Brunswick (BC) 26 Oct 232023 Q3 Earnings call transcript

Good morning. Welcome to Brunswick Corporation's Third Quarter 2023 Earnings Conference Call. [Operator Instructions]. Today's meeting will be recorded.

If you have any objections, you may disconnect at this time.

introduce Senior to Finance President like Corporation. Brunswick would Neha Vice Clark, Enterprise I

begin. may You

Ryan and morning, on are CEO; this me for the morning and Brunswick's Foulkes, Good Dave you call thank joining CFO. Gwillim, us. With

results we these Please like remind would that keep our will in everyone remarks, statements expectations. forward-looking actual call, to include this mind with certain prepared could during about Before from begin comments I differ our materially that future our results.

to consider, filings factors refer to release. For SEC these details please our recent and on press today's

at documents All available of these are on our website brunswick.com.

presentation, of be non-GAAP financial financial our unaudited accompanying statements the and appendix to to information. provided are certain presentation in the consolidated financial During non-GAAP we results. will measures to today's GAAP sections Reconciliations reconciliation of this referring the

now will I Dave. to the over turn call

Thanks, everyone. Neha, morning, and good

half third composition a products, cost continued Our resilient the efficient despite backdrop. solid in portfolio billion and and our We at free sales share new control net earnings delivered stronger-than-expected flow the the our operations range. macroeconomic businesses quarter facilities, adjusted in in upper share comprehensive quarter drove strong of gains, guidance slightly of and ongoing the strengthen per $X.XX $X.X earnings as cash of challenging delivered our measures market

cash free strong million cash $XXX in of generated flow cash in year. year-to-date flow resulting flow prior free quarter, conversion free also and the We of $XXX higher third million XX% than delivering

with share line pace generally continue to year. of aggressive year-to-date has year bulk U.S. The to share million points repurchases Marine of single market outperform digits, in is to versus this continued brands retail to on our In new $XXX market addition, market year-to-date. market. the solid we with share outboard Brunswick be high down executing repurchases, up XX estimates and continue capture prior Mercury gains finish with basis

our channel We're with of closely and global allows actively boat season, the of avoiding historical levels with hand. and inventory marine model balanced As we carry closed representation overstocking. our we quarter field the good portfolio third working XXXX, out in which continue levels, with line core generally on we inventory manage to move each while weeks dealers maintain targeting location a partners our being to to norms exiting XX.X

providing new across In progressing actions products in targeted our implementing addition, for excellence and investing we're goals strong support and enterprise. retail, technology, but cost operational structural promotional reduction the

some turn the highlights of I'll segment now for quarter. the to

Propulsion engines, of came capacity quarter earnings Our growth with by XXXX. high rigging, third as XXX-horsepower XXXX sterndrive in outboard gained XXX market offset online. weaker engines line in production and share basis horsepower controls over points by business versus lower delivered top and high-coursepower versus a slightly additional relatively Driven Mercury record outboard growth especially sales. in categories

During collective agreements today. the the addition, ratified that outboards Fundera electric of also with units ] [ the facility strong production manufactured production with quarter, continued business union And Avatar in bargaining successfully Wisconsin. a in X,XXX its new workers X-year engine representing

to some back inventory seeing orders of is Mercury scale slowing as off-season, the into move the control XXXX. we into OEMs production As OEM going field

We sentiment and shows. expect customer XXXX early remain assess cautious XXXX late they OEMs at to boat as

high allowing While headwind, a the horsepower Mercury in market, this repower is short-term especially is engines. gain in it to share

and the year earlier boats trend. up performance in moderated. consumers and were business dealer business the the as in portion use improving relative of Our Reflecting for showed Distribution down inventory improvement Engine versus prior season. Parts steady in Sales sequential quarter. sales bucking which products Accessories from their an year the Business were primary demonstrated X% retailer as the year-over-year, patterns

up were XXXX. of the quarter sales third XX% versus segment Overall,

sales. operating and into the A margins Group improving move is season. Navico higher RV we orders anticipated, trends as well-received holiday driving in fourth despite OEM and we with as enter retail stocking channels. lower gross the slower recovering aftermarket third marine Retailer XXXX, quarter, As posted new pull-through versus strong offset offerings, quarter product

of operating expenses reduced Additionally, efforts planned prior to continues result restructuring acceleration in year. versus

business boat while to members received. Freedom is XX,XXX Bayliner network-wide. sold and nearly our [ production memberships year locations launched also ] marine XXXX, refreshed synergy adventure performs more plan, has continuing pipelines. Finally, manage new to than exceptionally the brand agreements a generating sales and while brands has introduce [ continues gaining XX,XXX Nevan our All model grow now across strong and and Boat ] well to for and out membership Premium space nearly been white recently Club share XXX models covering portfolio. adjusting brand The

factors, include a employment, Lifting and strong rate stabilizing to moderating external of factors interest increases. pace reduced inflation

