Brunswick Corporation

11/05/2026 | Press release | Distributed by Public on 11/05/2026 12:56

Quarterly Report for Quarter Ending October 3, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Certain statements in Management's Discussion and Analysis of Financial Condition and Results of Operations of Brunswick Corporation (the Company, we, us, our) are forward-looking statements. Forward-looking statements are based on current expectations, estimates, and projections about our business and by their nature address matters that are, to different degrees, uncertain. Actual results may differ materially from expectations and projections as of the date of this filing due to various risks and uncertainties. For additional information regarding forward-looking statements, refer to Forward-Looking Statements below.
Certain statements in Management's Discussion and Analysis are based on non-GAAP financial measures. GAAP refers to generally accepted accounting principles in the United States. A "non-GAAP financial measure" is a numerical measure of a registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the consolidated statements of operations, balance sheets or statements of cash flows of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. For example, the discussion of our cash flows includes an analysis of free cash flows and total liquidity; the discussion of our net sales includes net sales on a constant currency basis; and the discussion of our earnings includes a presentation of operating earnings, operating margin, and adjusted net earnings from continuing operations excluding restructuring, exit and impairment charges, purchase accounting amortization, acquisition, integration, and IT related costs, supplier bankruptcy expenses and other applicable charges, and Adjusted diluted earnings per common share. Supplier bankruptcy expenses include additional expenses incurred, in excess of normal inventory costs, to purchase inventory from a key supplier that filed for bankruptcy. Adjusted income tax expense represents the recalculated income tax provision (benefit) on Adjusted net earnings (loss) from continuing operations. Non-GAAP financial measures do not include operating and statistical measures.
We include non-GAAP financial measures in Management's Discussion and Analysis as management believes these measures and the information they provide are useful to investors because they permit investors to view our performance using the same tools that management uses to evaluate our ongoing business performance. In order to better align our reported results with the internal metrics management uses to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to acquisitions, among other adjustments.
We do not provide forward-looking guidance for certain financial measures on a GAAP basis because we are unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit and impairment costs, acquisition-related costs, and certain other unusual adjustments.
Segment operating earnings (loss) includes profit on intersegment sales when the product is ultimately sold to an external customer. Segment eliminations adjust for sales between our reportable segments and primarily relate to the sale of engines and parts and accessories to various boat brands, which are consummated at established arm's length transfer prices as the intersegment pricing for these engines and parts and accessories is based upon and consistent with selling prices to third-party customers.
Known Trends or Uncertainties
We continue to monitor macroeconomic trends and uncertainties such as recently implemented tariffs along with the potential for new or modified tariffs, and related impacts to consumers, any or all of which could have a material impact on our business, financial condition and results of operations.
Following the February 20, 2026 ruling by the U.S. Supreme Court that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were not authorized by statute, the Company submitted claims through the Consolidated Automated Processing of Entries (CAPE) system to recover previously paid IEEPA tariffs. As of July 4, 2026, claims totaling $34.3 million had been accepted within the CAPE System, and the Company concluded recovery was probable. For the three and nine months ended October 3, 2026, the Company recognized a $2.5 million and $32.9 million reduction to Cost of sales, respectively, with the remaining $1.4 million recorded as a reduction to inventory for tariff costs capitalized in inventory.
During the three months ended October 3, 2026, the Company collected $29.1 million of the related receivable and did not recognize any additional IEEPA tariff refund receivables. As of October 3, 2026, outstanding IEEPA tariff refund receivables totaled $1.8 million and were included in Prepaid expenses and other on the Condensed Consolidated Balance Sheets. The Company believes recovery of the recognized receivables is probable; however, the timing of cash collections remains subject to processing by U.S. Customs and Border Protection and the U.S. Department of the Treasury.
The Company has not recognized receivables for claims that had not been accepted through the CAPE system or had not yet been submitted as of October 3, 2026. The Company currently estimates total IEEPA tariff refunds of approximately $60 million to $70 million.
Overview
Net sales increased 7% during the third quarter of 2026 compared with the third quarter of 2025. Sales growth reflected steady OEM demand across the portfolio, along with pricing actions taken in previous periods, continued market share gains, and healthy boating participation supporting parts, accessories, and aftermarket demand. The Propulsion segment delivered another robust quarter driven by consistent OEM demand and growth in high-horsepower applications. The Engine P&A segment delivered its strongest quarter in years, benefiting from sustained boating participation buttressed by favorable late-season weather. The Navico Group segment delivered another quarter of sales growth and adjusted margin expansion, supported by OEM wins, steady aftermarket performance, exciting new product introductions, and continued successful execution of operational improvement initiatives. Finally, the Boat segment grew both sales and earnings, led by strength in premium and core products, together with pricing realization, and continued operational efficiencies. Our international net sales increased 7 percent on a GAAP basis and increased 6 percent on a constant currency basis in the third quarter when compared with the prior year.
