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BRUNSWICK CORP (BC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 net sales were $1.36B, up 6.8% YoY, with adjusted diluted EPS of $0.97; GAAP EPS was $(3.57) due to $333.8M in non-cash impairment (Navico), while adjusted operating margin was 7.8% .
  • Results beat Street estimates: revenue $1.26B* vs actual $1.36B and EPS $0.87* vs actual $0.97; Q2 and Q1 were also beats on both revenue and EPS* .
  • FY 2025 guidance maintained: revenue ≈$5.2B, adjusted EPS ≈$3.25, adjusted operating margin ≈7%; free cash flow raised to >$425M and debt reduction target raised to $200M .
  • Strong cash generation: $111M FCF in Q3; $355M YTD FCF; share repurchases ≥$80M; dividend declared $0.43 payable Dec 15, 2025 .
  • Management emphasized tariff mitigation (net impact ~$75M for 2025), lean pipelines, premium/core brand resilience, and strategic footprint actions; initial 2026 outlook suggests mid-high single-digit revenue growth and >25% adjusted EPS growth potential, subject to macro/tariffs .

S&P Global estimates noted with an asterisk; Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • “Each reporting segment generated revenue growth over the third quarter of 2024 and overall financial performance exceeding expectations and guidance for the quarter” .
  • Propulsion revenue +10% YoY, market share leadership (Mercury 49.4% U.S. outboard retail share); new high-horsepower launches (350/425hp) and OEM strength .
  • Exceptional cash generation: $111M FCF in Q3; $355M YTD; debt reduction target increased to $200M and liquidity of $1.3B with no maturities until 2029 .

What Went Wrong

  • Adjusted operating earnings down 15.5% YoY; adjusted margin -210 bps YoY to 7.8% due to tariffs and reinstatement of variable compensation .
  • GAAP loss driven by $333.8M impairment (non-cash) at Navico Group; GAAP operating margin -17.8% .
  • Engine P&A and Propulsion operating earnings down YoY despite sales growth, reflecting enterprise-wide tariff and variable comp headwinds; Navico adjusted OE slightly down .

Financial Results

Headline Results vs Prior Periods and Estimates

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$1,221.8 $1,447.0 $1,360.2
Revenue Consensus Mean ($USD Millions)*$1,135.6$1,257.1$1,261.6
GAAP Diluted EPS ($)$0.30 $0.90 $(3.57)
Adjusted Diluted EPS ($)$0.56 $1.16 $0.97
GAAP Operating Margin (%)4.6% 7.1% (17.8)%
Adjusted Operating Margin (%)5.9% 8.7% 7.8%
Primary EPS Consensus Mean ($)*$0.22$0.95$0.87
EPS - # of Estimates*171617
Revenue - # of Estimates*161516

S&P Global estimates noted with an asterisk; Values retrieved from S&P Global.

Segment Breakdown (As Adjusted)

Segment (Non-GAAP)Q3 2024 Net Sales ($MM)Q3 2025 Net Sales ($MM)Q3 2024 Adj Op Earn ($MM)Q3 2025 Adj Op Earn ($MM)Q3 2024 Adj Op Margin (%)Q3 2025 Adj Op Margin (%)
Propulsion$485.9 $535.4 $53.6 $45.4 11.0% 8.5%
Engine Parts & Accessories$336.1 $363.7 $87.1 $82.4 25.9% 22.7%
Navico Group$184.1 $186.9 $9.1 $8.8 4.9% 4.7%
Boat$345.3 $360.2 $4.3 $7.1 1.2% 2.0%
Total$1,273.3 $1,360.2 $125.9 $106.4 9.9% 7.8%

KPIs

KPIQ1 2025Q2 2025Q3 2025
Free Cash Flow ($USD Millions, quarter)$(44.4) $243.5 $111.0
Free Cash Flow YTD ($USD Millions)$(44.4) $243.5 $354.6
Cash & Equivalents ($USD Millions, end of period)$286.7 $315.7 $297.7
Mercury U.S. Outboard Retail Share (%)40 bps gain (R12M) +30 bps overall (R12M) 49.4% (Q3)
Freedom Boat Club locations (#)n/a433 ~440
Dealer Pipeline TrendU.S. pipeline down ~1,500 units QoQ Inventory planned reductions continuing Global pipeline down >2,200 YoY; U.S. down >1,200 YoY

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025~$5.2B (Q2) ~$5.2B (Q3) Maintained
Adjusted Diluted EPSFY 2025~$3.25 (Q2) ~$3.25 (Q3) Maintained
Adjusted Operating MarginFY 2025~7% (Q3 call) ~7% (Q3 call) Maintained
Free Cash FlowFY 2025>$400M (Q2) >$425M (Q3) Raised
Debt Reduction TargetFY 2025$175M (Q2) $200M (Q3) Raised
Share RepurchasesFY 2025≥$80M (Q2) ≥$80M (Q3) Maintained
Q3 RevenueQ3 2025$1.1–$1.3B (Q2) Actual $1.36B Beat guidance
Q3 Adjusted EPSQ3 2025$0.75–$0.90 (Q2) Actual $0.97 Beat guidance
DividendQuarterly—$0.43 payable Dec 15, 2025 Announced

