Boat and marine manufacturer Brunswick (NYSE:BC) reported Q4 CY2024 results topping the market’s revenue expectations, but sales fell by 15.2% year on year to $1.15 billion. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $1.1 billion was less impressive, coming in 12.6% below expectations. Its non-GAAP profit of $0.24 per share was 39.7% above analysts’ consensus estimates.
Is now the time to buy Brunswick? Find out by accessing our full research report, it’s free.
Brunswick (BC) Q4 CY2024 Highlights:
- Revenue: $1.15 billion vs analyst estimates of $1.04 billion (15.2% year-on-year decline, 11.3% beat)
- Adjusted EPS: $0.24 vs analyst estimates of $0.17 (39.7% beat)
- Management’s revenue guidance for the upcoming financial year 2025 is $5.4 billion at the midpoint, beating analyst estimates by 2.4% and implying 3.1% growth (vs -18% in FY2024)
- Adjusted EPS guidance for the upcoming financial year 2025 is $4.25 at the midpoint, missing analyst estimates by 17.4%
- Operating Margin: -4.8%, down from 8% in the same quarter last year
- Free Cash Flow Margin: 24%, up from 16.7% in the same quarter last year
- Market Capitalization: $4.50 billion
Company Overview
Formerly known as Brunswick-Balke-Collender Company, Brunswick (NYSE: BC) is a designer and manufacturer of recreational marine products, including boats, engines, and marine parts.
Leisure Products
Leisure products cover a wide range of goods in the consumer discretionary sector. Maintaining a strong brand is key to success, and those who differentiate themselves will enjoy customer loyalty and pricing power while those who don’t may find themselves in precarious positions due to the non-essential nature of their offerings.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Over the last five years, Brunswick grew its sales at a sluggish 5% compounded annual growth rate. This fell short of our benchmark for the consumer discretionary sector and is a rough starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Brunswick’s history shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 12.3% annually. 
This quarter, Brunswick’s revenue fell by 15.2% year on year to $1.15 billion but beat Wall Street’s estimates by 11.3%. Company management is currently guiding for a 19.4% year-on-year decline in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.
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Cash Is King
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Brunswick has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 6.1%, subpar for a consumer discretionary business.
Brunswick’s free cash flow clocked in at $277.7 million in Q4, equivalent to a 24% margin. This result was good as its margin was 7.4 percentage points higher than in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends carry greater meaning.
Over the next year, analysts’ consensus estimates show they’re expecting Brunswick’s free cash flow margin of 5.1% for the last 12 months to remain the same.
Key Takeaways from Brunswick’s Q4 Results
We were impressed by how significantly Brunswick beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance missed significantly and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 1.3% to $67.28 immediately after reporting.
So should you invest in Brunswick right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.