Operating earnings in the third quarter of 2026 were $104.0 million and $146.7 million on a GAAP and As Adjusted basis, respectively. This compares to operating (loss) earnings during the third quarter of 2025 of $(242.2) million and $106.4 million on a GAAP and As Adjusted basis, respectively. Operating earnings increased due to stronger sales, lower goodwill and intangible asset impairment charges, operational strength and efficiency across the enterprise, improved absorption on higher production, favorable mix, and disciplined cost management, together with the lapping of last year's tariff impacts, more than offset material and labor inflation and planned spending on product and technology initiatives.
Operating earnings during the nine months ended October 3, 2026 were $283.7 million and $379.4 million on a GAAP and As Adjusted basis, respectively. This compares to operating (loss) earnings during the nine months ended September 27, 2025 of $(82.6) million and $304.5 million on a GAAP and As Adjusted basis, respectively. Operating earnings were up versus prior year due to the same factors described above.
Matters Affecting Comparability
Changes in Foreign Currency Rates. Percentage changes in net sales expressed in constant currency reflect the impact that changes in currency exchange rates had on comparisons of net sales. To determine this information, net sales transacted in currencies other than the U.S. dollar have been translated to U.S. dollars using the average exchange rates that were in effect during the comparative period. The percentage change in net sales expressed on a constant currency basis better reflects the changes in the underlying business trends, excluding the impact of translation arising from foreign currency exchange rate fluctuations. Approximately 26 percent of our annual net sales are transacted in a currency other than the U.S. dollar. Our most material exposures include sales in Euros, Canadian dollars, Australian dollars, and Brazilian real.
Results of Operations
Consolidated
The following table sets forth certain amounts, ratios, and relationships calculated from the Condensed Consolidated Statements of Operations for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
(in millions, except per share data) Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
Net sales $ 1,453.9 $ 1,360.2 $ 93.7 6.9 % $ 4,389.8 $ 4,029.0 $ 360.8 9.0 %
Cost of sales 1,042.1 1,009.4 32.7 3.2 % 3,196.6 3,004.6 192.0 6.4 %
Gross margin(A)
411.8 350.8 61.0 17.4 % 1,193.2 1,024.4 168.8 16.5 %
Selling, general, and administrative expense 237.5 215.8 21.7 10.1 % 730.7 640.4 90.3 14.1 %
Research and development expense 49.2 43.4 5.8 13.4 % 145.9 123.7 22.2 17.9 %
Restructuring, exit, and impairment charges 21.1 333.8 (312.7) (93.7) % 32.9 342.9 (310.0) (90.4) %
Operating earnings (loss) 104.0 (242.2) 346.2 NM 283.7 (82.6) 366.3 NM
Equity earnings 1.3 1.5 (0.2) (13.3) % 4.6 5.4 (0.8) (14.8) %
Other expense, net (1.0) (0.4) (0.6) NM (3.7) (0.5) (3.2) NM
Earnings (loss) before interest and income taxes 104.3 (241.1) 345.4 NM 284.6 (77.7) 362.3 NM
Interest expense (22.9) (27.0) 4.1 (15.2) % (72.3) (86.7) 14.4 (16.6) %
Interest income 1.5 1.8 (0.3) (16.7) % 3.9 5.2 (1.3) (25.0) %
Loss on early extinguishment of debt - - - NM - (3.7) 3.7 NM
Earnings (loss) before income taxes 82.9 (266.3) 349.2 NM 216.2 (162.9) 379.1 NM
Income tax (benefit) provision 17.3 (32.0) 49.3 NM 21.4 (8.4) 29.8 NM
Net earnings (loss) from continuing operations 65.6 (234.3) 299.9 NM 194.8 (154.5) 349.3 NM
Net loss from discontinued operations, net of tax (4.0) (1.2) (2.8) NM (2.4) (1.5) (0.9) 60.0 %
Net earnings (loss) $ 61.6 $ (235.5) $ 297.1 NM $ 192.4 $ (156.0) $ 348.4 NM
Diluted earnings (loss) per common share from continuing operations $ 1.01 $ (3.57) $ 4.58 NM $ 2.97 $ (2.34) $ 5.31 NM
Expressed as a percentage of Net sales:
Gross margin (A)
28.3 % 25.8 % 250 bps 27.2 % 25.4 % 180 bps
Selling, general, and administrative expense 16.3 % 15.9 % 40 bps 16.6 % 15.9 % 70 bps
Research and development expense 3.4 % 3.2 % 20 bps 3.3 % 3.1 % 20 bps
Restructuring, exit, and impairment charges 1.5 % 24.5 % NM 0.7 % 8.5 % (780) bps
Operating margin 7.2 % (17.8) % NM 6.5 % (2.1) % 860 bps
NM = not meaningful
bps = basis points
(A)Gross margin is defined as Net sales less Cost of sales as presented in the Condensed Consolidated Statements of Operations.
