicators of what’s going on.”

“There’s 2,000 big boats sold annually in the world, so I would hardly say that 2,000 consumers are indicative of what really goes on,” he said.


Registration Open for IWMC

ICOMIA’s World Marinas Conference is scheduled for Oct. 12-14 in Dubai.

YellowV Appoints Product Sales Manager

The Vetus company aims to target growth in the watersports sector by appointing Nick Tuinenburg as product sales manager.

Lowrance, White River Marine Strengthen Collaboration

Electronics packages from the Navico subsidiary, including Ghost trolling motors, are set to be standard equipment on select White River boat brands.

Dealers: Will You Attend Boat Shows?

Will the shortage of boat inventory and other supply-chain challenges influence dealer decisions to attend fall and winter boat shows?

Change is Coming, Ready or Not

Every marine business must prepare for all kinds of technology that will upend the industry, fast.

A Record Q2 for Brunswick

With strong global demand in all its business segments, Brunswick Corp. reported another stellar quarter, posting a 57 percent jump in net sales.