Brunswick (BC) 25 Apr 242024 Q1 Earnings call transcript

Good morning, and welcome to Brunswick Corporation's First Quarter 2024 Earnings Conference Call. Today's meeting will be recorded.

I would now like to introduce Neha Clark, Senior Vice President Enterprise Finance Brunswick Corporation. Thank you, and you may now begin.

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

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

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

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

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

good in everyone. to uncertainty. of earnings per a solid and delivering margin despite Neha, expectations, the caution with had morning, continued and start sales Brunswick customer face share adjusted year, the economic Thanks, the consistent

continued the offset by benefited and on measures businesses, our performance well-received wealth across comprehensive promotions cost share and products lines. and launched from some higher discounts new Our recently control of market product gains

to on initiatives. our good also make strategic We continue progress

basis first year. to outboard Mercury production U.S. per $X.X share of reduced up and with first net wholesale patterns, share Marine quarter adjusted market dealer and anticipated product prior capture marine the in OEM with Our when first share, which of retail restrained, quarter auto to with were billion the our and and pipelines retail versus sales our compared consistent businesses being of $X.XX drove range earnings line XXX guidance continued rates XXXX early were filled. season, across points quarter

outlook performance is boat season of unit our early Our XXXX. to flat with tracking retail

season, to hand weeks first historical we current U.S., maintain in As levels continue which we is closely XXXX with field channel our with XX.X to on in model quarter the and closed we work the balanced with partners line retail selling inventory into core move -- the norms.

successfully issuance segment refinance of balance our some completed cover and addition, cash now the highlights In the turn a we I'll position $XXX million quarter. to for sheet. solidifying to of quarter, debt debt, our only further near-term during the

delivered model earnings patterns versus a pipelines both year business manufacturers and sales XXXX the quarter dealers managed order lower and Propulsion products of Our production annual first and and current of record ahead year moderated and changeover. model of as

continued consumer cautious remain changeover gaining points XXX and to market share model through above. to outperform in assess outboard they U.S. monitor as OEMs expect environment. basis of macro We sentiment XXX-horsepower year the Mercury the the and engines market

engine prior and patterns steady season in Northern business parts performance continued normalized and Early have year. from to earnings its been voting participation with the quarter over first strong boating the with quarter. down U.S. of growth dealer levels network, accessories contribute continued the the remainder inventory increasing modestly but And for sequentially Our of XXXX of supportive across the sales weather anticipated, should as the

versus very earnings remainder focus important new the ultra-wide of several the launches display, quarter for in investments Simrad and including consistent multifunction delivered the which by the been on launched products new the sales recently Navigo and As sequential first customers preparing year. growth quarter. NSX has received had and is product well in to versus continues Group XXXX, Navico prior sales Group of expected, lower but earnings

Ray season continuing Boston plan Finally, our at gains. exceptional and share boat business support market new while Sea shows performs Whaler to with introduce boat performance early models retail a by to

inflation above the prior margins planned steady production to consistent improved and expanded stronger in the membership club remains recent to than prior while of Freedom worldwide anticipated, in following consumer loan Boat Shifting levels, year, this rate likely now now. to were below Freedom deliver the cadence employment pace high. external same factors and GDP year. consequently, Sales mid-single-digit which sales has Club turn sales and earnings is and rates XXX sequentially. U.S. lower percent reduction, operating were Fed in with continues locations. quarter of

the to of proposed regulation and increase East the high Brunswick are, Coast Finance We enrolled. NOAA proportion than vessel Brunswick for industry prior of buyers higher And a marine seeing however, purchases interest Retail bulk continuing XX% scores, recent advocate technology-based periods. dealers to continues more than program with financing net with credit in having lobby launched The is in speed against recently solutions.

of exact content unknown, proposed remain difficult. rule However, the of the analysis the impacts making an

noted, is carefully appropriate pacing sentiment current wholesale value they inventory sequentially dealer are but product for particularly with lines. levels, generally orders. As mobile improving,

is We spending discounts unit are plan to in a deploy portfolio with retail per wholesale promotions. program is of and higher. with a and spending dealers working targeted basis, prepandemic floor levels, On support but line

our digital drive with more Boat across first Group's in Our digitally to of brands continue X/X investments platforms benefits sales the in assisted than quarter.

