Brunswick Corporation, owner of the Boston Whaler, Lund, Sea Ray, Bayliner, Harris Pontoons, Princecraft, and Quicksilver boat brands, and the Mercury Marine, Mercury Racing, MerCruiser, and Flite marine propulsion brands, reported sales grew 7.6 percent in the third quarter to $1.36 billion. The sales increase reflects strong orders from OEMs and dealers, steady boating participation driving P&A (parts & accessories) and aftermarket business strength, and pricing actions taken in recent periods.
David Foulkes, chairman and CEO, Brunswick Corporation, said the company delivered strong third quarter results with each reporting segment generating revenue growth over the third quarter of 2024 and overall financial performance exceeding expectations and guidance for the quarter.
Segment Performance (GAAP Basis)
“The sales growth reflected strength across all our businesses despite a challenging, albeit improving, macro-environment and industry backdrop,” offered Foulkes. Our market-leading Propulsion and Boat portfolios outperformed their respective markets, and our recurring-revenue, parts and accessories, and other aftermarket-focused businesses, along with Freedom Boat Club, continued to benefit from healthy boating activity. Brunswick’s third quarter boat retail sales were flat year-over-year – a notable relative improvement from the first half of the year – driven by resilience in our premium and core categories. We continue to drive forward with financial and operational efficiencies through the announced, margin-accretive footprint actions in our boating business, continued enterprise-wide tariff mitigation initiatives, prudent pipeline management, and excellent capital strategy execution.”
Propulsion segment reported a 10 percent increase in sales resulting primarily from strong OEM orders in a low field inventory environment, together with continued robust market share, while operating earnings were below the prior year primarily due to common enterprise factors, partially offset by improved absorption driven by higher production in the third quarter as compared to the prior year.
“The propulsion business delivered significant sales growth, with revenues in each of its three business lines: outboards; sterndrive; and controls, rigging, and propellers up over prior year as OEM order strength continued later into the boating season,” explained Foulkes. “Mercury continues to be the clear U.S. outboard market share leader, with 49.4 percent share of outboard engines retail sold in the third quarter. Given the volume of Mercury competitor engines shipped into the U.S. in advance of the tariffs on Japanese imports, we have not yet seen the full potential impact of those tariffs on competitor product pricing, but we continue to believe that we are well positioned.
Engine Parts and Accessories segment reported an 8 percent increase in sales due to healthy boater participation driving a 4 percent increase in the products business and a 12 percent increase in the distribution business. Segment operating earnings were down, due solely to the enterprise factors.
“Strong boater participation in our core markets continues to benefit our high-margin, annuity engine parts and accessories business which posted strong sales growth over prior year, with sales in both the products and distribution businesses up solidly, and segment operating margin also up sequentially from the second quarter, reflecting the strong operating leverage in the business,” the CEO said.
“In the U.S., our market-leading distribution business has gained 140 basis points of market share year-to-date over the same period last year,” he added.
Navico Group segment reported a 2 percent increase in sales led by strong growth in the marine electronics portfolio as we start to see the benefits of our investments in new products and technology. Segment GAAP operating earnings were impacted by non-cash, intangible asset impairment charges while adjusted operating earnings were down slightly due to the enterprise factors, mostly offset by the growth in sales and improved gross margins.
“Navico Group reported modest sales growth and steady adjusted operating margin over prior year,” Foulkes continued. “Growth was led by strong performance in its marine electronics product lines that continue to benefit from investments in technology and new product introductions, while strong boating participation drove steady aftermarket sales that represent sixty percent of Navico Group revenue. Continued restructuring actions, a leaner, more focused organization, and new product investments are bearing fruit and Navico Group’s strategic importance to the Brunswick portfolio was recently reinforced by the introduction of the Simrad AutoCaptain autonomous boating system, developed by Navico Group in collaboration with Mercury Marine and Brunswick Boat Group.”
Boat segment reported a 4 percent increase in sales resulting from improved retail sales in the quarter pulling through steady wholesale orders as dealer inventories remain lean. Freedom Boat Club continued its growth journey, contributing approximately 13 percent of segment sales. Segment adjusted operating earnings increased driven by the benefits from the increased sales and improved gross margins, which were helped by lower discounting, partially offset by the aforementioned enterprise factors.
The CEO concluded the segment review, saying the Boat business grew both revenue and adjusted operating margin over prior year as the company’s premium brands continued to perform well, and the aluminum boat businesses delivered a very strong quarter. He added that dealer inventory remains historically low and, coupled with flat global retail, allowed for steady wholesale shipments.