The following is a reconciliation of our non-GAAP measures, adjusted operating earnings and adjusted net earnings from continuing operations for the three and nine months ended October 3, 2026 when compared with the same prior year comparative period:
Three Months Ended Nine Months Ended
Operating Earnings Operating Earnings
(in millions) Oct 3, 2026 Sep 27, 2025 Oct 3, 2026 Sep 27, 2025
GAAP $ 104.0 $ (242.2) $ 283.7 $ (82.6)
Restructuring, exit, and impairment charges 21.1 333.8 32.9 342.9
Purchase accounting amortization 14.8 14.8 43.7 44.1
Loss on sale of business/assets 7.4 - 7.9 -
Acquisition, integration, and IT related costs 0.2 - 0.8 0.1
Supplier bankruptcy expense (0.8) - 10.4 -
As Adjusted $ 146.7 $ 106.4 $ 379.4 $ 304.5
GAAP operating margin 7.2 % (17.8) % 6.5 % (2.1) %
Adjusted operating margin 10.1 % 7.8 % 8.6 % 7.6 %
Three Months Ended Nine Months Ended
(in millions, except per share data) Oct 3, 2026 Sep 27, 2025 Oct 3, 2026 Sep 27, 2025
GAAP net earnings (loss) from continuing operations $ 65.6 $ (234.3) $ 194.8 $ (154.5)
Income tax provision (benefit) 17.3 (32.0) 21.4 (8.4)
Restructuring, exit and impairment charges 21.1 $ 332.9 32.9 $ 342.0
Purchase accounting amortization 14.8 14.8 43.7 44.1
Loss (gain) on sale of business/assets 7.4 - 7.9 (0.2)
Acquisition, integration, and IT related costs 0.2 - 0.8 0.1
Supplier bankruptcy expense (0.8) - 10.4 -
Loss on debt extinguishment - - - 3.7
Adjusted net earnings from continuing operations before taxes $ 125.6 $ 81.4 $ 311.9 $ 226.8
Adjusted income tax provision (1)
22.7 17.6 60.4 49.1
Adjusted net earnings from continuing operations $ 102.9 $ 63.8 $ 251.5 $ 177.7
Adjusted diluted earnings per share $ 1.58 $ 0.97 $ 3.83 $ 2.69
(1) Adjusted income tax provision was calculated using an 18.1% and 21.6% rate for the three months ended October 3, 2026 and September 27, 2025, respectively and 19.4% and 21.7% rate for the nine months ended October 3, 2026 and September 27, 2025, respectively.
Net sales increased 6.9% during the third quarter of 2026 compared with the same prior year period. The components of the consolidated net sales change were as follows:
Percent change in net sales compared to the prior comparative period
October 3, 2026
Three Months Ended Nine Months Ended
Volume 2.9 % 3.5 %
Product Mix and Price 3.8 % 4.0 %
Currency 0.2 % 1.5 %
6.9 % 9.0 %
Gross margin increased 250 bps in the third quarter of 2026 when compared to the same prior year period, driven by increased sales (260 bps), impact of incremental tariffs (140 bps), higher absorption (125 bps), and favorable foreign currency exchange rate fluctuations (25 bps) offset by material inflation (200 bps) and labor inflation (100 bps).
Gross margin increased 180 bps during the nine months ended October 3, 2026 when compared to the same prior year period, driven by increased sales (350 bps), higher absorption (95 bps), decreased incremental tariffs (30 bps), partially offset by material inflation (160 bps) and labor inflation (100 bps), and currency exchange rate fluctuations (35 bps).
Selling, general and administrative expense as a percentage of net sales increased 40 basis points during the third quarter of 2026 compared with the same prior year period due to increased spending in support of growth and operational initiatives. Research and development expense increased in the third quarter of 2026 versus the same period in 2025 due to accelerated, strategic investments in new products.
Selling, general and administrative expense as a percentage of net sales increased 70 basis points during the nine months ended October 3, 2026 when compared with the same prior year period due to increased spending in support of growth and operational initiatives and increased variable compensation. Research and development expense increased during the nine months ended October 3, 2026 versus the same period in 2025.
We recorded Restructuring, exit and impairment charges of $21.1 million and $32.9 million during the three and nine months ended October 3, 2026, respectively. We recorded Restructuring, exit and impairment charges of $333.8 million and $342.9 million during the three and nine months ended September 27, 2025, respectively. Third quarter 2026 actions are not expected to result in material annualized cost savings. Refer to Note 3 - Restructuring, Exit, and Impairment Activities in the Notes to Condensed Consolidated Financial Statements for further information.