remains However, season strong. selling main despite credit and Despite buoyed remains to strong consumers. rates the fairly book consideration, some promotions. prices, promotional purchase participation boating availability the On in environment extent note, headwinds and higher interest high a positive stable by XXXX, strong for

ahead monitoring excess office at XXXX, Going season, avoid early XXXX and upcoming of customer anxious healthy, shows. but behavior into the and also dealers we'll boat uncertain inventory an to are holding be closely

smaller shifts order With production with The with to anticipated continuing products. Resulting continues Mercury be order relative taking XXXX. display rigs production boats value in products, OEMs replenished, Navico immune, lower reducing for horsepower premium to in engines larger for in by both QX field but to out greater OEM pipelines strength. weeks lower Group retail and not and rates are or engines of softness align

set term, pressure in half these maintaining short may of but XXXX. we are Given predictable factors, which a production first discipline will more up for add the

saw by strength of basis. global sales retail sales currency has the X.X% with is XXXX. down a lines. both X% quarter a expectations brands, new performed revenue on share, particularly boat versus than planned of flat up view fiberglass our line showing supported industry growing in constant strong through Shifting better a the premium pontoon, was decline marketing quarter. the XXXX relatively picking now XXXX market promotions year-to-date versus Overall, the industry, Brunswick with in and select and with U.S. Overall, markets product on to retail share Year-to-date, international we performance U.S. and by flat in to year-to-date, versus Brunswick generally relative in tow periods.

XX-horsepower up XXX industry retail to X% the Industry bringing Mercury units versus Engine continues in gains share retail of third basis Outboard quarter greater X%. third were down the quarter unit in prior to year, outperform points than categories. year-to-date with

ending actively within line managing expectations weeks. at levels weeks XX.X XX norms in weeks are on year year-end a approximately healthy achieve approximately of and both X XX the on XX,XXX at anticipate units exiting units hand and at approximately of XXXX. pipeline quarter to the historical We weeks and with hand with with level global pipelines levels We end versus U.S. XX,XXX

As this normally the be will international case, higher. boat pipelines

some across now our businesses. exciting shift discuss new me to growth opportunities Let

add easy manufacturing Through in brand flights product and network. largest already or our extended and the to high the We on and developments product pipeline. and to activity with product without categories. emerging thrilled is flight to the as insurer the allows an further sale rise surfing technology world's are coastal for has and a to hours premium Mercury its plans access flight waters team experience an flight Marine e-filing in assistance is marine disruptive Brunswick, long extended market an space the portfolio boat wake and for The that line and distribution to many will share. scooter have need

year. Cannon at and product As the [ in in has strong brand and recently been are been adventure the which the International the XXXX launched X nominated begun boat out sold Boat best both of class for popular popularity European The reception of products, media Europe Power earlier, gaining new and have I mentioned Nevan models U.S. very Year Zero line is we the our nearly awards. initial for ] of XXXX and the Boat This and premium production model Show. have new very

provide we You that finance QX. rapid few can this may to ago, an retail in a integrated partner Brunswick websites financing. to finance online customer supporting and seen into Finance, We're out that roll Brunswick to solution have solution be addition promotional announced beginning dealer approvals also days just in

to Xth region as Freedom location. substantial see A&CP new growth. Boat expand continues its Australian for the in a the And We recently market, Freedom opportunity rapidly announcing Club finally,

financial now our outlook. turn comments I'll call the additional performance over to on and to provide Ryan some

Thanks, Dave, and good everyone. morning,

benefited reaching resulting and market price sales net annualized previewed well-received month, to sales market and As and When quarter from offset levels by X%. last softening down were Brunswick gains from each prior of inventory quarter products, Investor decreased at Day delivered market solid benefits Net share retail $X.XX despite softer X% conditions. in businesses. normal EPS from lower wholesale a orders segment new field increases adjusted conditions third the year, record our third compared throughout

lower Operating higher slightly versus higher exchange of the margins as enterprise. prior sales, input offset down impact currency the control year than benefits the costs, rates earnings from foreign absorption unfavorable and were more cost aggressive measures and throughout impact the of

repurchase XX%. solid flow primarily generation, of had Year-to-date free remained margin working from due of also down the quarter and despite million cash strong activity. operating operating capital cash continued performance across to a the Lastly, record prudent results adjusted resulting aggressive stable XXXX conversion slightly expense $XXX control EPS, free we the Sales environment. adjusted uncertain in in the generation share macroeconomic gross are steady EPS case flow from the with stronger margins resulting of company, a and in

prior focus cash performance Our challenging cash strong is flow free this continued reflecting in on our significantly driving market. year outpacing