P&A buyers Our of and show participation lead levels, demand. strong surveys steady strong boating results generation boat richer a product mix. sales prior basis above were with a to levels continue encouraging Overall on and supportive year show unit with interested

Whaler shows performance market Ray Boston boat new retail at gains. and supporting with share early businesses Sea Our models exceptional demonstrated

shows, boat Miami the a in share saw Mercury Dusseldorf, basis, decline major quarter. Overall, highest key excluding at other currency acquisitions. on of all now performed and well recording outboard revenue XX% sales global a we to constant at events. a view the Marine Shifting

market first premium brands. declined sales in data Moving strength now quarter boat outperformed versus the performance. in our U.S. retail with internal to new XXXX. U.S. particular overall retail industry the Brunswick quarter of unit the

the to year, expectation is point differences of Our data full unit prior retail to internal the versus SSI not continues remains quarter. overall a an year. XXX in solid of It year with the currently declined sales reporting flat retail internal the unchanged. in for see first are U.S. X% quarter and industry market start Mercury in prior the global uncommon the engine retail market year-to-date to basis including flat at in a gain points weeks outboard season, and second quarter. first of in the share outperform our units this

pipeline season. successfully and with the case. by U.S. in unusual of both we the of which ahead of and given is at versus nearly historical to norms, units channel limited the partners. pipeline expectations a the in XXXX. with our being XX.X pipelines, commonly slightly bulk declined of continue weeks, with We units building normally was end manage inventory quarter which ended the in pipelines first line quarter pipelines and higher, XX,XXX International caution quarter the quarter period is first XXXX, boat XX,XXX is our versus fourth Notably, U.S. underlining the selling the

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

spending quarter, of XXXX. expectations moderate of better Dave, were versus first as Thanks, Adjusted free a were than operating despite macroeconomic cautious a several have with remained the to adjusted EPS the resilient. XXXX, first down in everyone. $X.XX. performed quarter strong guided an million Gross XX%, margins and solid continued environment. net good projects a consistent major Brunswick CapEx quarter resulting delivered conclusion anticipated expenses QX morning, in versus flow and down in capital continues cash sales given XXXX, $XX

in and more benefits impact sales result measured net the First unfavorable changes year by business increases, measures gains price OEMs, the products. quarter only wholesale as exchange year impact offset new well-received share sales of than foreign significant higher dealers discounts earnings were throughout lower segments costs, slightly with from were a patterns operating which Adjusted cost market of enterprise. partially down rates benefits of and versus and by input annual prior in the control coupled higher some continued below ordering as prior offset was from

Now dealers year reporting segment, business. we'll with each pipelines Sales lower current boat and order model moderated change. products production manufacturers managing of take anticipated retail a were model and our patterns look starting year and ahead of propulsion and as as the season earnings at

cost However, inventory the engine to capitalized lapping control production. reduced as prior XXXX in variances continued share, earlier, of and pricing with related of together offset absorption foreign aggressive partially rates, measures, to year the favorable lower outboard unfavorable impacts impact changes sales, exchange the from Dave gain gains of currency timing discussed lower Mercury and of and

its a Brownsburg, decreased The slightly, essentially to sales and performance of ability but continued as XXXX the and pricing of operating control. customers more increasing primarily into complete, the our and offset quarter accessories distribution Note our transition improve. to first products facility trends and our sales the impact engine Indiana very margins prior service continue high-margin business sales with anticipated, earnings in over due international P&A which in steady were from the earnings distribution timely declines, parts while the year-over-year fashion. down that Sales down sequentially Segment modestly cost is increasing the quarter. business to

result partially of as in impact model sales lower driven Segment by down product The remain OEMs of year were their U.S. and which during operating normalized the was sales operating sales improved as channels discount and the cautious quarter control slightly strong expenses. dealers their new the only offset levels, activity orders Navico earnings current decrease growth into offset marine of off-season. sales pipeline RV reported to in momentum decreased products lower product remain sales inventory from international moderate by first increased which they regions, the trends. to was in on Group a while reduced XX%, sales partially by

order healthy favorable softer business gains. the were delivered with enter XXXX expectations ensure and partners to in QX as of carryover changeover, XX% Boat channel ahead pipeline our retail offset to our as while selling of partially orders consistent quarter continuing by inventory year to share levels the season. earnings Finally, Sales cautiously pricing we the versus the model down prime wholesale sales and due impact continue

lower Boat were to brands premium retail. is solid lower the continue membership operating and absorption down the business partially seeing very offset of due wholesale quarter, focused reduction both acceleration, had activities. steady primarily production Freedom contributing while at Club, revenue Boat to Adjusted the included uncertainty. sales despite during in quarter, X% the and levels by earnings Our approximately reduced another perform which cost macroeconomic from well the segment's

economic between EPS driving to on and balance sales forward Despite remain cash pipelines. production difficult we product and second moving more focused the third growth conditions, wholesale and managed initiatives with to the continuing first the and XXXX, ordering sales is of resilient across season in our match of allowed performance continued rate boat and uncertainty patterns making partners, our flat resulting year-to-date being cautious internal and retail channel acceleration to by the Despite wholesale quarter balance performance to the our the support businesses Strong plans while challenging quarters and peak our to new flow timing our predict. expectations. retail

materially selling As a for not season. enter see wrap we regarding up anticipated the Please metrics. will financial cash and strategy appendix updated result, we by the are capital guidance main year. guidance changing update the sharing P&L, assumptions I certain segment full additional as the flow other for

a by anticipate First, of X% we February full increased in now year dividend and our dividend $X.XX.