We recorded Equity earnings of $1.3 million and $4.6 million in the three and nine months ended October 3, 2026, respectively, which were primarily related to our marine and technology-related joint ventures. This compares with Equity earnings of $1.5 million and $5.4 million in the three and nine months ended September 27, 2025, respectively.
We recognized $1.0 million and $3.7 million of Other expense, net in the three and nine months ended October 3, 2026, respectively. This compares with $0.4 million and $0.5 million of Other expense, net in the three and nine months ended September 27, 2025, respectively. Other expense, net primarily includes remeasurement gains and losses resulting from changes in foreign currency rates and other post-retirement benefit costs.
Net interest expense decreased for the three and nine months ended October 3, 2026 when compared with the same prior year period due to lower average debt outstanding resulting from debt repayments. Refer to Note 11 - Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2025 Form 10-K.
We recognized an Income tax provision (benefit) for the three and nine months ended October 3, 2026 of $17.3 million and $21.4 million compared to $(32.0) million and $(8.4) million for the three and nine months ended September 27, 2025, respectively. The effective tax rate, which is calculated as the Income tax provision (benefit) as a percentage of Earnings (loss) before income taxes, was 20.9% and 9.9% compared to 12.0% and 5.2% for the three and nine months ended October 3, 2026 and September 27, 2025, respectively.
Due to the factors described in the preceding paragraphs, Net earnings from continuing operations and Diluted earnings per common share from continuing operations increased during the three and nine months ended October 3, 2026 compared with the same prior year period.
Propulsion Segment
The following table sets forth Propulsion segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
(in millions) Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
Sales - external $ 503.2 $ 472.0 $ 31.2 6.6 % $ 1,573.6 $ 1,410.7 $ 162.9 11.5 %
Sales - intersegment 67.3 63.4 3.9 6.2 % 212.2 209.9 2.3 1.1 %
Total sales $ 570.5 $ 535.4 $ 35.1 6.6 % $ 1,785.8 $ 1,620.6 $ 165.2 10.2 %
GAAP operating earnings $ 51.0 $ 45.1 $ 5.9 13.1 % $ 156.6 $ 157.0 $ (0.4) (0.3) %
Restructuring, exit and impairment charges 17.8 - 17.8 NM 17.8 1.2 16.6 NM
Purchase accounting amortization 0.4 0.3 0.1 33.3 % 1.0 0.9 0.1 11.1 %
Supplier bankruptcy expense (0.6) - (0.6) NM 7.6 - 7.6 NM
Acquisition, integration, and IT related costs - - - NM - 0.1 (0.1) NM
Adjusted operating earnings $ 68.6 $ 45.4 $ 23.2 51.1 % $ 183.0 $ 159.2 $ 23.8 14.9 %
GAAP operating margin 8.9 % 8.4 % 50 bps 8.8 % 9.7 % (90) bps
Adjusted operating margin 12.0 % 8.5 % 350 bps 10.2 % 9.8 % 40 bps
NM = not meaningful
bps = basis points
Propulsion segment's net sales increased in the third quarter of 2026 compared to the third quarter of 2025, driven by steady OEM demand in a low pipeline environment and growth in high-horsepower outboard applications.
Propulsion segment's net sales increased during the nine months ended October 3, 2026 versus 2025, due to the same factors described above.
The components of the Propulsion segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
October 3, 2026
Three Months Ended Nine Months Ended
Volume 3.1 % 6.6 %
Product Mix and Price 3.0 % 1.7 %
Currency 0.5 % 1.9 %
6.6 % 10.2 %
International sales were 37 percent of the Propulsion segment's net sales in the third quarter of 2026 and increased 9 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased 7 percent.
International sales were 39 percent of Propulsion segment's net sales during the nine months ended October 3, 2026 and increased 14 percent from prior year on a GAAP basis. On a constant currency basis, international sales increased 9 percent.
Propulsion segment's operating earnings in the third quarter of 2026 increased when compared to the third quarter of 2025, reflecting the leverage from higher sales, favorable mix, improved absorption, and reduced year-over-year tariff pressure offsetting continued planned product development investment, ongoing material, freight, and labor inflation, and the non-cash goodwill and intangible asset impairment charges recorded in the quarter.
Operating earnings during the nine months ended October 3, 2026 decreased when compared to the nine months ended September 27, 2025 due to the non-cash goodwill and intangible asset impairment charges recorded in the year more than offsetting the same factors described above.