Earnings Call Themes & Trends

TopicQ1 2025 (Apr 24)Q2 2025 (Jul 24)Q3 2025 (Oct 23)Trend
Tariffs/MacroUpdated EPS range $2.50–$4.00; modeling $1 EPS drag at tariff midpoint; mitigation underway Tariff impact analysis; EPS bridge still assumes ~$1; softer macro; Section 232/301 dynamics; monitoring 15% tariffs on Japanese engines Net tariff impact estimate raised to ~$75M; mitigation outpacing expectations; exposure reducing via onshoring Improving mitigation; estimate clarity
Supply Chain/InventoryProactive pipeline reductions; U.S. wholesale shipments down 16%; U.S. pipeline down ~11% Engine pipeline down ~25% since Jan 2024; >175hp down ~33%; set to add engines as wholesale exceeds retail Dealer pipelines lean; global -2,200 YoY; focus on working capital and efficiency Lean pipelines sustained
Product PerformancePremium/core stable; value weakness; new launches across brands New Mercury 425/350hp engines; Navico product momentum; premium brands strong All segments revenue growth; aluminum brands strong; premium/core resilient Broad-based improvement
Technology/Autonomy/AIInvesting; AI-assisted coding; planned autonomous docking in 2025 Continued AI deployment; product launches across Navico Simrad AutoCaptain commercial launch; OEM demos; ACES autonomy pillar milestone Execution milestone
Footprint/Cost ActionsConsidering entry-level lineup rationalization; targeted onshoring Structural actions to re-expand margins; value fiberglass lineup streamlined 25% Consolidate Reynosa/Flagler Beach; ~$10M run-rate savings at current volumes (mid-2026) Structural margin actions intensify
Regional TrendsPremium strength; U.S. retail modestly down; pipelines reduced OEM orders strong; U.S. share gains; Europe/Asia momentum U.S. retail flattish in Q3; international share gains; interest rate cuts tailwind Stabilizing to improving

Management Commentary

  • “Brunswick delivered strong third quarter results…overall financial performance exceeding expectations and guidance for the quarter.” — David Foulkes, CEO .
  • “With $111 million of free cash flow in the third quarter, we have now generated $355 million year-to-date…we increased our debt reduction target to $200 million for the year.” — David 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.” — David Foulkes .
  • “We are well positioned to benefit from an industry recovery…we believe we can grow revenue by mid to high single-digit %, resulting in more than 25% growth of adjusted EPS.” — David Foulkes (early 2026 view) .

Q&A Highlights

  • Tariffs and mitigation: CFO detailed Section 232 impacts and retroactive applications; efforts “continue to outpace expectations,” net 2025 impact ~$75M; smaller incremental impact in 2026 anticipated .
  • Inventory and wholesale/retail balance: Dealer inventory “as low as…any non-COVID year since the GFC”; U.S. end-year global units ~18k; U.S. <12k; >80% inventory <1 year old .
  • Footprint consolidation: Boat facility exits to yield ~$10M run-rate savings at current volumes by mid-2026; net positive in 2026 despite transition inefficiencies .
  • Mercury share/tariff tailwinds: Monitoring competitor price increases due to 15% tariffs on Japanese engines; momentum in converting OEMs; strong global share gains .
  • Navico margins: Absent tariffs/variable comp reset, margins would have been up; multi-year operational consolidation and product innovation roadmap ongoing .

Estimates Context

  • Q3 beat: Revenue $1,361M vs $1,262M*; EPS $0.97 vs $0.87*. Q2 beat: Revenue $1,447M vs $1,257M*; EPS $1.16 vs $0.95*. Q1 beat: Revenue $1,222M vs $1,136M*; EPS $0.56 vs $0.22* .
  • Coverage: Q3 EPS estimates (n=17), revenue (n=16); Q2 EPS (n=16), revenue (n=15); Q1 EPS (n=17), revenue (n=16)*.
  • Implications: Street likely to raise revenue and adjusted EPS trajectories given three straight quarterly beats and maintained FY EPS guidance despite higher tariff estimate; non-GAAP adjustments isolate non-cash impairment, supporting normalized EPS comparability .

S&P Global estimates noted with an asterisk; Values retrieved from S&P Global.

Key Takeaways for Investors

  • Strong execution and three consecutive quarterly beats amid macro/tariff headwinds underscore resilience and cash-generation capacity .
  • The GAAP loss is driven by non-cash impairments; adjusted EPS/margins better reflect core operations and forward comparability .
  • FY 2025 guide reaffirmed; FCF and deleveraging targets raised, signaling confidence in cash conversion and balance sheet trajectory .
  • Lean pipelines and premium/core strength set up for improved wholesale and operating leverage into 2026; footprint actions should be margin-accretive .
  • Tariff mitigation is progressing; vertical integration provides structural competitive advantage, particularly versus imported engines .
  • Product/technology catalysts (AutoCaptain autonomy, Mercury 350/425hp) reinforce share gains and pricing power in higher-margin categories .
  • Near-term trading: likely focus on normalized EPS/FCF, guidance consistency, and visible margin drivers (discounting normalization, footprint savings); watch tariff litigation/policy and competitor pricing dynamics .

S&P Global estimates noted with an asterisk; Values retrieved from S&P Global.

Appendix: Additional Press Releases (Q3 2025)

  • Dividend declared: $0.43 per share, payable Dec 15, 2025; record date Nov 26, 2025 .
  • Earnings release advisory and webcast details (Oct 2, 2025) .