than million to negative earnings continued is trending FX given now Next, and dollar, in to U.S. we negative impact our strength due the rates. initial $XX anticipate the FX up expectations more a

hope We rate slightly portion tax XX%. with of lower of this a offset a to effective impact approximately

in our the remains anticipate $XXX repurchases we $XX see from dislocation our as approximately initial stock Lastly, cash our generation share year, to million spending and throughout up price, on near-term estimate. million we strong, continue

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

businesses the future Ryan. important brands quarter. XX contributor extraordinary representing to Thanks, launched our products and new and an across growth. We near-term an during

to to some FliteBoard At the the like introduced models in additions attainable flight subset. portfolio of Now a set a Flite I'd broader Miami to we boarding Flite just product to the participation the exciting there Air Pro and significantly enables people are Boat and highlight enjoy brand International allowing line. to more the AIR consumers, The most Show, expanding experience.

at line. VA VXX joystick also launched set are steering engines boat many first new and models Boston most vessels award-winning to Conquest the XX in single-engine brands. for Mercury Mercury compatible applications. family Its Mercury of expanded debuted the and launched Joystick Whaler fifth and with models board high the horsepower. model and date. boat the single-engine mercury XXX XXX VXX control is technology outboard and broader the electric Avator XXX, a XXX expanding product which our very to Harris about horsepower the of from Verado shows also introduced powerful to feature advanced XXX fourth outboard its engine and with boat new including Simrad excited electronics. across outboard We're quarter both

first positive launched which are showcases a the Android NSX is and industry's operating to wise, latest seamless the the multifunction recently SIMRAD Ultra of We display functionality, response interface high-definition seeing system. very full the Simrad

offering launched Lowrance we clarity sonar. brand's the fishfinder/chartplotter is Eagle, and which addition, high-definition new in and level In features depth performance lineup the the entry improved latest through

continue Bulk expand we the Boatela-certified Southwest Tampa boat Club's Capable largest in location our with the the newest finally, to territories tacos certified near Freedom located region. opening of which in strategically location accelerate preowned Florida. newest the And sales business facility to pre-owned is will service We Florida across Southwest corporate

I'm the first recognized accomplishments were record in with a enterprise that exceptional teams number of the quarter. Before to from highlight conclude, across awards we thrilled of high our the

a We'll motors. the consecutive year. XX be many Show of the [ And again of Thank XX also most companies named we second Miami and consecutive Brunswick total to now the with marketing to end the America's AboarXXE including was recognized, Award awards Brunswick awards our remarks. for the to for Mercury innovation shows season the make America who Boat Forbes list including customer also line That's record List Best continues prepared year. Electronics for trustworthy open recognition talented sixth you electric Brunswick service Large all in products, this the at to Consumer Newsweek's Show. possible. questions. and and named outboard ] employees our innovation, our Employers Innovation early for XXXX the boat at received

question-and-answer a conducting session. be now We'll

Instructions] [Operator

question from first is of the line with James Citi. Hardiman our And

to wanted the retail trying little tease dig favorite I the what on commentary versus out in to you think bit data a right. topic, industry is

the internal -- that for Brunswick So how data more going you guys the is industry of commentary think for you just flat. to That's are so the suggests a is year-to-date. your the internal industry flat think I'm don't clear, boat be But year. you

understand sure Just I that. wanted to make

they as broadly, And retail this aware, so guess biggest today. I particular, your straight just second to surprised then be seem customer time for the momentum you're put guidance more year. I'm by in sure far the And

So connect those just X to trying dots.

seem to seem retail much weakness. going as to very They the planned. be that You think is guys by surprised

So help understand. us

Yes, of guess. Yes. Thanks, I James. a couple things,

correct. You're

Our April. often data, internal year, you the flat in SSI the at of And you're internal dislocation including the saw is right. our this between There's weeks main retail industry of sure which year, about essentially XX% in of is versus down for a first couple I'm time in particular, powerboat segment retail.

and industry SSI suggests down about down XX% X%. that is Brunswick

would by So like the X% we dislocated be something for Brunswick.

