Sign in
BC

BRUNSWICK CORP (BC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 results were below prior year but slightly ahead of internal expectations, with net sales $1.1549B (-15.2% YoY) and adjusted EPS $0.24; GAAP EPS was -$1.07 driven by Navico impairment; record Q4 free cash flow of $278M supported strong year-end cash generation .
  • Management issued 2025 guidance: net sales $5.2–$5.6B, adjusted operating margin 7.5–9.0%, free cash flow >$350M, adjusted EPS $3.50–$5.00; Q1 2025 guide: revenue $1.0–$1.2B and adjusted EPS $0.15–$0.25 .
  • Strategic positives: continued Mercury outboard share gains (+110 bps in 2024), healthy dealer pipeline (36.8 weeks), sequential improvement at Navico vs Q3, and Freedom Boat Club growth; early-season boat shows showed strong brand traction across regions and products .
  • Key headwinds: elevated discounting, cautious wholesale ordering, FX headwinds ($30–40M) and tariff headwinds ($30–40M) incorporated into 2025 EPS bridge; broad cost actions expected to contribute ~$1.25/share to 2025 EPS, partly offset by ~$1/share variable comp reset .

What Went Well and What Went Wrong

What Went Well

  • Record Q4 free cash flow and strong full-year conversion (92%): “Fourth quarter…record for any fourth quarter in Brunswick’s history…full year free cash flow conversion of 92%” .
  • Market share gains and product momentum: “gained 110 basis points of retail outboard engine share in the U.S. during the year” and robust show performance (e.g., Mercury 55% overall share at Dusseldorf; Sea Ray and Quicksilver record sales) .
  • Operational execution and inventory discipline: “well-balanced levels exiting the year, with 36.8 weeks on hand…diligent management of field inventory” .

What Went Wrong

  • Revenue, margins and EPS compressed: Q4 net sales -15.2% YoY; adjusted operating margin 4.1% (-630 bps); adjusted EPS $0.24 (-83.4% YoY) as lower production reduced absorption and Navico took intangible impairment .
  • Elevated discounting and cautious wholesale: “continued lower wholesale ordering…higher discounts…OEMs and channel partners…cautious” dampened sales across Propulsion and Boat .
  • Macro/tariffs/FX headwinds: 2025 guidance includes $30–40M tariffs and $30–40M FX headwinds; Q1 cadence “a bit below where consensus was” with back-half weighted recovery .

Financial Results

MetricQ2 2024Q3 2024Q4 2024Consensus (S&P Global)
Revenue ($USD Millions)$1,443.9 (-15.2% YoY) $1,273.3 (-20.1% YoY) $1,154.9 (-15.2% YoY) Unavailable (see Estimates Context)
GAAP EPS ($USD)$1.55 $0.71 -$1.07 Unavailable
Adjusted EPS ($USD)$1.80 $1.17 $0.24 Unavailable
GAAP Operating Margin (%)11.0% 7.7% -4.8% Unavailable
Adjusted Operating Margin (%)12.5% 9.9% 4.1% Unavailable

Segment performance (Q4 2024):

SegmentNet Sales ($USD Millions)GAAP Operating Margin (%)Adjusted Operating Margin (%)YoY Net Sales Change
Propulsion$452.1 5.3% 5.6% -23.5%
Engine Parts & Accessories$226.2 11.0% 11.2% -4.8%
Navico Group$195.1 -44.3% (impairment) 6.6% -0.6%
Boat$348.3 2.6% 3.2% -18.0%

KPIs and balance sheet/cash flow:

KPIQ4/FY 2024 Value
U.S. dealer pipeline (weeks on hand, boats)36.8 weeks
Mercury U.S. outboard retail share change+110 bps in 2024
Q4 Free Cash Flow ($USD Millions)$278
FY Free Cash Flow Conversion (%)92%
Cash + Marketable Securities at YE ($USD Millions)$286.7
Debt-to-Capitalization Rate at YE55.3%

Single-period Q4 vs estimates:

MetricActual Q4 2024S&P Global Consensus
Revenue ($USD Millions)$1,154.9 Unavailable
Adjusted EPS ($USD)$0.24 Unavailable
GAAP EPS ($USD)-$1.07 Unavailable

