Brunswick’s second quarter results were met with a negative market reaction despite revenue and non-GAAP earnings per share exceeding Wall Street expectations. Management highlighted that operational execution, disciplined cost control, and resilience in aftermarket-focused businesses partially offset ongoing macroeconomic challenges, unseasonable weather, and direct tariff impacts. CEO David Foulkes described the environment as “challenging,” citing underperformance in value-category boat sales but steady trends in premium and core segments. He also acknowledged that reinstated variable compensation and tariffs weighed on earnings, noting, "Earnings were impacted by the reinstatement of variable compensation and the effects of tariffs, but were consistent year-over-year excluding those items."
Is now the time to buy BC? Find out in our full research report (it’s free).
Brunswick (BC) Q2 CY2025 Highlights:
- Revenue: $1.45 billion vs analyst estimates of $1.26 billion (flat year on year, 15.3% beat)
- Adjusted EPS: $1.16 vs analyst estimates of $0.95 (21.8% beat)
- Adjusted EBITDA: $199.1 million vs analyst estimates of $161.7 million (13.8% margin, 23.2% beat)
- The company reconfirmed its revenue guidance for the full year of $5.2 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $3.25 at the midpoint
- Operating Margin: 7.1%, down from 11% in the same quarter last year
- Market Capitalization: $3.89 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Brunswick’s Q2 Earnings Call
- James Hardiman (Citigroup) pressed CFO Ryan Gwillim and CEO David Foulkes on why full-year guidance was unchanged despite lower tariff impact; Gwillim explained that softness in some markets and cautious macro assumptions offset the tariff benefit.
- Craig Kennison (Baird) asked about the long-term margin and revenue potential for Navico; Foulkes stated that, with continued product refreshes and restructuring, Navico could achieve low-to-mid teens operating margins and mid-to-high single-digit revenue growth.
- Noah Zatzkin (KeyBanc Capital Markets) inquired about the rationale and margin implications of reducing the value fiberglass boat lineup; Foulkes explained the move was to reduce complexity and maintain profitability amid lower demand, emphasizing that value boats still contribute to overall company margins through bundled engine and technology sales.
- Xian Siew (BNP Paribas) questioned the divergence between propulsion sales growth and outboard retail trends; Gwillim attributed it to OEM customers increasing orders after prior inventory reductions and Brunswick’s ongoing retail market share gains.
- Jaime Katz (Morningstar) sought clarity on what would drive value segment recovery; Foulkes pointed to consumer sensitivity to interest rates and macroeconomic factors, expecting rate reductions to disproportionately benefit value buyers.
Catalysts in Upcoming Quarters
In the coming quarters, our team will closely monitor (1) Brunswick’s ability to further mitigate tariff impacts through supply chain adjustments and onshoring, (2) the execution and financial impact of ongoing manufacturing rationalization and product line simplification, and (3) indications of retail demand recovery—especially in value categories—should interest rates decline. Developments in Freedom Boat Club’s expansion and new product rollouts will also be key indicators.
Brunswick currently trades at $59.16, down from $64.67 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).
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