I -- think relatively be about But in SSI the year, first XX%, in And from first is spread. think very compensated quarter I last the I quarter, month first about of extremely small the total are then a the a QX. the registrations, they couple would things the a think, I next which leak because quarter. quarter, the wider in of numbers. but would for phenomena talking in where think the we're leakage with following you there's because particular, leakage the by the prior is of would of think QX sales XXXX months into somewhat quarter, low the low from particular

So prior end QX into I to in the leakage of the more and versus year. be the less tends QX into think out that

phenomenon. the of part least at probably that's think I So

to internal We they we what close But think that Of know -- gap -- And for but as expect, that's we fully we XX will I account to the share, course, retail the is go will total we the forward. we as points. can't think unlikely SSI some delta. basis usual, is what the which industry independently, say exactly gaining about doing. are

just your a least of disconnect. you in of the the a the thoughts of year? a than lot of And Got lot disconnect. months retailers I of add terms And retailer, it. point then on like feels at biggest would guys what sort X, Any X.X first tone a negative the on bit on more

Whaler both lines, our But product, I our that say can't expect would course, we agree a sales to don't product Harris for of it, big I premium of brand, Sea Obviously, and but some Sea extent, Ray know Whaler we'd speak but they're and been of that sales our Whaler. strong. them. pontoon about what they Ray Sea agree, would well said part Yes. of mainly Ray I which, I probably have

Miami, it. are a So I and and published. we would if that those Sea reflected what I -- Ray weakness for parts off that there might exactly in just had and know you account is a good at Whaler sales very it's parts, in other for tell QX don't I as how example, clear

it. in just one And sneak if Got more. I could

critical. Next be for particular, analysts may you become What critical. P&A don't like of month, the context the in the in this the maybe walk you X or of year I want us looking see see you given weeks hit are us sort like at to going your through to of business, most weatherman to are feel what as to need time seems And numbers. weather But closely it's ability guys, year. full

other driven some at extent, example, by Mercury mean, customers. one there's production looking the things, major that's for I for we'll don't which order anticipated. for including which and weather will it's and rates retailers there, OEM Navico rates from Group, and mainly be looking factors some at looking we're rates be We'll our think order Navico. extreme be is internally that will I at situation at but be, of To P&A

think model But current as versus as think model model really, pretty year, I which product you is current industry in the I we now, go approach and trying next healthy model pretty decent. year prior changeover, XX% is model a into of with think But we first product is XX-year see product year right the year, the about the a is of obviously, June, into would about inventories the relatively where we -- proportion during an they'll products. modular we When have will to be live expect obviously. minimize period the for to cross this year to and current additional acceleration overall they because hope

moment. product see year penalty clear be environment, prior discounts and less higher of environment into we are is product June it would than to very Obviously, the a they in promotional tri-mode promotional a go beyond. your carrying model at In adding as because once they the

this of point past to just environment is when trying be maybe So people current for year back years the accelerating inflection exactly looking primarily. we to be we penalizes to be. at because than the bit refer in looking new. few to But issue -- it would be little understand going to really this would primarily a -- promotional year more versus OEM order abrupt the from question, with of expect a holding customers your rates model we'll We we'll

next color. luck good and good weeks really and That's Thanks, months. for few the

of Next with Scott West question line from Stember is the

change any the seen And in? seen the at tightening customers have any you you creditworthiness whether side coming side, Have of on credit on a credit it's the retail perspective.

say. recent have back into scores coming high more people we saw would in with We bit market financing periods, a with than credit I seen the

have We're for been the in last in moment. think of Credit any are score months, I would prior So I say, the financing rates relatively credit tightening. say, tightening probably scores people coming a particular little good credit requirements. bit stable would back periods. were there's I more a say, don't and X and terms in they than would I at and yes, with period,

-- sell-in about pulled parts then you the through over talk retail bit. like little is It actual both? what's you're looks a X%. picking could maybe on it up like was Got down back seeing RV But what side it. the And to for demand looks side, being

Yes.

but think flat with a retail bit pretty to was going the demand I the down be it's solid by -- business as is still little products probably. X%, is our

product retail is I business think really reflection all a is people bit P&A is channels, which the know our we're seeing distribution the available. what what of we're seeing of on a in of

And as much so build inventory not to they're the inclined moment. at

their Obviously, own watching sheets. they're balance

I I the think willingness effect probably the So there's seeing moment. to than that. that to just at think ready we're don't more stock on of it people's availability anything

XXX% have all customers I point thing No. customers quicker. at able capacity. product are periods. Indiana of behind also startup and our up efficiency service facility And The of only us we It's and is that the is out better. to us is international little Brownsburg, our our certainly, But get running, would allowing a put kind bit running almost to

levels the normal. seem quite in be Inventory channel to

And end next be so of periods would time we of the anticipate slower P&A bit we're the year that to little quarters given should lapping for last growth a X quarters.