related and labor and of Drive our Now outboard earnings quarter favorable of the more by we'll continued control Stern together starting annual as year demand was horsepower offset pricing low with mid-range with sales lower higher to horsepower engines slightly and of the were the impact measures. engine which high offset XXXX higher partially reporting sales, each to decreased costs, unfavorable mix order in from Revenue the a input due versus from benefits related benefit expenses currency strong [indiscernible] foreign to prior declines outboard successful look ratification and cost versus the customers the Propulsion to Business. product Operating at agreement exchange than segment, repower including Mercury the up product. rates, third

primary market gains but we selling may earlier, reductions additional to we us mentioned and progressive the enable dealer season enter in products This sequentially throughout improve the business production to that with XXXX. that engines Business still high-margin X% The impacted Parts Engine into our market more more a United sales will The but up sell third continues XXXX. impact our overall of anticipate as Accessories share Dave for XX% versus will than grew will in the until XXXX demand by X% engines. XX% the to over sales prior we Propulsion down year in by abate the the will boat by continue As business XXXX, start but OEM be not decrease year and that of be maintain quarter the and QX XXXX, versus retail exit the States. channel,

distribution but to that orders operating climates from winterize distribution in both continue continued down prior trends remains year to strong the begin center. newly to down boat were and in and businesses Distribution opened as XX%, Note positive costs were product. slight improve versus and to the decline October customers XXXX. usage their trend earnings products Northern in sales to sales the Segment earlier transition related due

XXX Marine helped performance earnings these had offset but margins improved with as up channel cost sales. basis sales sales accelerated strong steadiness together RV from benefits operating As impact OEM actions X% dynamics, and up were X% product anticipated, Group of customers. operating more due down Navico adjusted were in to reduction points and third an expected than the and offset Segment reorganization adjusted softness quarter were new aftermarket efforts as lower

time for holidays, season only time as reordering The at the continue retail wholesale the inventory to are consumer holiday the levels but a will health aftermarket we watch important business desire to fourth spend sales quarter for Navico where normalized. patterns is retailers drives not an and and

together to quarter, primarily continuing due lower earnings the Freedom cost business sales, is X% which manage to offset of Sales production elevated in focused white plan, revenue with membership had the and very contributing third while a reduction activities. uncertainty. segment's Boat earnings were acceleration, Club, down to of during included continued solid new adjusting space Boat models the given performed and gaining quarter XXXX, another approximately retail. by share levels business margins partially discounting operating Adjusted quarter seeing despite down while macroeconomic and XX% introduce drive Boat our the reductions, Finally, to steady the brands production end-of-season versus were pipelines.

are EPS norms Although against of focused and we're regions, flow on primary a our resilient while in pipelines initiatives. selling we strategic market entering cash and constraining in challenging demonstrating to delivering historical our most the appropriate off-season our

market Marine and support ongoing inventory select in marketing resulting measured sales ordering continue steadfast uncertain retail our activities levels. in RV schedules but to target plan ] patterns retail by [ channel and balancing The we remaining promotional with and products to and reduced partners are while conditions our by on production customers

margins As a at approximately adjusted $X.XX approximately to $X.X XX% of result, we adjusted revenue as and of and EPS Day, operating Investor previewed anticipate $X. billion of billion,

million trends free anticipate cash and cash working We continue of year. more and the conversion free to capital see for flow than positive flow still $XXX generating

have assumptions that P&L Lastly, we also year have X we full updated.

increasing recent the $XXX of further repurchase share repurchases price year. are full continued our we and Brunswick strong to target given performance exceed dislocation, for cash our flow First, million

result, XX.XX outstanding a average slightly of we anticipate million. As shares diluted lower approximately

with U.S. year Second, larger anticipate foreign now strengthening a we the slightly headwind dollar, million. approximately full $XX of exchange

back I for pass concluding will over the now Dave remarks. to call

Thanks, Ryan.

Before recent Brunswick this of our recognition record. XXX examples wanted on pace to for and people, products. share We're over for culture some received awards all-time business, we close, major an year, I has

one our fourth to to creating employers XX% greenest for companies, to most enduring business our a commitment Brunswick sustainability commitment quality Newsweek's world's choice ranking the integrity, the named and has employer named improvement. our world's that is of employees. also initiatives a named the been of Forbes XXX an to of further the was trustworthy reflecting to and companies, inaugural world-class Brunswick in reflecting of global For environment list and in our list best This top list. numerous safety and America's testament award companies final in of was the commitment year, our being made the consecutive

Best Boat and mentioned also on won for further new Finally, with way Motor to our global Bulk the again our below the to XXX already but new our Show, Boat now evidence award Thank I our Ray We'll [ products across continue at Nevan stage. for Sea be for [ meters the the in recognized ], Group's joining excellence begin commitment technology leading X products of businesses. ] the SPX [indiscernible] Q&A. call. the success Magazine you

Megan with [Operator Instructions] Alexander Our first question is from Morgan Stanley.

update did commentary you case 'XX. I you on expectation guess on boat us flat maybe just your for base Could give year? maybe retail some a market next

I yes, think, that's yes, still case Megan, base assumption. our

obviously, and but as as we're seen, match to retail think achieving year. into trying I we go wholesale next between and think you've I match good a

enough retail overall basically, levels is I are we're obviously, that a think like assumption really for the we're at XXXX. more start,

down about So since we've the pulled peak. been XX%

Price next selling the prevailing -- that pretty thing conclusion to season the really for that other incurred. us that consumer is the this think that happened year. be already we most similar have of expect increases would I leads to the really year, conditions price

very levels, to rates, year. interest during if rising more, historical now next see too balance we is toll, similar don't much on pricing So

on So as also were we we next year. pretty to later as were we year, seem not promotions in QX, -- the be were They heavy effective.

of believe recognize think to the activity market conditions where I that combination probably us pretty a in some first that similar us is, So kind reasonable to baseline a this promotional leads from consumer increased quarter are year, the assumption. to of that's

for could course, various Of reasons. it be different

And way. in just seeing in in the premium the day. Fort top first the a We actually, sales the I are end market. first feedback resilience that, more of show, still boat from premium say interestingly, the the behaving strong is obviously would day of Lauderdale obviously That's not are market on homogenous in a show.

was that encouraging. So

assumptions. are essentially that those our components of some the So go into

helpful. then That's margin on if that's line puts talk you still the through of Can and to the Okay. bottom maybe some a just And the the getting case. line. maybe takes and maybe follow-up,

about I in also cash headwinds, improving. P&A, be headwinds having destocking also and interest are you strong some you which Boats to know in but Propulsion, You maybe about lapping driving some you're some talked and Navico expense seemed free talked significant but flow.

for year? $X a about at next case we're that Is looking that is So think as base floor the to 'XX? the for right

Megan in it's set the take certainly I'll one. set it's or taking Ryan. a reverse, And $X and this but know would next go possibilities not of October year. ahead to floor, share sure be we I'm a say today in outcomes for that of in enough a

guidance, next more us is competition and in give just we'll we see but definitive definitely wait months set. bring of handful 'XX to what the $X the before So have

and think you puts I them. takes, of had The several

that the of there Historically, was on some really is accessories we're back side, as sequentially I comps grow kind low percentage mid-single-digit that year-over-year. a [ you're comps, out in, kind on we plus both year-over-year normalized spooked think I to seeing P&A would. performing and and of quarter now ] people that it to quarter think at of thought business Harton kind Engine

as So get next to I see year, the on going margins goodness Engine think to into P&A business. you're we due

also think Navico. see on on growth you'll margin I

going I margins that of or that and been and the its think good full as probably reorganization year position you benefit move planned on all that near coming off to pretty is Navico of trough get they've we've of done, forward. a you're work

that's EPS benefit will will think but it on but and I be there. the that margins, also to minimize a where trading have that are that, good there. the combat on help say is given refinance share on will I impact obviously to X.XX% to would going very that at the interest line, the notes We're the we'll be something smart aggressive sadly, try today, But piece to that we're our continue real. repurchases obviously, be

been the Navico So strong businesses on line, probably and across XXXX bit in which And in clear margin. I pretty XXXX, and a some see retail the we that's little get P&A think of wholesale, and in retail matching retail at really Propulsion. wholesale, Boat levels. pretty sustainable you difference have movement how about offset It's even

next Hardiman Citi. with from question is Our James

want really imagine, on can to, Ryan, further color. I that. good you was of dig some that as even

figure some what mean, of the year? that As XXXX. year. where do we we will think headwind finish as to to I trying that a sort trying there X,XXX neighborhood I'm obviously, think about a was about Boat out get And wholesale XX%, headwind, I the and to represents earlier between your just retail is to in Business, to delta in low? this the to high, I look about unit replenishment

of I think Ryan will and I tag team. kind

the we or we wholesale so U.S., than think at did I in more produced units retail. X,XXX

I probably in So say so different would terms almost entirely of dollars. but they units, value mix a

headwind as would a a year in progressive So the I we've we that bulk were QX group, and higher go through done cost impact but so next the say and particularly were into across not including enterprise, obviously represents a this there headwind. the huge that year, takeouts QX.

So some on XXXX, Ryan? of benefits going basis have should there, a cost kind rate into run we

Yes. No, add. Nothing to that's correct.

That's helpful.

guess through presumably, a be previous say, conversations, hard guess can in talked lot what about from more do sort segment to Boat suffice Navico. it an or learn again, line. confidence the highest I I we're hell real outgrow X your at propulsion what's the to year? next will had level P&A, to to going and you where a you top bottom previously, you confidence stand today? next be of like segment unpredictable Engine grow up of water year. now, least grow line. P&A it here And the both lot you and the market So that to for it's top the that high that would allow that, degree going Where months and one of on That's seemed

the I I share -- have gains a but so continued Mercury at of secular trend XX%, I overall, you show, would clearly the think Fort we had share Mercury might here. on proxy is that close some water, coming think, nice showing. cyclicality headed. best market on the Lauderdale is which as tell top to and where for XX% by far out that share share And be you our know, kind of new of a engines boats

supporting strong. extremely trends horsepower secular the to be Mercury think I So high continue

the how the our engines Of say where boats depends would the the But strong, performs thing But continues as to out. horsepower just new exactly seeing I difficult higher same strongest. And all Europe, constructive continue on in we both going that. OEMs. course, year. we how boats with greater in customers in Very share also are convert business end, next horsepower premium it OEMs, generally to buy OEMs, generally, continued share more capacity repower market the have We're see remain domestically. on have to premium gain very but net higher not also to on existing exactly available, be to also we

lot So going how in a well of we depend to of as I it's as net all negatives. the out, potential have but I positives these on some think things think end,

Okay.

And so confident grow like previously you real it year. seemed to Propulsion were that clarify, next would just

here. Is it of as like come of with depends more sort sounds sit we that data to Obviously, Now accurate? lot in. a sort uptake

Mercury exactly high that all our the a a say slightly end in end don't the than think to very for yield I by or going better place. I trends -- -- this that confident I market on constructive year think. are stronger say so gains. will and that's that's how still high-horsepower would I Propulsion of next year, the worse But of assumed in is end on the I think good a share than things assume? you. is than overall we're will in be we we really out that the but would up and secular performance slightly horsepower the This I basis know, are that that next of the to investment

we're share the harvest investments them We've we is products. forward. We've investment And really we new still capacity. our gain can here done other the moving at time investment done other things, done to our investment. and on be have but probably There'll on a those now good the where news use

Our Xian with Paribas. is next question BNB from Siew

On at ASPs year floor pretty But XX%. weeks, hand, you expect with mentioned much which line guess inventories, about I financing, you the higher weeks higher plan to and given is XX on in exit XXXX and hand how market. an uncertain that -- maybe how XXXX? think think about do on kind than be do of you Do retail think you that? actually lower should like you about Or

Yes.

I kind I in XXs had level. a think think and have be, especially forwards we -- saying we've been we've What on needs this while. is of weeks a for at the lower where back market always hand that to probably

could see as have selection obviously, floor limits moment. I units XX,XXX dealers stuff. but And credit portfolio. for XXXX, be, a units. it our of overall the and So versus level, representative is to issue retail the don't is that significant XX,XXX lower kind unit us basis, some On plan reflection, a a that of that extent, a availability the of and at financing than

a really the is between and channel issue that value of think limits inventory the I right predominant just get don't level and think at specific kind prevailing or there our credit desire and inventory that's alignment overall, partners with moment. I us the to of dollar is

land line. forward-looking appropriate. of like a EPS ability kind about the seems not to if obviously, flat, a to be that basis I be inventory It's think extremely bad on to basis, the And us plane you with to on is a if which retail trick, in and honest. XX of $X this think is after year a trailing weeks it,

about that very think think feel it. I we So I comfortable --

on That revenues, through you on makes maybe but the Propulsion can the hold great. And bit Okay to margins sense. of margin? were Maybe a walk lower maintained. guidance, then some bridge

in Business today be of gross I but pull certainly the Propulsion that one. is a to with if it horsepower. larger hold terms in take it And And gross able the to they several levers OpEx, continue Yes, volume. can as frankly. because that's has line not is even mainly starts The to there, high little steady, strength margin up bit margin Xian, of despite the

in were a as also in strong So orders with in that and comes there's a bit out on quarter, the We bit -- of pieces. little really, we're little dealer a that's Obviously, really year. the a as in currency biggest kind those of abates earnings hoping and bit are had the the But there. of run we the front a that quarter, headwind well. premium mix that,

I obviously had incident the obviously noted year, just a Yes, for with a issue issue period. absorption was this security we which an one-off

right. That's

question Baird. is from next with Our Craig Kennison

they I XX% know well I I wanted call, is certainly, year, expectation industry, to revisit next case sit its may mind, a decline would and there. have guess, next and flat a my retail I pretty an cater a But to just lower this base a think know be it's in fantastic your they still early. for on which but supplier that gap would Patrick, for retail year. above wide year to what I being market the note I end, next expect.

does what kind playbook recession And to that and that earnings So whatever Brunswick? the quickly is, be? might can you how protect I question to power, pivot floor the you my think at guess of