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD Billions)FY 2024$5.2–$5.4 $5.1–$5.2 Lowered
Adjusted Diluted EPS ($USD)FY 2024$5.00–$5.50 ~$4.50 Lowered
Net Sales ($USD Billions)FY 2025—$5.2–$5.6 New
Adjusted Operating Margin (%)FY 2025—7.5–9.0 New
Free Cash Flow ($USD Millions)FY 2025—>$350 New
Adjusted Diluted EPS ($USD)FY 2025—$3.50–$5.00 New
Revenue ($USD Billions)Q1 2025—$1.0–$1.2 New
Adjusted Diluted EPS ($USD)Q1 2025—$0.15–$0.25 New
Dividend per share ($USD)Quarterly (declared 2/13/25)Prior level not stated$0.43 (13th consecutive increase) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2/Q3)Current Period (Q4)Trend
Tariffs / FXNo FY tariffs quantified; cautious ordering; macro stabilization, interest rate relief likely in Sept; inventory reduction planned Tariffs $30–40M and FX $30–40M headwinds embedded in 2025; preparing mitigation; $35M annualized tariff impact scenario discussed Headwinds elevated vs prior, mitigation underway
Dealer inventory disciplinePlan to end FY with appropriate weeks on hand; under-ship retail; pipelines high 30s expected Ended 2024 at 36.8 weeks; wholesale to trail retail 1H25, improvement in back half Improving balance; disciplined
Interest rates & affordabilityInterest rate relief expected to benefit 2025; elevated discounts Boat loan rates down to ~7.5–7.99%; promotions to moderate through 2025 Affordability improving
Product & technology (ACES/Boating Intelligence)Navico new products pace accelerating; aftermarket stability CES showcase; multiple product launches (Simrad MFD, Recon trolling motors, Sea Ray SDX 270 Surf, Bayliner V-series) Accelerating innovation cadence
Regional/Show performanceStrong Cannes/IBEX; FL hurricanes modest impact Dusseldorf, Toronto, Minneapolis: record brand performance; Mercury share up materially Strengthening show traction
Navico trajectoryQ3 down YoY, stabilization; expected marginally up in Q4 Q4 adjusted margin 6.6%; sequential improvement vs Q3; GAAP impairment due to discount rate Sequential improvement; one-time impairment

Management Commentary

  • “We had a very solid finish to 2024…significant cash generation…market share gains…optimal operating performance…well-balanced levels…36.8 weeks on hand of boats in the U.S. dealer pipeline.” – CEO David Foulkes .
  • “We generated $278 million of free cash flow in the fourth quarter, a record for any fourth quarter in Brunswick’s history.” – CFO Ryan Gwillim .
  • “Accordingly, we are providing…2025: net sales between $5.2 and $5.6 billion…adjusted diluted EPS $3.50–$5.00…Q1 2025 revenue $1.0–$1.2 billion, adjusted EPS $0.15–$0.25.” – CEO .
  • “Guidance…assume $30–40 million of incremental tariffs in 2025…$30–40 million unfavorable [FX]…no meaningful debt coming due until 2029.” – CFO .

Q&A Highlights

  • Cost savings bridge: ~$1.25/share EPS benefit in 2025 from structural and run-rate actions; ~50/50 enacted vs to come; weighted toward gross margin (process optimization, value engineering, supplier negotiations) .
  • Guidance range drivers: High end assumes modest market growth, normalized FX, no incremental tariffs beyond China 301; low end assumes market down ~5%, worsening FX and broader tariffs (Canada/Mexico exposure limited) .
  • Cadence and consensus: Q1 guide below Street per analyst; management expects back-half uplift as wholesale normalizes from historically low 2H24 levels .
  • Inventory trajectory: Wholesale trails retail in 1H25; end-2025 weeks-on-hand below 2024; historical “~35 weeks” normalization target .
  • Capital priorities: Baseline buyback ~$80M with upside if cash outperforms; CapEx guided ~3–4% of sales near-term (harvest phase post capacity investments) .

Estimates Context

  • S&P Global consensus for Q4 2024 revenue and EPS was unavailable at time of analysis due to API limit; comparisons to estimates cannot be provided reliably. Management noted Q1 2025 guidance was “a bit below where consensus was” during the call Q&A .
  • Investors should reassess near-term Street models for Q1 given management’s caution on wholesale cadence, FX/tariffs headwinds, and back-half weighted recovery .

Key Takeaways for Investors

  • Near-term caution, back-half recovery: Expect a weak Q1 (guide: $1.0–$1.2B revenue, $0.15–$0.25 EPS) with sequential improvement as wholesale normalizes off historically low 2H24 bases; inventory discipline remains a priority .
  • Strong cash engine despite cycle: Free cash flow resilience (record Q4; >$350M FY25 target) plus a raised quarterly dividend ($0.43) supports shareholder returns through macro uncertainty .
  • Share gains and product pipeline: Mercury share gains and robust show outcomes, coupled with accelerated ACES/Navico launches, underpin medium-term share-driven growth as affordability improves .
  • Watch headwinds and mitigation: FX ($30–40M) and tariffs ($30–40M) are explicit headwinds in FY25; management outlined inventory staging, pricing, supplier migration, and cost reductions to offset .
  • Valuation narrative: With trough-like earnings in late 2024/early 2025 and improving operational efficiency, estimate revisions likely hinge on show-season order flow, tariff outcomes, and FX; back-half delivery is the critical inflection .
  • Segment mix matters: Engine P&A provides annuity-like stability; Navico is improving sequentially (despite Q4 GAAP impairment); Boat margins should lift as production efficiency and promotions moderate .
  • Actionable: Position sizing should reflect Q1 softness and policy/FX risks; opportunities emerge on confirmation of wholesale improvement, continued share gains, and sustained FCF exceeding guidance.
Note: All quantitative figures and statements are sourced from the company’s Q4 2024 8‑K earnings release, earnings call transcript, and related press releases with citations embedded.

Sources

  • Q4 2024 8-K and Exhibit 99.1 press release:
  • Q4 2024 earnings call transcript:
  • Relevant press releases (shows/performance, results notice):
  • Prior quarters’ earnings (Q3 and Q2 2024) for trend:
  • Dividend update: