Boat maker Brunswick sees revenue growth but faces low inventory levels: CEO
Boat maker Brunswick will have low inventory by the end of 2021 as it continues seeing strong revenue growth and consumer demand, Brunswick CEO David Foulkes told CNBC on Friday.
While Foulkes said he expects Brunswick to meet its production forecast for 2021, he noted that the company is still recovering from pandemic-induced supply chain disruptions and labor shortages.
“We’re producing as much as we can, but we will still be in a very low inventory situation by the time we get through this year,” Foulkes said on CNBC’s “Power Lunch.” He said it will probably take more than two years to meet retail demand and backfill the industry pipeline at current production rates.
“We ended last year with unusually low inventory levels, and we’re obviously a very seasonal business so we’re producing pretty constantly through the year, but we need inventory to meet the needs of the peak selling season, which is really now for the Northern markets,” the executive explained. “So this is more about an inventory haul that was created last year in combination with just tremendous levels of retail demand.”
He said Brunswick is being “creative” to get the labor it needs and is producing “very efficiently and very effectively” to deal with the various disruptions.
Foulkes said Brunswick is seeing strong revenue growth, with overall company revenues up by more than 40% in the first quarter. He noted that its engine business now accounts for more than 45% of the U.S. market. The boat maker is the largest recreational marine company in the world, with 17 brands, including Mercury Marine, Boston Whaler and Freedom Boat Club.
Boat sales soared last year during the pandemic as many Americans adapted to flexible work environments that allowed people to spend extra time outdoors, and demand has continued to climb in the first half of 2021. Sales of boats, marine products and services in the U.S. reached a 13-year high in 2020 to $47 billion, an increase of 9% from the previous year, according to the National Marine Manufacturers Association.
Dealerships have since been struggling to maintain inventory, with manufacturers expanding production capacity to meet consumer demand.