Engine P&A Segment
The following table sets forth Engine P&A segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
(in millions) Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
Sales - external $ 378.9 $ 361.9 $ 17.0 4.7 % $ 1,033.1 $ 950.7 $ 82.4 8.7 %
Sales - intersegment 2.0 1.8 0.2 11.1 % 5.5 6.1 (0.6) (9.8) %
Total sales $ 380.9 $ 363.7 $ 17.2 4.7 % $ 1,038.6 $ 956.8 $ 81.8 8.5 %
GAAP operating earnings $ 93.8 $ 82.4 $ 11.4 13.8 % $ 225.0 $ 193.2 $ 31.8 16.5 %
Supplier bankruptcy expense (0.2) - (0.2) NM 2.8 - 2.8 NM
Restructuring, exit, and impairment charges - - - - % - 0.4 (0.4) NM
Adjusted operating earnings $ 93.6 $ 82.4 $ 11.2 13.6 % $ 227.8 $ 193.6 $ 34.2 17.7 %
GAAP operating margin 24.6 % 22.7 % 190 bps 21.7 % 20.2 % 150 bps
Adjusted operating margin 24.6 % 22.7 % 190 bps 21.9 % 20.2 % 170 bps
NM = not meaningful
bps = basis points
Engine P&A segment's net sales increased in the third quarter of 2026 compared to the third quarter of 2025, led by sustained boater participation, distribution share gains, and broad-based regional growth.
Engine P&A segment's net sales increased during the nine months ended October 3, 2026 compared to 2025 due to the same factors described above.
The components of the Engine P&A segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
October 3, 2026
Three Months Ended Nine Months Ended
Volume - % 2.8 %
Product Mix and Price 4.5 % 4.6 %
Currency 0.2 % 1.1 %
4.7 % 8.5 %
International sales were 29 percent of the Engine P&A segment's net sales in the third quarter of 2026 and increased 3 percent from the prior year on both a GAAP and constant currency basis.
International sales were 29 percent of Engine P&A segment's net sales during the nine months ended October 3, 2026 and increased 9 percent from prior year on a GAAP basis. On a constant currency basis, international sales increased 5 percent.
Engine P&A segment's operating earnings in the third quarter of 2026 increased compared to the third quarter of 2025, due to strong leverage on the higher sales and cost discipline partially offset by higher commodity and other material input costs.
Operating earnings during the nine months ended October 3, 2026 increased due to the same factors listed above.
Navico Group Segment
The following table sets forth Navico Group segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
(in millions) Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
Sales - external $ 178.0 $ 166.3 $ 11.7 7.0 % $ 571.3 $ 530.5 $ 40.8 7.7 %
Sales - intersegment 19.7 20.6 (0.9) (4.4) % 65.7 66.9 (1.2) (1.8) %
Total sales $ 197.7 $ 186.9 $ 10.8 5.8 % $ 637.0 $ 597.4 $ 39.6 6.6 %
GAAP operating (loss) earnings $ (1.5) $ (328.9) $ 327.4 (99.5) % $ 16.8 $ (339.3) $ 356.1 NM
Purchase accounting amortization 13.2 13.4 (0.2) (1.5) % 39.3 39.9 (0.6) (1.5) %
Restructuring, exit, and impairment charges 0.3 324.3 (324.0) (99.9) % 0.5 330.2 (329.7) (99.8) %
Adjusted operating earnings $ 12.0 $ 8.8 $ 3.2 36.4 % $ 56.6 $ 30.8 $ 25.8 83.8 %
GAAP operating margin (0.8) % NM NM 2.6 % (56.8) % NM
Adjusted operating margin 6.1 % 4.7 % 140 bps 8.9 % 5.2 % 370 bps
NM = not meaningful
bps = basis points
Navico Group segment's net sales increased in the third quarter of 2026 compared to the third quarter of 2025, supported by OEM demand, steady aftermarket sales, product launches, and new customer wins.
Navico Group segment's net sales increased during the nine months ended October 3, 2026 versus prior year due to the same factors described above.
The components of the Navico Group segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
October 3, 2026
Three Months Ended Nine Months Ended
Volume 2.5 % 1.2 %
Product Mix and Price 3.3 % 3.6 %
Currency - % 1.8 %
5.8 % 6.6 %
International sales were 41 percent of the Navico Group segment's net sales in the third quarter of 2026 and increased 5 percent from the prior year on both a GAAP basis and constant currency basis.
International sales were 42 percent of Navico Group segment's net sales during the nine months ended October 3, 2026 and increased 8 percent from prior year on a GAAP basis. On a constant currency basis, international sales increased 3 percent.
Navico Group segment's operating earnings in the third quarter of 2026 increased when compared to the third quarter of 2025 primarily due to the absence of the non-cash goodwill and intangible asset impairment charges recorded in the prior year, operational improvement actions and leverage on the higher sales more than offsetting material cost inflation.
