Financial performance from Brunswick’s largest retailer may have contributed to the sell-of

Modest first-quarter results from Brunswick Corporation (BC) led to a sell off that dropped the stock price some 10.98% yesterday and have some analysts looking at what could be the start of an economic downturn in the US.

Motley Fool reports that despite adjusted first-quarter earnings of 99-cents per share – a penny better than previous estimates, BC’s US$1.05 billion fell short of the US$1.28 billion consensus estimate.

The multimedia financial services company points out that while “shares have been hitting rough waters of late, down more than 15% in 2018 on growing concerns about the economy. But they made most of that back in the first four months of 2019, before Thursday’s drop.”

After Thursday’s close, BC was trading at less than 1 times sales, “well below the 1 to 1.4 multiple it has reached over most of the last five years.” The analysis went to suggest BC’s own “somewhat cautious” full-year prediction of adjusted earnings of US$4.80 to US$5.05 per share. The midpoint of that range falls below the US$4.96 analysts are expecting.

Motley Fool went on to suggest that financial performance from Brunswick’s largest retailer may have contributed to the sell-off.

“A weak forecast from boat retailer MarineMax likely also weighed on Brunswick investors. The country’s largest recreational boat retailer cut full-year earnings guidance to a range of US$1.75 to US$1.85 per share, from US$1.85 to US$1.95, and said softer-than-expected unit sales are weighing on profitability.”