Brunswick (BC) Q4 2023 earnings summary

Executive summary

• FY 2023 net sales were $6,401.4M, down 6.0%; adjusted EPS was $8.80, down 12.3%, while free cash flow rose to $473.4M from $191.5M.

• FY sales and adjusted EPS were the second-highest in history; Q4 sales fell 14.0% to $1,361.9M and adjusted EPS fell 27% to $1.45 amid softer wholesale demand.

Financial highlights

• FY adjusted operating earnings were $869.3M, down 17.1%, with a 13.6% adjusted operating margin; GAAP operating earnings were $734.9M, down 22.5%.

• FY diluted EPS from continuing operations was $6.13 GAAP and $8.80 adjusted, down 32.3% and 12.3%, respectively.

• Q4 GAAP operating earnings were $108.3M, down 43.5%; adjusted operating earnings were $141.9M, down 29.8%, and adjusted margin was 10.4%.

• Q4 sales declined 15% on a constant-currency basis excluding acquisitions; U.S. sales were 69% of revenue and international sales 31%.

Outlook and guidance

• FY 2024 guidance: net sales $6.0B–$6.2B, adjusted operating margin 12.0%–13.0%, adjusted EPS $7.00–$8.00, and free cash flow above $350M.

• Q1 2024 guidance: revenue $1.3B–$1.4B and adjusted EPS $1.30–$1.40; 2024 U.S. marine retail unit sales are expected to be flat YoY.

• Cautious outlook, particularly for Q1, with dealers, OEMs, and retailers expected to maintain measured ordering amid economic and consumer uncertainty.

• 2024 EPS bridge starts at $8.80 actual for 2023, with pipeline a $1.50 headwind and offsets including repurchases, market share and cost actions; indicated guide is $7.50.

• 2024 assumptions include $50M–$75M working-capital use, ~23% adjusted tax rate, $15M tariff impact, ~$225M depreciation, ~$225M capex and ~$110M net interest expense.