Operating earnings during the nine months ended October 3, 2026 increased due to the same factors listed above.
Boat Segment
The following table sets forth Boat segment results and a reconciliation to our non-GAAP measure of adjusted operating earnings for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
(in millions) Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
Sales - external $ 393.8 $ 360.0 $ 33.8 9.4 % $ 1,211.8 $ 1,137.1 $ 74.7 6.6 %
Sales - intersegment 0.6 0.2 0.4 NM 1.7 0.8 0.9 112.5 %
Total sales $ 394.4 $ 360.2 $ 34.2 9.5 % $ 1,213.5 $ 1,137.9 $ 75.6 6.6 %
GAAP operating earnings (loss) $ 2.4 $ (3.3) $ 5.7 NM $ 24.2 $ 15.5 $ 8.7 56.1 %
Loss on sale of business/assets 7.4 - 7.4 NM 7.9 - 7.9 NM
Restructuring, exit, and impairment charges 3.0 9.3 (6.3) (67.7) % 11.8 10.6 1.2 11.3 %
Purchase accounting amortization 1.2 1.1 0.1 9.1 % 3.4 3.3 0.1 3.0 %
Acquisition, integration, and IT related costs 0.2 - 0.2 NM 0.8 - 0.8 NM
Adjusted operating earnings $ 14.2 $ 7.1 $ 7.1 100.0 % $ 48.1 $ 29.4 $ 18.7 63.6 %
GAAP operating margin 0.6 % (0.9) % 150 bps 2.0 % 1.4 % 60 bps
Adjusted operating margin 3.6 % 2.0 % 160 bps 4.0 % 2.6 % 140 bps
NM = not meaningful
bps = basis points
Boat segment's net sales increased in the third quarter of 2026 compared to the third quarter of 2025, driven by strength in premium and core products, and continued momentum in the Business Acceleration portfolio.
Boat segment's net sales increased during the nine months ended October 3, 2026 versus prior year due to the same factors described above.
The components of the Boat segment's net sales change were as follows:
Percent change in net sales compared to the prior comparative period
October 3, 2026
Three Months Ended Nine Months Ended
Volume 3.3 % (0.6) %
Product Mix and Price 6.3 % 6.8 %
Currency (0.1) % 0.4 %
9.5 % 6.6 %
International sales were 18 percent of the Boat segment's net sales in the third quarter of 2026 and increased 5 percent from the prior year on a GAAP basis. On a constant currency basis, international sales increased by 6 percent.
International sales were 21 percent of Boat segment's net sales during the nine months ended October 3, 2026 and increased 14 percent from prior year on a GAAP basis. On a constant currency basis, international sales increased 12 percent.
Boat segment's operating earnings in the third quarter of 2026 increased when compared to the third quarter of 2025, reflecting higher sales, favorable mix, and ongoing manufacturing and sourcing cost-reduction initiatives.
Boat segment's operating earnings during the nine months ended October 3, 2026 increased due to the same factors listed above.
Corporate/other
The following table sets forth Corporate/other results for the three and nine months ended:
Three Months Ended 2026 vs. 2025 Nine Months Ended 2026 vs. 2025
Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change 		Oct 3, 2026 Sep 27, 2025 $
Change 		%
Change
GAAP operating loss $ (41.7) $ (37.5) $ (4.2) (11.2) % $ (138.9) $ (109.0) $ (29.9) (27.4) %
Restructuring, exit, and impairment charges - 0.2 (0.2) NM 2.8 0.5 2.3 NM
Adjusted operating loss $ (41.7) $ (37.3) $ (4.4) (11.8) % $ (136.1) $ (108.5) $ (27.6) (25.4) %
NM = not meaningful
Corporate operating loss in the third quarter of 2026 increased compared to the third quarter of 2025 driven by increased spending in support of growth and operational initiatives and increased variable compensation.
Corporate operating loss during the nine months ended October 3, 2026 increased due to the same factors listed above.
Financing Joint Venture
Details of our Financing Joint Venture are outlined in the 2025 Form 10-K. There have been no material changes in our Financing Joint Venture since December 31, 2025.
Off-Balance Sheet Arrangements and Contractual Obligations
Our off-balance sheet arrangements and contractual obligations as of December 31, 2025 are discussed in the 2025 Form 10-K. There have been no material changes in these arrangements and obligations outside the ordinary course of business since December 31, 2025.
Environmental Regulation
There were no material changes in our environmental regulatory requirements since the filing of our 2025 Form
10-K.
Critical Accounting Policies
There were no material changes in our critical accounting policies since the filing of our 2025 Form 10-K.
