Following its third-quarter earnings release last week, Brunswick chairman Mark Schwabero and chief financial officer Bill Metzger elaborated on trends they are seeing within the company and the boating industry.

Schwabero said that boat registrations within its Boat Group were up 9% in the third quarter and 4% year to date. He said year-to-date performance is “slightly below” the industry average. Its outboard boats performed best, though growth in the pontoon boat category trailed industry trends because of production constraints at several Brunswick facilities.

“We’ve improved our production capabilities in the third quarter and feel very comfortable with our ability to satisfy demand moving into the new model year,” said Schwabero.

The Brunswick chair expects its sterndrive and inboard boat sales in the 41ft-65ft category would continue to decline through the fourth quarter and into 2018. In the third quarter, a decline in big-boat sales and impact of hurricanes in Florida and Texas deflated boat group revenues by more than 11% compared to the same period a year ago.

“Consistent with market reactions following previous hurricanes, we expect the replacement activity related to damaged boats to take up to 18 months, potentially resulting in a slight tailwind as we move through 2018,” said Schwabero during the call.

Sales growth of its marine businesses in Europe reflected a “favourable market environment” for the first three quarters of 2017, according to Schwabero. Brunswick’s peperformance exceeded market growth rates. In Canada, wholesale and retail boat sales were up over the previous year.

“Overall, the international marine market demand has been solid in 2017 with positive unit growth and has exceeded our initial expectations,” said Schwabero.

CFO Bill Metzger said that third-quarter sales for its Marine Engine segment were up 7%, with single-digit growth in the US and Europe, specifically in outboard engines and accessories. “Rest of the World sales were up 16% compared to prior year on a constant currency basis, with 12% excluding acquisitions,” said Metzger. “Growth was driven primarily by increases in Asia Pacific and Canada.”

Schwabero said that Brunswick’s 2017 sales growth for its Marine Engine segment remains on track at 6% to 7%, while its Boat Group should see growth of 7% to 8%. “Our performance of the large fiberglass sterndrive-inboard boat business has impeded our ability to meet our operating margin goals for the segment,” noted Schwabero. “In the short term, we do not expect the demand environment for large fiberglass sterndrive/inboard product to materially improve, partially due to the hurricane impacts.”

Metzger added that weak retail demand and pipeline reductions for its larger boats will continue into 2018. “We're probably going to be shipping at wholesale below retail for some period into '18 until we see some sort of change in what the market's doing,” he said.

Hurricane Irma mostly impacted Boston Whaler’s production facilities and Sea Ray facilities producing larger sport yachts. Production at its Boston Whaler’s facility will be back on track by the end of this year, said Metzger, while its sport yacht business recovery will “flow into 2018.”

Brunswick will reveal its next three-year plan on November 9.