perspective last you, slows models David, quick Obviously, but question. things talked XX pricing lot pipeline, timing one kind a in timing -- from looking model just of maybe about little guess, when and your the a Can And down are it. a maybe a changeovers. maybe year it perspective? at you of you about, have Got from here? talk you competitors I have bit. the it you What not

at into can't based introduce of prior moment. commerce of the depending think year what it -- the to it's of like, kind I before -- legally, model But the changeover of June. the period, the model between penalty of on maybe first is. first the But be the you if I given model regulations and June somewhere end can't year or environment we year July, into mean, product discounts on prevailing the for additional often,

most expect [ And on that. will the part certainly, our the introducing first in of products We'd of ] Neumolia be of mainly earlier side we customers. June.

weeks [ X ] changeover. to just it's moly where period a mainly in running now we're So the

cautious we're seeing. expect what in that's building this be inventory would to we and people period, about So exactly

I of other the I'm Sorry, what it. sorry. your part missed Scott, question, was

And pricing. thoughts general Yes. just on on

across the pricing expect will our industry Yes, Pricing. we'd have. very modest that be and this year,

with The of the next line Alexander question Megan Stanley. from Morgan is

prepared of asked. targeted some been floor in higher quick more questions about you think doing the the at some on In I point. follow-up on I remarks, discounts the promotions, this that mainly Maybe talked support think and slides just mostly have a plan

So X-part the change is guess, just at P&L you the this I being guide question. somewhere it? around given didn't else point, really absorbed this in

retailers is And the then can't the the order given are more why really start maybe second at when guess, not I point you to time, of aggressive inflection or be you with question supporting retail at through question models? of it prior to of terms a Or competition at earlier, dealers in and the more promotions these pushing Scott's year is this point?

Yes.

So really, I to plan. discounting we're would we say prior But in increased versus -- as definitely primarily targeting, say about pretty as is talking year model The when But are prior certainly of discounting, support are terms ] in versus rates collaboration we parts year we much with primarily lines and opposed planned. segments target. yes, the of partners. kind that are targeting other we our product [ retail around do really moving model discount

more it's particularly fiberglass a support. requiring lot at discounting product and of product expensive, require support, some versus and moment. It's and value-orientated lines of product parts X, that product the line some not not value guess, aluminum support promotional lines kind the even the but the require pontoon are premium some high more of of of more not I lines Our of

segments and require about really which lines product So support. it's

a changed The other models be our is cognizant significantly obviously significantly years, mole. that will now less some some changed thing of more we're

are obviously, product. move the to add year support changed, significantly we prior more out promotional So that model the would ones being

talking are about. more kind the targeting those that So of things we're

I not think promotion to plan year. than just broadly, is prior different discounting higher

and the with to there Was around that. how context can good the Fed see offset share you'll with on to full tax maybe Understood. follow-up. able just it's year. what's early give understanding But repo. see and think quick going you one higher Or the any That's incremental helpful. the the nice And it year you that FX and -- some us be rate thought given thought uncertainty to headwind, just maybe about guide? to you lowering in

not No, really.

some I at think the gave the we guide of ourselves the space in beginning year.

amount don't is a was of the moment. we is think think would it I we to the that but considered have $X under we If thought decent obviously, $X threat, pretty it, space. at

were are very and certainly, Yes, I'm cover that headwind. there even pleased ups able QX in we the to downs, and FX some that

repurchases. half it's on obviously, be particularly share first with We're obviously of to biasing market the given to think I the the year the that. today, good in market more it's

consideration guide no, the changing of no moment. So at

Our next with question Craig Kennison from is the line of Baird.

ask just question. first Should my

mentioned, think, maybe Dave, you which But mentioned lot just possible gotten I'll supply you analyst So the speed limit Atlantic Among community. regulatory-based solution might lately. solution. more has proposal, pivot. a attention the also to I a technology-based that

of the pipeline offer? do Just And wondering, that you of part that solution? could the think listen I'm to do have innovation sort and in pitch -- be you regulators might if have you

active existing way future a proposed very -- near and overreach and huge we've We rule approaching is promoting I potential of been this. technological in Yes. really ineffective think solutions. completely

it is think but placebo, what a I basically is. it that it's

deaths the contributing lot and So negligible and any numbers. of I think evidence the -- first all, whale to tons, above XX feet significant of of a

the one a We trace years, last with of whale so could XX in ID. an

complete So overreach. is a really this it's

project. lot wanted to in address combine published. being for really do tracking the some it drafts say you try of to to have rule a If then infrastructure, it's AIS of is. with gets proposed. And would There it the are Concerning know more but don't vision for and the this, don't to we currently sonar systems it's I difficult know effective were, or what much boats impacts than we ways of a we systems. -- published, what rule, for and somewhat We way example, exactly until kind if see are the it gets this

a of then of with analysts I you a based boats life XX one analysis gives replacement the affected market XX,XXX of and X,XXX boats years, which think did our on with share.