“In September, we announced a strategic rationalization of our fiberglass boat manufacturing footprint, exiting our facilities in Reynosa, Mexico and Flagler Beach, Florida by the middle of 2026 and consolidating production from those facilities into existing U.S. facilities that will reduce fixed costs and unlock greater productivity and efficiency while maintaining the necessary capacity and flexibility for future growth,” Foulkes concluded.
Profitability & Expenses Summary
Operating earnings in the period showed a loss of $242.2 million after impairment charges. On an adjusted basis, operating income was $106.4 million, down 15.5 percent year over year. The decline on an adjusted basis was due to the enterprise impacts of tariffs and the reinstatement of variable compensation, partially offset by the impacts of the sales increases.
The net loss in the quarter after charges totaled $235.5 million, or a loss of $3.59 a share, against income of $44.6 million, or EPS of 67 cents per share. On an Adjusted basis, earnings per share would have been 97 cents per share, a decline of 17.1 percent year-over-year.
“Our third quarter results demonstrated both across-the-board growth for our segments and the continued resilience of our balanced portfolio that delivers earnings through market cycles. Our recurring revenue businesses again contributed more than sixty percent of our third quarter adjusted operating earnings, and we continue to grow this contribution, for example, by expanding Freedom Boat Club to approximately 440 global locations in the quarter. Strong free cash flow enabled us to complete $70 million of share repurchases year-to-date and increase our debt reduction target to $200 million for the year.”
Cash Flow and Balance Sheet Summary
Cash and marketable securities totaled $316.4 million at the end of the third quarter, up $29.7 million from 2024 year-end levels.
Net cash provided by operating activities of continuing operations during the first nine months of the year was $451.1 million including net earnings net of non-cash items and the impact of working capital.
Investing and financing activities resulted in net cash used of $410.7 million during the first nine months of 2025 including $318.7 million of repayments of short-term debt, $128.4 million of repayments of long-term debt, $116.5 million of capital expenditures, $84.6 million of dividend payments, and $65.0 million of share repurchases, net of $292.6 million of proceeds from the issuance of short-term debt.
“Our relentless focus on financial performance drove another quarter of outstanding free cash flow generation, providing us with the flexibility to simultaneously invest in our business, return capital to investors, and strengthen our balance sheet,” Foulkes added. “With $111 million of free cash flow in the third quarter, we have now generated $355 million of free cash flow year-to-date, a significant improvement over the first three quarters of last year.”
2025 Outlook
Foulkes said that with the large majority of the retail selling season now complete, the 2025 U.S. marine retail market is trending down by approximately 8 percent, with year-over-year comparisons improving significantly in the back-half of the season following U.S. trade-policy and capital market shocks in the second quarter.
“Our businesses continue to drive year-on-year revenue growth, benefiting from improved OEM ordering, low and healthy dealer inventories, improved retail for Brunswick boat brands versus the industry, continued propulsion market share gains, and resilient boating participation driving our recurring revenue businesses,” he continued. “In this challenging environment, Brunswick continues to drive earnings and exceptional free cash flow, proving our ability to generate returns through the cycle from our differentiated and balanced business model. We remain committed to investing in technology and new products, and our ability to generate cash flow enables industryleading levels of investment while simultaneously returning capital to shareholders and improving our balance sheet. We also remain focused on driving financial performance and improved margins, as evidenced by our recent footprint actions to optimize manufacturing capacity and efficiencies, especially for our entry-level fiberglass boats. We expect that these actions will drive significant improvements in medium-term profitability while retaining the flexibility and capacity for multi-year growth in an industry rebound.
“As we close out 2025 and look towards 2026, while the trade and economic environment remains extremely dynamic, we believe that we are well positioned to benefit from an industry recovery due to the operating leverage inherent in our businesses. Our tariff mitigation strategies are working, significantly reducing our net exposure, and we believe that our substantial, vertically-integrated U.S. manufacturing base positions us relatively well in an environment of persistent tariffs. Interest rates are coming down, with further cuts expected, reducing the cost of financing for both end consumers and dealers as we approach the fall boat show season and the restocking cycle for what we anticipate to be a modestly stronger 2026. The result is the confirmation of our fullyear guidance, specifically:
- Net sales of approximately $5.2 billion;
- Adjusted diluted EPS of approximately $3.25;
- Increased free cash flow, now in excess of $425 million; and
- Annual share repurchases of at least $80 million.”
Image courtesy Boston Whaler / Brunswick Corporation
