Brunswick & West Marine tell a story
It used to be said that the recreational marine industry provided a forecast that the economy was going into recession.
The rationale was that the “smart” money saw a recession coming and decreased their discretionary spending some six months or so before the rest of the country. The reverse was also a guide because they started spending again earlier than anyone else.
A corollary of this was that during a recession people did not buy new boats but spent money on their existing ones. If this is the case the recent financial results from Brunswick and West Marine tell us the recreational marine market is still in recession.
On 28 July Brunswick reported its 2nd Qtr 2011 earnings. In its statement the company reviewed the preliminary second quarter US marine industry data. “Fiberglass, stern drive and inboard unit demand fell by 8%,” said the company. “This compares to declines of 18% in the first quarter of 2011 and 29% in the second quarter of 2010. For the first six months of 2011, unit demand fell by 12%”.
Brunswick also stated that aluminum product increased by 1% over the same period last year and that outboard fiberglass boat retail demand increased 3%. Brunswick believes that the data thus far “appears to be consistent with our plan for a flat 2011 retail market”.
Also on 28 July, West Marine reported its net revenues for the 13 weeks ended July 2, 2011 were up $2.6m to $236.0m compared to the same period 2010. Revenues in its Store section were up $2.2m.
West Marine attributed this increase to “increased sales of discretionary items, such as apparel and electronics, partially offset by lower sales of product categories that were driven last year by efforts to clean up the oil spill in the Gulf of Mexico”.