And November But in bill a limits is mainly in are through that part say basically that that we couple to proposed wouldn't assumption of has would which consider market. here. with of that somebody from saw April, One boat. is for would be off-season a replace rule effective the it XX-foot the the boat factors the -- the the there XX-foot a off-season

this So project overreach it But the I implementation. concerned of think it's the it's really specifics the -- difficult it out. really about necessarily to might we're a precedent how huge It's kind to of plays just set of as because opposed this particular

Our next Truist of Mike from question line is Swartz with the Securities.

with of were have the you it, hand what year end year? by First guidance, to the say the then either pipelines are assuming the global but end pains you at a did I or on missed full calendar of weeks the as are quarter? pipelines or just hand weeks may question, And there on

on here range. in account XX-ish, We the the about X. Yes, how

Down weeks, of a of the year. end couple

by the the XX% end So year. of

that's and at end expect -- -- of maybe the that is I our It's year. planning we what -- are Yes, right moment. now, right. say, more XX% that more production our we XX is correctly about by the around, the would

through things you maybe year can addressing I you 'XX things do you question. lot at And people a with just what then things line? what are there's second We of mean But content. from But guess around feedback get industry. to address the pricing, you maybe model in high can doing a a assume would around affordability? product level, you. this do I are affordability, Got on I your

versus is base when so thinking you're terms a couple I in line. else, might product We -- content broadest I we affordable, about things. content. we adjust mean, making can the of there's the influence I think we possible everybody of base certainly. think boat pretty offer -- a lots much One Yes, might

that seller said, for to ways more is. market we there at -- are as as enter it itself than $X,XXX of so both, $X us lots boats with million have the and We

after lower. again certainly that want But on so are sure can consider enough a to X going something. it latter about considerations we it, years you know the certainly then just people they're are you that of that typically and I the This consumers that We to be controlled and car. of certainly is it base some is content aware when on to resale Do boats the other want there are don't think offer doesn't decontent. resale similar value have to wasn't some resale that to content And -- maybe you there sell things wrong broader that are smart buying piece we very make key available. very

us, So really, adjusting does I some yes, lot be base heavy the line we have before. wasn't think. in there latter certainly, cases, a maybe line. lifting content wrong broad a on product add the But to some for of the that product We'll

question the Our Matthew JPMorgan. Boss of from next with is line

about wholesale -- Could Dave, think to relative just to wholesale that's you to just sequential cited half follow caution the improvement best the how that up And you have today wholesale. So elaborate back the the to in orders? just second the quarter that behind year? the on visibility drivers today maybe on the expected you and relative OEM throughout

wanting year not in most for typically move retailers earlier, or some inventory June. prior I kind they mentioned Yes. to to Well, are -- modia have then really think because the do as really model people sales more to for be to promotions current to which apply changeover, of product. discounting the hold before support have additional I drivers, they

So the year. year floor, as on they're and of the as XX to year with model more a is 'XX going the the dealer June a promotional 'XX showroom somebody dealer model to faced apply in in typically around have model activity and soon is a

it. driving what's that's think I So

there's caution moment also behave. behavior around in versus think is at difference the going experience. there to general consumer the recent I Is just how

-- -- like the bigger visible we into our one larger to Whalers, the moment, dealer particularly product, smaller the QX product, orders our a anyway. boats, have the in of time a long Rays, bigger insight amount like us, -- the of have we [ for it ] huge think and premium harrises, Sea to takes much more those orders are folks for build don't at I we the the

already want it June, obviously, we brands. it orders strong in your know for in those if So that QX, And already QX essentially. ordering are you

visibility depends really is the for I and less it have say. on for product, would more So product we premium value

follow maybe, up. And Great. then Ryan, to

headwind caution absorption you're costs wholesale could in first to offset orders, how Just given speak half you the managing base overall related the expense to the on

quarter first one of And speaks the just Obviously, took a Yes. $XX or same OpEx itself, our of part versus a for units played out unit quarter year. of kind million all last wasn't our right? We business corporate.

