Brunswick Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 5 raised, 2 new. The quarter’s numbers.

Read the filing

Key takeaways

• Net sales rose 8 percent: Net sales were $1,557.8 million, up 8 percent from $1,447.0 million a year earlier, with growth in all four reporting segments. Source
• Adjusted EPS $1.56, GAAP $1.66: GAAP diluted EPS from continuing operations was $1.66, up 84 percent. As adjusted diluted EPS was $1.56, up 34 percent from the second quarter of 2025. Source
• Adjusted operating margin rose to 9.6%: Adjusted operating margin was 9.6 percent, up from 8.7 percent. GAAP operating margin was 8.3 percent, up from 7.1 percent. Adjusted operating earnings were $150.1 million. Source
• Propulsion sales up 8 percent: Propulsion sales rose 8 percent to $644.0 million. Adjusted operating earnings rose 7 percent to $72.1 million, and adjusted operating margin was 11.2 percent against 11.3 percent. Source
• Navico adjusted margin reached 12.1%: Navico Group sales rose 7 percent to $215.8 million. Adjusted operating earnings were $26.2 million against $10.8 million, and adjusted margin was 12.1 percent, which management tied to the IEEPA refund and higher sales. Source
• Value segments pressured new boats: Management said parts of the U.S. and global new boat market remained pressured, mainly in value segments, as macro uncertainty and the Iran conflict weighed on consumer sentiment. Source
• First-half free cash flow lower: Free cash flow for the first six months was $160.7 million, against $243.5 million a year earlier, after capital expenditures of $98.6 million. Source

“Brunswick delivered a strong second quarter despite a turbulent macroeconomic and geopolitical environment, with financial performance ahead of expectations and year-over-year sales growth across all reporting segments for the fourth consecutive quarter”

David Foulkes, Brunswick Chairman and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Full-year net sales range low end raised to $5.7 billion from $5.65 billion, top end unchanged at $5.8 billion. Source
• Guidance raised: Full-year adjusted operating margin guidance moved to about 8.0 percent from 7.5 to 8.0 percent. Source
• Guidance raised: Full-year adjusted diluted EPS guidance moved to $4.35 to $4.75 from $4.00 to $4.50. Source
• Guidance raised: Full-year free cash flow guidance moved to $400 million or more from $350 million or more. Source
• New guidance: Third-quarter 2026 revenue and adjusted diluted EPS guidance was given for the first time in these documents. Source
• Guidance raised: Incremental tariff cost estimate for the full year is about $40 million, above the near-lower-end level of the $35 to $45 million estimate in the prior release. Source
• New: The company said it advanced strategic opportunities in unmanned surface vessels within the Navico Group. Source

Second-quarter results and drivers

• Net sales rose 8 percent: Net sales were $1,557.8 million, up 8 percent from $1,447.0 million a year earlier, with growth in all four reporting segments. Source
• Adjusted EPS $1.56, GAAP $1.66: GAAP diluted EPS from continuing operations was $1.66, up 84 percent. As adjusted diluted EPS was $1.56, up 34 percent from the second quarter of 2025. Source
• Adjusted operating margin rose to 9.6%: Adjusted operating margin was 9.6 percent, up from 8.7 percent. GAAP operating margin was 8.3 percent, up from 7.1 percent. Adjusted operating earnings were $150.1 million. Source
• OEM orders and pricing drove sales: Management attributed sales growth to steady OEM orders, parts and accessories and aftermarket performance tied to boating participation, pricing from earlier periods, and improved mix. Source
• Special tax benefit lifted GAAP EPS: The reconciliation removes a $0.38 per share special tax item from GAAP EPS, along with purchase accounting amortization and other items, to reach $1.56 as adjusted. Source
• First-half sales and EPS higher: For the first six months, net sales were $2,935.9 million, up 10 percent. As adjusted diluted EPS was $2.27, against $1.72 a year earlier. Source

Segment results

• Propulsion sales up 8 percent: Propulsion sales rose 8 percent to $644.0 million. Adjusted operating earnings rose 7 percent to $72.1 million, and adjusted operating margin was 11.2 percent against 11.3 percent. Source
• Propulsion margin flat on cost pressure: Propulsion adjusted margin was essentially flat, as higher sales, a net IEEPA tariff refund and favorable absorption offset material and labor inflation, incremental tariffs and product development spending. Source
• Engine parts and accessories grew: Engine Parts and Accessories sales rose 9 percent to $367.9 million. Adjusted operating earnings rose 19 percent to $85.8 million, and adjusted margin rose 200 basis points to 23.3 percent. Source
• Navico adjusted margin reached 12.1%: Navico Group sales rose 7 percent to $215.8 million. Adjusted operating earnings were $26.2 million against $10.8 million, and adjusted margin was 12.1 percent, which management tied to the IEEPA refund and higher sales. Source
• Boat earnings up 45 percent: Boat segment sales rose 5 percent to $424.4 million. Adjusted operating earnings rose 45 percent to $19.1 million, and adjusted margin was 4.5 percent, up 120 basis points. Source
• Corporate adjusted loss widened: Corporate/Other adjusted operating loss was $53.1 million, up 42 percent from $37.4 million a year earlier. Source

“Absent the net IEEPA benefit, including its associated influence on variable compensation, adjusted operating earnings increased substantially versus Q2 2025”

