Brunswick (NYSE:BC) reported second-quarter results that exceeded its expectations, supported by sales growth across all reporting segments, stronger operating performance and recognized tariff refunds. The marine products company said net sales rose 8% year over year to $1.6 billion, while adjusted earnings per share increased 34% to $1.56.
Chairman and CEO David Foulkes said the company recorded its fourth consecutive quarter of year-over-year sales growth in each segment. He attributed the performance to recent pricing actions, improved product mix, new-product traction, healthy original equipment manufacturer demand and operational execution.
Tariff Refunds Lift Results, While Costs Remain a Focus
Brunswick’s quarterly results included approximately $30 million of submitted and accepted refunds related to IEEPA tariffs. CFO Ryan Gwillim said the net effect of those refunds, after the associated impact on enterprise-wide compensation plans, contributed slightly more than $0.20 to second-quarter adjusted EPS.
Gwillim said the company’s earnings outperformance was not solely attributable to the refunds. From the company’s prior adjusted EPS guidance midpoint of $1.15, Brunswick generated a business-performance beat of just under $0.20 per share before the tariff-refund benefit, he said.
Brunswick now expects gross IEEPA refunds of approximately $60 million to $70 million. Its updated full-year guidance includes the refunds already recognized in the second quarter and roughly $10 million in remaining phase-two refunds expected in the second half. The company is not including potential phase-four refunds in 2026 guidance, which Gwillim said could add more than $0.20 per share once approved.
The company also expects approximately $40 million of incremental tariffs in 2026, including the effects of Section 301 tariffs replacing Section 232 and possible Canadian tariffs. Gwillim said the tariff impact is weighted toward the first half of the year, while the year-over-year impact in the second half should be lower than in 2025.
Brunswick raised its full-year adjusted EPS outlook to a range of $4.35 to $4.75, with a midpoint of $4.55. The company said the higher outlook reflects second-quarter operating strength and net IEEPA benefits, partly offset by an expected $0.15 per-share increase in material inflation during the second half and roughly $0.50 per share in additional tariff-related costs.
Segment Sales Rise Across the Portfolio
- Propulsion: Sales increased 8% from a year earlier, driven by steady OEM demand, market share and pricing. Adjusted operating earnings rose, while margins were essentially flat due to inflation, tariffs and higher product-development spending. Brunswick expects propulsion margins to expand significantly in the second half and to rise by more than 100 basis points for the full year.
- Engine Parts & Accessories: Sales grew 9%, including 16% growth in the higher-margin products business. Adjusted operating earnings rose 19%, and adjusted operating margin expanded 200 basis points, supported by product mix and leverage on higher revenue.
- Navico Group: Sales rose 7%, with growth across business lines and regions. Adjusted operating earnings increased 143%, while adjusted operating margin expanded 680 basis points, aided by operating leverage and tariff refunds. Excluding the net IEEPA impact, core operating margin expanded by more than 250 basis points, according to Foulkes.
- Boat: Sales increased 5%, reflecting premium-model mix, pricing, lower discounts and Freedom Boat Club growth. Adjusted operating earnings rose 45%, and margin improved 120 basis points.
Foulkes said Mercury Marine continued to benefit from strong OEM demand and international momentum. First-half global and U.S. outboard wholesale orders were up more than 10%, while U.S. outboard engine pipelines declined 7% from the prior year.
Mercury’s U.S. rolling 12-month outboard market share slipped slightly to 46%, primarily due to registration declines in engines below five horsepower at volume retailers and a strong 2025 comparison, Foulkes said. Internationally, the company reported double-digit unit-order growth year to date and market-share gains across most regions, including Asia and Latin America.
Boat Market Remains Split Between Premium and Value Segments
Brunswick said U.S. main powerboat retail sales were down approximately 4% year to date through June, according to SSI data. Foulkes cited consumer sentiment, affordability concerns and poor weather in certain northern markets.
However, Brunswick’s premium fiberglass and core product lines were flat from the prior year, while its value-oriented products remained under pressure. Foulkes described the current market as “K-shaped,” with premium and core customers remaining resilient while less committed, more economically sensitive buyers of general fiberglass runabouts have become more cautious.
The company has rationalized certain value-model offerings and manufacturing capacity in that market segment. Foulkes said Brunswick would continue assessing whether additional rationalization is warranted, while also exploring new product architectures and approaches for value-oriented consumers.
Boat and engine channel inventories remained lean, according to management. Brunswick said global boat pipelines were down about 1,800 units for the year, and Foulkes said dealer inventory levels appear to be approaching appropriate levels. He expects dealer weeks-on-hand to remain broadly flat through year-end.
Recurring Revenue Businesses Continue to Expand
Management emphasized continued boating participation as a driver for its recurring-revenue businesses, including parts and accessories, aftermarket products and subscriptions. Freedom Boat Club announced its 450th global network location during the quarter, while member trips climbed a record 13% in the first half.
Foulkes said Freedom Boat Club data offered a direct indication that higher fuel prices have not curtailed boating activity, since club members pay monthly fees and fuel costs separately. He also cited the performance of the company’s parts and accessories businesses as evidence of sustained usage among boat owners.
Brunswick generated $278 million of free cash flow in the second quarter and $161 million in the first half. It raised its full-year free-cash-flow outlook to more than $400 million, citing stronger earnings, working-capital management and tariff-refund benefits.
The company repurchased $35 million of stock year to date and expects to retire at least $160 million of debt by year-end. Brunswick also said it had earned 86 company awards through the first half and plans to provide additional strategy and growth details at its Aug. 11 Investor Day in Fond du Lac, Wisconsin.
About Brunswick (NYSE:BC)
Founded in 1845 by John Moses Brunswick, Brunswick Corporation is a global leader in recreation products. Headquartered in Mettawa, Illinois, the company has evolved from its origins as a billiard table manufacturer into a diversified supplier of leisure equipment, serving both consumer and commercial markets around the world.
Brunswick operates through two primary segments: Marine and Bowling & Billiards. In its Marine segment, the company designs, manufactures and distributes recreational boats, outboard engines and aftermarket parts under recognized brands such as Sea Ray, Bayliner and Mercury Marine.