So we have company, cost to programs entire both the throughout launch costs. manageable

as So as right? sure that, possible, like we're that also gross strong things like making spending things keeping on travel margins but our

story. X-part a It's

[ we've here that shown as -- margins much margins OPEX over your keep the only the those resoluteness stronger, role You take plays at time. been out gross ] But several of And quarters. we've last can time. you a big a obviously over so

as mindful out new the progress. come So products grow other gross costs out, come margin product will the year as where line margins help with new But well. we be of will continue very and that continue models to model as we obviously, to

that So kind everything in we is all ingrained of do of today.

Fred from with is of Our next the Wightman question line Wolfe Research.

wholesale I'm the and half the with that some out context put guide just the you there. and about half first the the hoping could of in discussions put XQ we back retail

the it on specifically, the bit a below that's Street. So like little earnings looks

the some schedules. about talked You've of build OEM predicting difficulties

we that if today? look number, XQ So at

guess, you are year more bit would the model where given holding 'XX thought Is should are sort little it to Or that about we of start cadence, think I start where people the assuming until of weighting, versus be the sounds How like half off you at that back fact was ago? it just hit? three year? it months the a

Yes.

if at you half touch, and look basically maybe you a keep we QX. the the But you us first year, of If Law. hit think see

was like guidance for is middle think QX the million. $XXX of consensus in $X.XX the our I range Street

the the half, different. in So of $X.XX were fall first

not a of range that a the -- mentioned, potential think a scenarios. is to just really of want in wanted it's there yes, in factors we So always big I put to we -- a range But put achievable. delta that for here. I some

So that's what we were considering, Brian.

Yes, most that impact goodness bigger about FX rate more of has is we that played comment could is the be rate did derived a a of positive. negative than just little earlier from FX role. versus the it's -- tax I have tax And bit mean a obviously

FX can of the our the as and but way rate a has there bit be little in tax first all it of play if been strong XX role, to get as to cover So weeks. continues on it itself a won't the dollar

the reduced of fourth were tough of OEMs back us from the destocking heavily was a when provides we orders here Maybe face that consideration obviously in 'XX, the quarter, half is have one of particularly in with competitor. better the

or signs or churn cancellations. anything of as near sort And freedom, sound maybe fair. ways we you there just retail who is you doesn't a new that environment far on handful far if people -- That's be some think the Freedom, covered of you're just these if we've to of about share were call. deferring unusual potentially offset an of seeing Is any But could this of as it how to stickiness that boat there can shift or sort term? like purchases so delaying

it's nobody could XX% definitely I Churn obviously, is which rate fee. about financing we been people be, benefit is know higher of rate the the are Freedom few been part to of recent have not a cumulative certainly an from impact their It's possible. interest a to very perspective in subject entry continues kind purchase environment offset. as don't the I say, know, I of inflation range, would history. from in about Yes. kind and the also where subject kind still because last having both not the far suppose, as to really

of we that's That's durable it's pleased same very to bit more kind increases purchases. club think see continues the So it's just immune Freedom and -- year-over-year very goods broader were to satisfying. macroeconomic a in we of kind sales. overall stuff impacting to expand,

So yes, certainly pulling business helps working and units. boat through very model additional our is the well.

from Morningstar. Jamie line Next question of is the Katz with

to focus on Freedom Boat want I Club.

think was I was or call whatever same-store sales the the used. statement that metric on

And seen still is what a and after slated there's digits. of been club FCC there's that, mid-single if whether that? up to run it's shift way rate be the growth would to traditionally buyers rest So year. sort from in at then mid-single-digit maybe discern of I'm over that And the members that curious to any the you've

look region, yes, market, with geographies just as expanding you but a other if domestic off don't Thank in very kind we're should from data buy where of new to benefit presence not freedom have I that contemplating we the in regard, that acquisition that Freedom, you buying service can the a other members few and of now brands. see when new Freedom, Australian that may to a see delighted one we European in there's that seems I or was Since data got market that the in very have boat market, heavy contemplating But areas. there's boat. a performance expect also recent now original the and data. back and go so anybody Yes. it were could if to one that us wants boat to do the going things we of particular well. of model I take at is any track I trading the our buying Freedom. members to a Freedom to are those to trend. In a be we don't we were of know. in who's concierge directed robust the But is has that into tell the to Freedom

solid think, to we year. Yes, didn't remember we do Yes, that growth helpful. yet extremely a grow, publish solid publish of expect yes, balance of growth growth that's So the Freedom the for But exactly year. But and it. rate anticipate the I the growth anticipating. make balance rate. we the continues through I we're can't

Okay. on for earlier, look internal interest this but some then I contingent is flattish know on I'm outlook assuming touched market And was the rates. that

your us year? rate for the are So what internal do share to expectations over remainder of with you care movements the

Yes.