Yes, drive flattish retail of craig, went I that the through kind a us to next year. really assumption assumptions a

we're expense. levers the what seen those we very year of moment. We always down. quite this. lot, Obviously, this bit of kind conditions it I at call and quickly we year doing to I a the that to we it. for right. out pulled think stand it we think was. back gave to where vary about But year but decent The to That market unfolded thought came by expense mean have modestly all think we're kinds this operating I'd market doesn't is you've this I on operating a effective a earlier have as work very feel at significant fall, began but and But

the as progressive obviously that was So and year. -- during we

influence we pricing still more. recreation But higher supply reductions, rate are have pretty COGS pivot see for operating cost to from We So we market on kind market things, cost as lines on the as and we favorable were people including on change. generally, working somewhat they us. as to softer the dynamics expense XXXX. reductions across those reductions, whatever was beyond, negotiate able into some all work softer of getting run our We're customer well. a things this more design doing year that basis Obviously, go and

effective that. of doing plenty So levers I have we think demonstrated still pull consistently we to how and we

would just Craig, know sales after be level below would add caution down And of but you from the the GSE. I I'd this, year I think this XX%

obviously, to an seem extremely forecast even that So would this in seen market, but is given their we've year. the down everyone environment be doing what scenario the best to

Craig, higher side. unique wouldn't period that of go-to-market neglect this we're through also promotional I out, I to new I -- rates. bridge do of kind them what on think, flexibility can of The we is some just Brunswick solution gives customers kinds, various rolling wouldn't the us Finance financing offer

I our -- doing. COGS on pull a side, expense So that multitude go-to-market think the of the this side is we've side shown levers and on effectiveness could in that have to we we on the

year, Craig, we $XXX convert to lastly, do. on maintenance XX%, working could cash and to guess, levels, I want not mean and Obviously, that pretty our to million XX%, that's take next year. to CapEx needed we side. capital our I'm proven which to been has I anticipate then would million. if starts $XXX I we saying is capital but strong this strategy be to could generation ability the And we something which would at down

into just cash generation, have don't go to being lot service that low. of your and our time would buckle scenario, fixed a this debt obligations down we've of more capital, proven ability because in cost other do of to of we we even cost whole mode, at relatively our So

but Craig. this, question, an belaboring I was It great, think. Without it was interesting

are on market we XX% hit ever ideal. $X below year finish This less but been than XX% EPS our our if be year that in up will we've We year, second this best on last about XXXX. will be conditions will EPS

we So continue I to think will perform.

Our Jaime next Katz with Morningstar. question from is

the partners that maybe a it you due bit more retail consumers little I'm I implies through for period bit little also cautious and a the financing are are just time. it you this of financing getting their partnership? But help talk that about wondering currently? changing mentioned retail know other if lending in impetus Could new just was tune maybe

at it all. doesn't that imply No,

we think have Water Finance. in Blue been have called business financing, retail a I the we

and for for So an retail consumers finance kind in integrated a This really much is easier of digital to just the access. financing while. arena that solution quicker is we've been

So embedded website. a it's in

move the can also not a boat figure would can the for to least only boat, get you that or financing at immediately through You approval approval for -- cost provisional but dealer.

versus most is see us us rates cautious a criteria But this obviously, in it promotional that more with on of and lever things, potential then flexibility finance those because allowances, new we're the to option So if allows the offerings, kinds environment, at things. another and have other we is option. the us gives consumer discounts a moment offering purchase pull to current this for price of interest

experience So to the a do to availability, yes, boat. with ourselves acquiring giving better with nothing lender and process through consumers of giving do toolkit our better everything a

of And expecting speak sort environment mix then has your in new or what so? boaters changing them to of the you or sort in the of this in market last to to can track purchasers all ability going in just the participants months at And forward? are X and Excellent. you continue

data value be we find can you, I'll that. brands brands. only Brunswick new but overindex our is not with ] Bayline in interestingly, least don't set I updated I [ brands Actually, at new like the towards that, tell reason attracting premium recognition. that boaters, I would of our part even in And go for you, of on brand though, kind And an the honest reason boaters. have think --

new kind in X the boater, If an want you obvious it's to known of we're you're whatever U.S. a brands you top best potential of list a in own of the very boats category boat. boat of choice buy with X and the

So is with to brands. new gravitate mean marketplace I boat our the that always and going are less products think to to brand new value strength,

have such a a that gateway for Freedom. good and returning maybe been Freedom in boaters And boaters, addition more boaters, for Jaime. new or out is new decade

really is Freedom time steady economy. turbulent bit membership at that we so in to the despite and of what continue a And obviously overall market see a the

those of all So things ways to really to led find continuing boaters to itself bring new in.