David Foulkes, Brunswick Chairman and Chief Executive Officer

Products, customers and markets

• Products and distribution improved: Management said the Products and Distribution businesses both contributed to improved profitability in the recurring-revenue parts and accessories business. Source
• Freedom Boat Club reached 450 locations: Freedom Boat Club announced its 450th global network location during the quarter and reported growth in members and trips. Source
• First-half trips up 13 percent: Freedom Boat Club first-half trips grew 13 percent, which management tied to boating participation and shared-access boating. Source
• International gains in Latin America and Asia: Propulsion reported international gains, particularly in Latin America and Asia, alongside steady OEM demand and continued high market share. Source
• Navico pursuing unmanned vessels: Navico advanced strategic work in unmanned surface vessels and reported progress on its margin-improvement objectives, with sales growth across business lines. Source

Costs and operating expense

• Selling and R&D expense rose: Selling, general and administrative expense rose 16 percent to $251.0 million in the second quarter. Research and development expense rose 21 percent to $50.4 million. Source
• Cost pressures offset by sales and mix: Management said higher sales, favorable mix and operating execution more than offset inflation, higher variable compensation, incremental tariffs and product development investment. Source
• Excluding IEEPA, earnings still rose: Management said that excluding the net IEEPA impact, adjusted earnings and margin still increased significantly from the second quarter of 2025. Source
• Effective tax rate negative: The effective tax rate was negative 1.7 percent for the quarter, compared with 20.8 percent a year earlier. The six-month rate was 3.1 percent. Source

“Certain parts of the U.S. and global new boat market remained pressured in the quarter, primarily in the value segments, as macro uncertainty and the prolonged conflict in Iran weighed on consumer sentiment”

David Foulkes, Brunswick Chairman and Chief Executive Officer

Demand, pipelines and channel

• Value segments pressured new boats: Management said parts of the U.S. and global new boat market remained pressured, mainly in value segments, as macro uncertainty and the Iran conflict weighed on consumer sentiment. Source
• First-half U.S. retail roughly flat: First-half U.S. retail was roughly flat when adjusted for value-model rationalization actions initiated last year, management said. Source
• Pipelines kept lean: Management said boat and engine pipelines were lean and fresh, positioning Brunswick and its dealers for future market improvement. Source
• Consumer sentiment and indicators: Management said geopolitical uncertainty and inflation are weighing on consumer sentiment, while it continues to see some indicators across the marine ecosystem as encouraging. Source

Cash flow and balance sheet

• First-half free cash flow lower: Free cash flow for the first six months was $160.7 million, against $243.5 million a year earlier, after capital expenditures of $98.6 million. Source
• Operating cash flow lower in first half: Net cash from continuing operations was $251.5 million in the first six months, against $309.1 million a year earlier, reflecting operating results and depreciation and amortization. Source
• Investing and financing used cash: Net cash used by investing and financing activities was $224.3 million in the first half of 2026. Source
• Cash and securities rose $24 million: Cash and marketable securities were $299.7 million at quarter end, up $24.0 million from year-end 2025. Source
• Debt-to-capitalization rate eased: The debt-to-capitalization rate was 55.6 percent at quarter end, against 56.4 percent at year-end 2025 and 54.4 percent a year earlier. Source

Capital returns and debt

• Dividends, buybacks and franchise purchase: First-half cash paid included $57.2 million of dividends, $31.2 million of share repurchases, and $28.2 million for the greater Boston and Cape Cod Freedom Boat Club franchise operations. Source
• Year-to-date repurchases of $35 million: The company said it has repurchased $35 million of shares year to date. Source
• Interest expense down 17 percent: Second-quarter interest expense was $24.8 million, down 17 percent from $30.0 million a year earlier. Source

Strategy and portfolio focus

• Boat growth from premium and core focus: The Boat segment grew sales and earnings from a focus on premium and core brands, pricing actions, operational efficiencies and Freedom Boat Club growth. Source
• Navico margin-improvement progress: Navico said it continued to make progress toward its margin-improvement objectives and remains an important contributor to technology leadership. Source
• Repower, government and commercial opportunities: Mercury Marine said it has additional prospects in repower, government and commercial markets beyond its engine programs. Source

Coming up, as management said on 30 July 2026

• Investor Day on August 11: Investor Day is set for August 11, 2026 at Mercury Marine headquarters in Fond du Lac, Wisconsin, with live Q&A and facility tours. Source
• Strategy video before the event: A prerecorded video strategy presentation will be posted on the company website before Investor Day. Source

In management's words

“we expect materially higher adjusted operating margin this year, while maintaining our commitment to keeping pipelines healthy and preserving balance-sheet strength”

David Foulkes, Brunswick Chairman and Chief Executive Officer

Figures management reported

Risks management discussed

• Demand: Value segments of the new boat market remained pressured, and macro uncertainty weighed on consumer sentiment. Source
• Demand: Management said prolonged geopolitical uncertainty and inflation are weighing on consumer sentiment. Source
• External: Management said the tariff environment remains fluid, and mitigation actions are offsetting external cost pressures. Source
• Operational: Propulsion margin was held down by elevated material and labor inflation, incremental tariffs and product development spending. Source

Earlier plans management reported on

• On track: Management said it remains on track to retire at least $160 million of debt this year. Source
• On track: Mercury Marine said five new engine programs are on track. Source
• Ahead: Management said second-quarter financial performance was ahead of expectations. Source
• Not stated: Management said it is committed to maintaining an investment grade balance sheet and returning capital to shareholders. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.