Brunswick Corporation — Q3 2026 Earnings Summary

Financial Performance:

• Consolidated net sales for Q3 2026 were $1,453.9 million, a 6.9% increase year-over-year compared to $1,360.2 million in Q3 2025.
• GAAP diluted EPS from continuing operations was $1.01, while As Adjusted diluted EPS was $1.58, representing a 62.9% increase versus Q3 2025.
• GAAP operating earnings were $104.0 million; As Adjusted operating earnings were $146.7 million, up 37.9% year-over-year.
• As Adjusted operating margin expanded to 10.1% in Q3 2026 from 7.8% in Q3 2025, an increase of 230 basis points.
• Net cash provided by operating activities for the first nine months of 2026 was $438.8 million.
• Cash and marketable securities totaled $279.4 million at the end of Q3 2026, up $3.7 million from year-end 2025.
• Debt-to-capitalization rate was 54.2% at October 3, 2026, down from 56.4% at December 31, 2025.

Guidance and Future Outlook:

• Full-year 2026 Net Sales guidance increased to $5.7 billion to $5.8 billion.
• Full-year 2026 Adjusted Operating Margin guidance is approximately 8.0%.
• Full-year 2026 Adjusted Diluted EPS guidance is approximately $4.65.
• Full-year 2026 Free Cash Flow guidance is $400 million or more.
• Full-year 2026 Debt Retirement guidance is $160 million or more.
• Full-year 2026 Share Repurchases guidance is $80 million or more.
• Management expects to continue decoupling financial performance from overall U.S. new boat market unit sales trends despite macroeconomic uncertainty.

Business Segments and Product Lines:

• Propulsion: Sales increased 6.6% to $570.5 million; Adjusted operating earnings rose 51.1% to $68.6 million; Adjusted operating margin expanded 350 basis points to 12.0%. Growth driven by steady OEM demand and high-horsepower applications.
• Engine Parts and Accessories: Sales increased 4.7% to $380.9 million; Adjusted operating earnings rose 13.6% to $93.6 million; Adjusted operating margin expanded 190 basis points to 24.6%.
• Navico Group: Sales increased 5.8% to $197.7 million; Adjusted operating earnings rose 36.4% to $12.0 million; Adjusted operating margin expanded 140 basis points to 6.1%. Growth supported by OEM wins, aftermarket performance, and new product introductions.
• Boat: Sales increased 9.5% to $394.4 million; Adjusted operating earnings doubled (100.0% increase) to $14.2 million; Adjusted operating margin expanded 160 basis points to 3.6%. Strength driven by premium and core products and operational efficiencies.
• Freedom Boat Club: Estimated to account for close to 70% of the North American boat club market.

Market and Competitive Landscape:

• Boating participation remained healthy throughout the quarter, supporting demand for parts, accessories, and aftermarket services.
• Mercury Marine maintains its market-leading position in the U.S. and is gaining share internationally through expanding dealer, OEM, and retail relationships.
• Premium fiberglass and core U.S. boat brands continued to outperform broader industry trends.
• External headwinds include persistent inflation, higher borrowing costs, and geopolitical uncertainty.

Risks and Challenges:

• Ongoing material and labor inflation, freight costs, and commodity input costs.
• Macroeconomic factors including inflation, rising interest rates, and global uncertainty affecting consumer sentiment and discretionary spending.
• Potential impacts from trade policy changes, tariffs, and currency exchange rate fluctuations.
• Supply chain disruptions, supplier manufacturing constraints, and transportation issues.
• Risks related to cybersecurity events, product liability, and regulatory compliance.

Management Commentary and Tone:

• CEO David Foulkes described the quarter as "strong" with "solid execution across the enterprise" and financial performance ahead of expectations.
• Management highlighted the resilience of the premium- and core-focused brand portfolio against value category pressures.
• Foulkes noted that lean pipelines and balanced OEM orders support continued wholesale growth.
• The tone is confident regarding the ability to deliver sales growth and margin expansion despite external challenges.
• Aine Denari will succeed David Foulkes as CEO effective January 1, 2027.

Other Key Points:

• Share repurchases of $75 million were executed year-to-date.
• Capital expenditures for the first nine months of 2026 were $148.9 million.
• Dividend payments for the first nine months of 2026 totaled $85.7 million.
• Cash paid for the acquisition of certain Freedom Boat Club franchise operations was $32.5 million.
• Payments of short-term debt totaled $100.0 million in the first nine months of 2026.
• Mercury's five major new outboard development programs remain on track.
• Navico Group executed cost-reduction and portfolio-optimization actions to offset inflationary pressures.