Brunswick Q2 2025: Earnings drop amid production and tariff pressures
Brunswick Corporation has announced its financial results for the second quarter of 2025. Earnings have taken a dive across multiple segments in the wake of Trump’s tariff policy. However, cash flow remains at record levels.
Net sales for the quarter total $1,447m, representing a 0.2 per cent increase compared to the same period in 2024. Operating earnings under GAAP were $103.3m, down 34.7 per cent from Q2 2024. As adjusted operating earnings were $126m, down 30.3 per cent. Operating margin decreased to 7.1 per cent on a GAAP basis and 8.7 per cent on an adjusted basis. The company reported GAAP diluted earnings per share (EPS) of $0.90 and as adjusted diluted EPS of $1.16.
Brunswick generated free cash flow of $288m in the quarter, a record for any second quarter in its history. Year-to-date free cash flow stands at $244m, compared to a negative $35m in the same period of 2024 — a year-on-year increase of $279m.
Chairman and chief executive David Foulkes says the quarter demonstrates the “power of our market-leading products and brands” combined with cost control, inventory management and growth in recurring revenue. “Our second quarter results again demonstrated the resiliency of our portfolio, with our recurring revenue businesses and channels, including our engine P&A business, propulsion’s repower business, Freedom Boat Club, and Navico Group’s aftermarket sales, contributing nearly 60 per cent of our second quarter adjusted operating earnings.”
Segment performance varied. The propulsion segment recorded a 7.2 per cent increase in sales to $598.2m, with US OEM orders ahead of expectations. However, GAAP operating earnings fell by 23.1 per cent to $65.8m, which the firm attributes primarily to tariff impacts and reduced production absorption.
Engine parts and accessories saw a 0.5 per cent rise in net sales to $337.8m. Operating earnings fell 5.2 per cent to $71.7m. Distribution sales grew by 4 per cent, but product sales declined by 4 per cent.
Navico Group posted a 3.7 per cent drop in sales to $202.3m. GAAP operating loss widened to $7.6m, although adjusted operating earnings totalled $10.8m, supported by new product uptake and restructuring actions.
Boat segment sales declined 6.6 per cent to $405.6m. Operating earnings decreased by 55.2 per cent to $11.1m. Freedom Boat Club contributed around 12 per cent of segment sales and signed its first Middle East franchisee in Dubai during the quarter.
Brunswick ended the quarter with $334.7m in cash and marketable securities. The company repurchased $43.1m in shares and paid $56.6m in dividends during the first half of 2025.
Brunswick maintains its full-year 2025 guidance, with expected net sales of approximately $5.2bn, adjusted diluted EPS of around $3.25 and free cash flow above $400m. Revenue for Q3 is projected between $1.1bn and $1.3bn, with adjusted diluted EPS forecasted between $0.75 and $0.9.
In a statement issued to investors, Foulkes says Brunswick remains focused on managing tariffs, investing in product development and scaling its technology platforms. He adds that the company is on track to launch an autonomous docking system later in the year and plans to deploy artificial intelligence tools in both customer service and software development.
“Our substantial, vertically integrated US manufacturing base, and the fact that we produce almost all our boats in the regions in which they are sold, positions us relatively well in an environment of persistent tariffs”, says Foulkes. “These tailwinds help to counter the risks remaining related to our 2025 performance and guidance, primarily due to the uncertainties of macro-economic conditions, tariffs and trade policy, the direct and indirect impact of these uncertainties on our consumers, and the interest rate environment.”
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