is everybody changing just else time. like think the I that

think we insights. don't I have specific So any

multiple. No. market call -- environment. did flattish a rate overall separate think the anticipate And And our is it for just interest from not I

a So X I -- together one-for-one basis. we those on would not tie

promotional rates, the some offering is is buying of -- because of mean, rates. interest as Maybe so that to I dealers activity down our well one thing consider promotional

at So base financing be or there with They their it purchases may financing rate. the a at are are who are people many financing financing not $XXX rate. promotional $XXX

of with line the Xian BNP Paribas. from is question next Siew Our

some There's I questions boat about, sales. been guess, new

I down, looks you the that so was don't let's say, retail, or track into maybe know, expectations X%. I how X% slide, some does gained So about year? per like wanted X% ask down, the which engine versus share, your were like to going and I you

our line initial in of for That's expectations Yes. kind with the quarter.

confident outperform take certainly the greater and and are our categories. in to market We very the share, in XXX-horsepower to continue ability

obviously, don't a channel, function, going that where be Dave Retail, take OEM also production to repower strong, bit is we on as little said schedules earlier, and continues the share. stopping. a see also we which to be So of

slightly the And that more performing as industry -- take schedule more bit again, now. a of subject core So to production the to as we're of anticipated if right continue OEM share consumers even whole kind a sluggish. is our

also And on it. following that up Got maybe propulsion. in Okay.

bit like mentioning I higher of kind Or do again? the sounds you're engines. is think the kind mix that was of horsepower continues or It you restocking that because you of -- kind a a see horsepower year mix of benefit normalization some it more a maybe higher were effect? last as of

that continues changes mix quarter-to-quarter strong. pretty product And on be and right? premium at QX, And mix, and would to quite the there's a gains horsepower market again, continues continue I product buying components was There's in component depending is as Yes. the product and customer to it from neutral. X No, be share then positive who wholesale. consumer it high component. say the component to

is Raymond Altobello with Our the next line Joe question James. of from

question, picture. big maybe first So

months QX return does the start to pricing retail this U.S. mentioned again? important going know do flattish to I year. And summer. marine get need But positive? growth to over And see down adjust is the You more start unit and industry to get spring XX%. to what's

this are lines. the on quite I the be because pricing kind recent of the where think there mean, and transaction prices or think moment, from an MSRP promotion adjust. I Joe, product particularly value obviously, of I pricing need different to might at environment, historical discounting

an is So to sales. of additional see whether is one testing the incremental have things discounting the market do of capability to that used pretty do in now portions drive localized will the increasingly we ability activity A/B that promotional

some we will not it places, some so places, much. So see necessarily

So prices I by are levels. transaction -- the are at don't improved think that moment, the are a big level. broadly certainly prices transaction promotion discounting think they certainly I But the and

can environment, we the In really macro is. terms too. It clarity obviously, helpful. what be will more the more drive would I season in consumer offer, some addition will weather of what always in think, helpful But then in a to obviously, a good the bit be little

it. Got

And just Okay. follow-up a on that.

anticipate model bit for And have little an guys weeks? you a said the shipping competitive product we normal. year few You might XX for channel? advantage in you a when earlier of a see could than sense Any

people most be think model this year. I will relatively early implementing changeover

points. get the I basis share year. a about far boat say, would but -- on gain we're So side. SSI, an just continue up that so side, We don't to on advantage based I lot not. that the this market engine though, do or talk we XX we'll I

differentiated our strong product of think through I designs it and is technology contemporary a to is really lot overall. unique So new flowing investment, lot with a of us really really nice helping

we lines product continue we what have featured most across is that's our bots. will and And to looking best the sure contemporary do make

for our advantage of think that us. probably competitive I So source biggest is

this to for we've At remarks. closing time, end the back our reached Dave floor I'll of hand question-and-answer the you. Thank session.

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

despite saw, and delivered more proceeding less retail As solid in challenges, quarter. or is we a currently our very line you expectations the with

resilience the think I portfolio is on display. our very of much

well. is margins discipline Gross our up cost well. as control really held And on display

we inventory remain did quarter, balanced. and job think we'll do I Field continue extremely a in well to that. levels the really nice

don't of have the we're well excess we really and balance think for set year. we up the inventory, So

strong. to continues debt a timely issuance. obviously, cash really we be free flow did And Our

share repurchases going a that to allows to going to in of increase So year. the with pleased in at year. half that I'm repurchases obviously first the bias we're We're share be that us more the to time market when today, the early

I think very solid a balanced of overall, view ahead. a quarter and So year Thank you. the

conference. you. conclude This Thank today's will

this a participation. your You thank at may day. Have your wonderful lines and you for disconnect time,