As discussed in the 2025 Form 10-K, the preparation of the consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, and revenues and expenses during the periods reported. Actual results may differ from those estimates.
Recent Accounting Pronouncements
Recent accounting pronouncements that have been adopted during the nine months ended October 3, 2026, or will be adopted in future periods, are included in Note 1 - Significant Accounting Policies in the Notes to Condensed Consolidated Financial Statements.
Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations, estimates, and projections about Brunswick's business and by their nature address matters that are, to different degrees, uncertain. Words such as "may," "could," "should," "expect," "anticipate," "project," "position," "intend," "target," "plan," "seek," "estimate," "believe," "predict," "outlook," "will," and similar expressions are intended to identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties that may cause actual results to differ materially from expectations as of the date of this report. These risks include, but are not limited to: the effect of adverse general economic conditions, including rising interest rates, and the amount of disposable income consumers have available for discretionary spending; changes to trade policy and tariffs, including retaliatory tariffs; changes in currency exchange rates; fiscal and monetary policy changes; international business risks, geopolitical tensions or conflicts, sanctions, embargoes, or other regulations; adverse capital market conditions; competitive pricing pressures; higher energy and fuel costs; managing our manufacturing footprint and operations; loss of key customers; actual or anticipated increases in costs, disruptions of supply, or defects in raw materials, parts, or components we purchase from third parties; supplier manufacturing constraints, increased demand for shipping carriers, and transportation disruptions; adverse weather conditions, climate change events and other catastrophic event risks; our ability to develop new and innovative products and services at a competitive price; absorbing fixed costs in production; our ability to meet demand in a rapidly changing environment; public health emergencies or pandemics; our ability to successfully implement our strategic plan and growth initiatives; attracting and retaining skilled labor, implementing succession plans for key leadership, and executing organizational and leadership changes; our ability to integrate acquisitions and the risk for associated disruption to our business; the risk that restructuring or strategic divestitures will not provide business benefits; our ability to identify and complete targeted acquisitions; maintaining effective distribution; dealer and customer ability to access adequate financing; inventory reductions by dealers, retailers, or independent boat builders; requirements for us to repurchase inventory; risks related to the Freedom Boat Club franchise business model; outages, breaches, or other cybersecurity events regarding our technology systems, which have affected and could further affect manufacturing and business operations and could result in lost or stolen information and associated remediation costs; our ability to protect our brands and intellectual property; an impairment to the value of goodwill and other assets; product liability, warranty, and other claims risks; legal, environmental, and other regulatory compliance, including increased costs, fines, and reputational risks; risks associated with joint ventures that do not operate solely for our benefit; changes in income tax legislation or enforcement; managing our share repurchases; and risks associated with certain divisive shareholder activist actions.
Additional risk factors are included in the 2025 Form 10-K and may be further updated in our filings with the SEC. Forward-looking statements speak only as of the date on which they are made, and Brunswick does not undertake any obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.
Cash Flow, Liquidity and Capital Resources
The following table sets forth data from our Condensed Consolidated Statements of Cash Flows for the nine months ended:
(in millions) October 3, 2026 September 27, 2025
Net cash provided by operating activities $ 436.4 $ 429.2
Net cash used for investing activities (173.6) (97.5)
Net cash used for financing activities (266.5) (313.2)
Effect of exchange rate changes (2.6) 11.2
Net (decrease) increase in Cash and cash equivalents and Restricted cash (6.3) 29.7
Cash and cash equivalents and Restricted cash at beginning of period 274.9 285.9
Cash and cash equivalents and Restricted cash at end of period $ 268.6 $ 315.6
The following table sets forth an analysis of free cash flow for the nine months ended:
(in millions) October 3, 2026 September 27, 2025
Net cash provided by operating activities of continuing operations $ 438.8 $ 451.1
Net cash (used for) provided by:
Add: Capital expenditures (148.9) (116.5)
Add: Proceeds from the sale of property, plant, and equipment 13.8 8.8
Add: Effect of exchange rate changes on cash and cash equivalents (2.6) 11.2
Total free cash flow (A)
$ 301.1 $ 354.6
(A) We define "Free cash flow" as cash flow from operating and investing activities of continuing operations (excluding cash provided by or used for acquisitions, investments, purchases or sales/maturities of marketable securities and other investing activities, net of tax) and the effect of exchange rate changes on cash and cash equivalents. Free cash flow is not intended as an alternative measure of cash flow from operations, as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same tool that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Free cash flow" is also useful to investors because it is an indication of cash flow that may be available to fund investments in future growth initiatives.
Our major sources of funds for capital investments, acquisitions, share repurchase programs, and dividend payments are cash generated from operating activities, available cash and marketable securities balances, divestitures and borrowings. We evaluate potential acquisitions, divestitures and joint ventures in the ordinary course of business.