Altobello James. question Joe next is from Raymond Our with

all Is EPS you call that first thinking? Ryan. the $X still year, you you, I a floor. Obviously, hesitant for your past felt lower $X uncertainty. that question understandably, for to But is given said next reasonable were the guess recession in like you

and we yes, still Joe, much those behind very $X cases. stand $X

in I in. of ourselves is XX%. that really think we background obviously, situation into market how those almost a nice kind perform seeing XX%, a down The what market we're give

So then P&A of think would I changes some back $X there'll capital and the lights propulsion don't work whole steady there growth, the of as lot through be on I of Navico a dynamics. a improved, and good strategy market and to kind they yes, our be kind thinking say engine to steady to boat case. strong continued

All of those comfortable those with plans. would be still. embedded were very things think I those And we into

and demand impacting next Is Okay. thinking information orders. dealers of about think maybe Is for Miami? you to the terms get when Helpful. how start they're do and it in year, And Palm Beach? they'll it ordering

important dealers days, of Lauderdale range, depends few of premium going towards market, what is Minneapolis, Obviously, mainly [ is end kind the about. aluminum and the shows on not next But in brand -- market. talking European right Fort Joe, the It the for so dimini all which a early Dusseldorf Toronto, is a It's beyond. market, now on market, for end fiberglass fiberglass be January saltwater, a which year, also you're Chicago, focus. for of ] at much would the like January brands premium the

is in we then course, the show. Miami, mid big February, have which next And of

this pretty things. a of all season It's So can, those kind through going shows early and season fun. it's General shows really Paris we're progressive. year, And steady stream late of

Okay.

know. pretty should when early in So it calendar 'XX we be

Yes, brand. Lauderdale depending think good for will a mean, on for I I premium. point the be

was us. year, on the you We'll show obviously, encouraging of rest the are in December, into unfolds. then into early going of as really get see for January, lot And get day a you not quite the first the how much but So of balance shows. aluminum

what see that of premium the fiberglass, feeling particularly will So we'll in time. February, indication good point [indiscernible]. that a buyers early then late on be And more January to are at

ROTH is MKM. question next Stember Scott with from Our

side, On what is can and Boat? Accessories talk maybe out RV retail the POS you that like parse and parts about looking versus

seeing of Side, Yes, have on I'd I say Scott, various the we're that. and and the limited marine end side, the on dealers traditional matching, from of folks still at obviously in we're take water. the year kind can kind the southern need We inventory wholesale the retails. winterize they Marine of the retail POS on information hemester, to take seeing to product keep

XX% the only So is again, that of a U.S. products was in and price. bit quarter

we retailers, the end end places more ahead kind the the for of filling channels where lot in a that of Navico and of the is of that that demand season is is in of Group. an strong in of So and season primarily see those really there kind nice

as retail it to enter the to key, really see we time there, that Navico. performance getting point and strong a Obviously, continue ahead hands, the a They're good I for and that and come seeing sale believe new drive is the of would big release, performance. the anticipate but inventory pretty said holiday in strong in the is season retailer the we holiday, preparing there. right we and dealer rightsized on we holiday, Navico of inventories We products pretty the products with. mean, are new their certainly so we're out

question. last Just

mentioned and hearing space, debt-to-income that afford lenders your [ recreation looking of with seeing the there they're lenders that vehicles Are like all? in more did you week tightening from on at tightening at things that earlier a ] least at is the in markets slight ratios. competitors heavily this your or One they're leisure going seeing

financing, We're Credit retail talking flows and about yes. right?

think are higher. I the spreads

of to score. kind getting FICO So pretty I reprise X% think the good

wouldn't say in I probably are seeing yes, I detail particularly true. of I We noticeable moment. some more So spreads. the that. that's probably get think on at it's increase a But think the we're bit can

up And we an spectrum, including whole just see the influx down continuing bringing are premium. people and of to cash

one is to we continue So that see. that

Our next Securities. question is from Mike Swartz with Truist

any very question around versus same of have like maybe maybe you the time there on books those show know year up in following 'XX. sense what range us season. any Joe's we're order the year? XXXX, just I commitments -- or early for early Maybe looked model give can there's is at last But

They're strong.

year at with all solid very I of at this across this our if appropriate banks year. And very our have or last not for similar We at point least expectations time. to across what's order in line most year, would say, least brands in brands last of

probably of here. we go looking a And on at So fulfillment. Trimester through we know percentage basis you go

point we very aligned and numbers, of now, also our have the orders but don't full think are right trimester looking we're the I the kind have I dealers. of orders, pretty would but from So well solid latest first year. of now that at But say I all

Fundao -- for a agreement still just fairly the maybe cost [ Okay. labor any be even question are up guess we mean any I or flatten how ], -- And new XXXX. think could then going inflationary? 'XX? I should benefits with in we you Or the about broader environment? cost to seeing go curve as into it be seeing Is the out the

to of to discounts pricing. Supply turning have line that to terms would willing I in favorable is offer lower with I for us the offer in environment overall, more come supplier us, is prices historical to obviously will much willing Yes. say commodities norms. think more take

will think I very cost our be novel. labor increases

for of year. ordinary next kind out of the So nothing

be say going the to putting So suppliers. us, in right area actively base and I working constructive would cost best is for that say, of sure environment we're overall, making resources cost, with would we're I the now, the evaluating alternative very supply to get lot a

