Survey: Dealers disappointed with 2011 sales

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A wide-ranging survey of nearly 300 dealers confirms that "2011 is not the inflection year that many hoped for going into the selling season," according to a report from RBC Capital Markets.

“Dealers expressed disappointment with what appears to be a flat to slightly down year for new boat sales. However, Brunswick’s guidance and investor sentiment reflect a flattish year, so we view these results as roughly neutral, versus expectations,” analyst Edward Aaron wrote in his report. The survey was done in conjunction with Boating Industry magazine.

Bright spots in the survey include:

• Small-boat categories continue to show gradual recovery and dealers are reporting robust used boat sales and service business.

• There are pockets of geographic strength, including evidence of a recovery in Southern markets.

• Inventories remain healthy.

Still, Aaron wrote, “Dealers have grown more cautious in recent months, reflecting disappointing sales performance and negative macro headlines. The biggest fundamental problem, by far, is that ‘trade-up’ segments, cruisers in particular, are still very weak despite absorption of late model year used inventory.”

Aaron noted that the survey results are consistent with Brunswick’s expectations for a “flattish” year for the industry.

“Our best guess is that [second-quarter] retail sales were down slightly following the 1 percent decline reported in [the first quarter],” he added. “We expect data to show single-digit growth in aluminum … flat growth in outboard … and an approximately 20 percent decline in sterndrive/inboard.

“While dealers are broadly disappointed with [second-quarter] business performance, investor expectations have come down since last quarter and no longer reflect expectations for positive industry growth in 2011,” Aaron wrote.

Brunswick is set to release its quarterly results on July 28.


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