2026 Cash Flow
Net cash provided by operating activities of continuing operations in the nine months ended October 3, 2026 totaled $438.8 million compared to $451.1 million in the nine months ended September 27, 2025. The decrease is primarily due to changes in working capital. Working capital is defined as Accounts and notes receivable, Inventories and Prepaid expenses and other, net of Accounts payable and Accrued expenses as presented in the Condensed Consolidated Balance Sheets, excluding the impact of acquisitions and non-cash adjustments. Accounts and notes receivable increased $6.6 million, due to timing of collections, Accounts payable increased $114.0 million, due to timing of payments, inventory increased $132.1 million due to increased production, and Accrued expenses decreased $7.2 million.
Net cash used for investing activities was $173.6 million and primarily related to $148.9 million of capital expenditures and $32.5 million related to the acquisitions of multiple Freedom Boat Club franchise operations and territories. Our capital spending was focused on investments in new products and technologies.
Net cash used for financing activities was $266.5 million and primarily related to payments of short-term debt, dividends paid to common shareholders and common stock repurchases.
Liquidity and Capital Resources
We view our highly liquid assets as of October 3, 2026, December 31, 2025 and September 27, 2025 as:
(in millions) October 3,
2026 		December 31,
2025 		September 27,
2025
Cash and cash equivalents $ 257.8 $ 256.8 $ 297.7
Short-term investments in marketable securities 10.8 0.8 0.8
Total cash, cash equivalents, and marketable securities $ 268.6 $ 257.6 $ 298.5
The following table sets forth an analysis of total liquidity as of October 3, 2026, December 31, 2025 and September 27, 2025:
(in millions) October 3,
2026 		December 31,
2025 		September 27,
2025
Cash, cash equivalents and marketable securities $ 268.6 $ 257.6 $ 298.5
Amounts available under lending facility (A)
984.2 994.0 997.0
Total liquidity (B)
$ 1,252.8 $ 1,251.6 $ 1,295.5
(A) See Note 11 - Debt in the Notes to Condensed Consolidated Financial Statements for further details on our lending facility.
(B) We define Total liquidity as Cash and cash equivalents and Short-term investments in marketable securities as presented in the Condensed Consolidated Balance Sheets, plus amounts available for borrowing under our lending facilities. Total liquidity is not intended as an alternative measure to Cash and cash equivalents and Short-term investments in marketable securities as determined in accordance with GAAP in the United States. We use this financial measure both in presenting our results to shareholders and the investment community and in our internal evaluation and management of our businesses. We believe that this financial measure and the information it provides are useful to investors because it permits investors to view our performance using the same metric that we use to gauge progress in achieving our goals. We believe that the non-GAAP financial measure "Total liquidity" is also useful to investors because it is an indication of our available highly liquid assets and immediate sources of financing.
Cash, cash equivalents and marketable securities totaled $268.6 million as of October 3, 2026, an increase of $11.0 million from $257.6 million as of December 31, 2025, and a decrease of $29.9 million from $298.5 million as of September 27, 2025. Total debt as of October 3, 2026, December 31, 2025 and September 27, 2025 was $2,001.5 million, $2,102.2 million and $2,193.2 million, respectively. Our debt-to-capitalization ratio was approximately 54 percent as of October 3, 2026 compared to 56 percent as of December 31, 2025 and 57 percent as of September 27, 2025.
There were no borrowings under the Revolving Credit Agreement (Credit Facility) during the nine months ended October 3, 2026 and we did not have any borrowings outstanding as of October 3, 2026. Available borrowing capacity under the Credit Facility as of October 3, 2026 totaled $984.2 million, net of $15.8 million of letters of credit outstanding. During the nine months ended October 3, 2026, the maximum amount utilized under the CP Program was $540.0 million, and as of October 3, 2026, the Company had $190.0 million of borrowings outstanding under the CP Program. Refer to Note 11 - Debt in the Notes to Condensed Consolidated Financial Statements and Note 14 - Debt in the Notes to Consolidated Financial Statements in the 2025 Form 10-K, for further details.
The levels of borrowing capacity under our Credit Facility and CP Program are limited by both a leverage and interest coverage test. These covenants also pertain to termination provisions included in our wholesale financing joint-venture arrangements with Wells Fargo Commercial Distribution Finance. As of October 3, 2026, Brunswick was in compliance with the financial covenants associated with its debt and based on our anticipated earnings generation throughout the year, we expect to maintain sufficient cushion against the existing debt covenants.
2026 Capital Strategy
The Company anticipates at least $160 million of debt reduction, $200 million of capital expenditures, and share repurchases of at least $80 million for the year.
Brunswick Corporation published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 18:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]