I yes, for that that So year. we area. would expect to be work the constructive in And will overall very for actively

and programs takeout but just year, plans for well. OpEx down the to cost the at level, has division bring every And cogs as not target Yes. ways

equally on what margin as important gross the looking programs So cost do a back to strings takeout to be economic tough OpEx. pull question just time, in the can earlier you at raw at line at

Our next with question JPMorgan. Boss is from Matthew

just on landscape? then interest are to pull seen you dealer Or higher relative or what rate so higher the customers in needed? the X promotional months levers just could if in changes with to maybe convert, so today any And sentiment to level, specifically Dave, Great. entice evolved you far consumer what exactly there you -- backdrop, elaborate the you've how would or the maybe Or forecast. just could and ago?

really. think it's I I really the sentiment in don't think change a --

product that just doing the possibly think in stuff, they of part can, height are it's I of spending getting their in bunch the as months of the we're out ago, the time Obviously, season. selling season a the on now. we're other selling focusing right whole X as door. People much

stocking season. mainly of office consideration Now they're pivoting what to much is the to levels

So I sentiment think a don't changed has lot. really

I going the think in normal through they're way seasonal that the focusing. changes now just

we have feels sure that very been tell with about to dealers good everybody our into our make field inventory we can you stocking careful that XXXX. levels think I from going well align that levels

I they're So would say encouraged that. by

huge the OEM that later a the I'll premium -- change feedback sentiment. to part getting is feedback. be broadly, this is Obviously, to and so there think add afternoon. direct I I'm positive. is of the get I'm some -- But to Fort that customers show that resilient going think a I most don't Also in marketplace. Lauderdale seem pretty show

think So change. just marked a is don't I I there that --

a just somewhat on broadly, some interest of But scenarios the there's some rate stabilizing basis, next an price things is for generally year. think about Broadly, more basis downside on talking earlier I environment caution. stable. questions we're more the general are

next OEMs notable about caution is wouldn't I end But there's year. say might I think sentiment from some that happen what either there or change in a consumer.

Sorry part question. you what part that the that of Can the of repeat was second question?

to are the convert? just that the higher levers a would customer in environment landscape? rate changes given entice there Or pull Any interest promotional you to

you'll the of than To would through honest, selling less season top of the promotions XXXX of kind much kind XX%. be less end Well, year, the levels, of I from line, Yes. say. the of back the see kind moment, up than the be we'll through now XX% at of were at end

So -- of and haven't such the the where diminishing, in southern promotions influence had promotional are those mostly fiberglass environment. where a is markets markets we except premium

we at in get units this kind just the effective would can, but might be and that So northern year markets. not promotion not super I of we say super meaningful working of to the last the few time is the

next with Capital Our BMO question is from Markets. Tristan Thomas-Martin

Lauderdale could of fall potential mentioned look upgrade fleet of of And couple a cycle quick One, Fort FreeMoClub other you the ones. the were shows. of all season kind like? times. there? state what Two of then kind How what's refresh then some the ], [ a boat And with

Yes, good question.

premium really, Miami lot shows Lauderdale So been really Fork show, show more cap. we've end of quite in a had start European showing the while season U.S. U.S. of a than strong really Lauderdale, of on the recently. a at of season We kind and the is focusing

We're some sold everything over past been get Europe U.S. Rays because wheelers Boston received. able in the well extremely large Sea large are brands and in has X the Our change years, to to a for

in The they sold and share through us. the So of was the pretty we represents significant exact numbers, it product was were I bigger market Europe all well over those XX% really think much very was show. files XXs high opportunity shows those to encouraging ban and And I every to received, a well. get can't -- to Mercury's but remember very for

out of day we show. And for that then season hoping that but to we continue all us, of the balance prevailing through factors best all X the constructive just latest we're of see So fall European obviously, behind have for the the shows. a the

some back Thank to session. you. call our to I over conclude question-and-answer the would will for concluding Dave remarks. turn like This

joining great and you Thank much the very questions. Okay. for for all us

we solid the despite you challenges, As saw again quarter. delivered very a

solid earnings with that making are pipelines of and of inventory year, -- right imperative we the on of those the cash flow end sure head our as in continuing deliver XXXX. focus rest the is to balancing place the For free year into

Flight, think electrification, higher with XX% about EPS remarkable and really all priorities. like able our I growth to our deliver to that positive still us. ever XXXX, XX% pretty for be within second do but of this didn't is best forward XXXX strategic the Avatar fact opportunities those continue all than talk but still much of year we're We moving

uncertainty it with water. to around Waterdale is again, nice to on of when share and of see just through XX% close there's XX% a the comes And Mercury again lot

forward, So that encouraged by that is very and continues trend we're an it. incredible just

Thank you much for us. all very All right. joining

Thank conclude will conference. you. This today's

this time, at you your and You may disconnect lines thank your participation. for