Brunswick (NYSE: BC) reported second-quarter results that surpassed its own expectations, driven by sales growth across all reporting segments and stronger underlying operating performance.
Net sales rose 8% year over year to $1.6 billion, while adjusted earnings per share climbed 34% to $1.56, marking the company’s fourth consecutive quarter of year-over-year growth.
Chairman and CEO David Foulkes credited broad-based momentum across the business, with gains recorded in every reporting segment for the fourth straight quarter.
Brunswick’s Marine segment, which designs, manufactures and distributes recreational boats, outboard engines and aftermarket parts under brands including Sea Ray, Bayliner and Mercury Marine, contributed to the quarter’s performance.
The company’s Freedom Boat Club reached 450 global locations and posted a 13% rise in member trips during the first half of the year, signaling resilient boating participation despite mixed consumer conditions.
Premium and core boating demand remained stable throughout the quarter, though management acknowledged that value-oriented boat sales continued to show weakness in the current environment.
On the tariff front, Brunswick now expects gross IEEPA refunds of approximately $60 million to $70 million for the full year, with roughly $10 million in remaining phase-two refunds anticipated in the second half.
The company is not incorporating potential phase-four refunds into its 2026 guidance, though Gwillim noted these could add more than $0.20 per share to earnings once approved by regulators.
Brunswick also expects approximately $40 million of incremental tariffs in 2026, including the effects of Section 301 tariffs replacing Section 232, along with possible Canadian tariffs weighted toward the first half of the year.
The shift from Section 232 to Section 301 tariffs, combined with new Canadian tariffs, is estimated to create a $5 million net negative impact in the second half of 2026.
Variable compensation expenses rose as a direct offset to tariff refunds, since the company’s incentive plans are tied to earnings and free cash flow performance without manual adjustments for one-time items.
Brunswick raised its full-year adjusted EPS outlook to a range of $4.35 to $4.75, with a midpoint of $4.55, while maintaining revenue guidance of $5.7 billion to $5.8 billion.
The company also expects to generate at least $400 million in free cash flow for the full year, reinforcing management’s confidence in the business trajectory heading into the second half.
Management clarified that the $0.30 EPS guidance increase reflects a $0.20 operational beat from the second quarter and a $0.10 net benefit from phase-two tariff refunds.
Third-quarter adjusted EPS guidance of $1.20 to $1.40 came in below the $1.45 analyst consensus, while revenue guidance of $1.4 billion to $1.5 billion was at or below prevailing market expectations.
Brunswick plans to retire $160 million or more of debt by year-end to preserve its investment-grade balance sheet while continuing its share repurchase program.
Geopolitical uncertainty and prolonged conflict in the Middle East were cited by management as factors weighing on consumer sentiment, particularly among buyers of value-tier products.
Management also directed investors to an upcoming event on August 11 at Mercury Marine’s headquarters, where attendees will meet the leadership team, tour the facility and participate in on-water demonstrations.
