Financial Data and Key Metrics Changes - Brunswick reported third quarter sales of $1.4 billion, a 7% increase year-over-year, with adjusted earnings per share (EPS) of $0.97, impacted by variable compensation and tariffs but showing growth excluding those items [5][20][21] - Free cash flow for the third quarter was $111 million, totaling $355 million year-to-date, marking a $348 million improvement over the same period last year [5][18][21] - The company is on track to retire approximately $375 million of debt by year-end 2025, increasing its debt reduction guidance for the year to $200 million [18][19] Business Line Data and Key Metrics Changes - The propulsion business saw a 10% sales growth, with all product categories (outboard, sterndrive, and controls rigging) performing well [22] - Engine Parts and Accessories segment sales increased by 8%, benefiting from strong boater participation and favorable weather [22][24] - The boat segment reported a 4% sales growth, with premium brands performing particularly well, and Freedom Boat Club contributing approximately 13% of segment sales [25][26] Market Data and Key Metrics Changes - U.S. retail powerboat industry was down over 9% year-to-date, but Brunswick's brands outperformed the industry, maintaining a stable market share of 49.4% in the outboard engine segment [12][13] - Dealer inventory levels are historically low, with Brunswick's global pipeline down over 2,200 units compared to 2024 [14][15] - The company anticipates a modestly stronger retail market in 2026, driven by interest rate reductions and macroeconomic stability [34][35] Company Strategy and Development Direction - Brunswick is focusing on financial and operational efficiencies, including consolidating boat manufacturing facilities to reduce costs and improve profitability [9][17] - The introduction of innovative products, such as the CIMRAD AutoCaptain autonomous boating system, reflects the company's commitment to technological advancement and market leadership [32][33] - The company aims to maintain a competitive edge through its vertically integrated U.S. manufacturing base and tariff mitigation strategies [11][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the retail environment, noting a positive inflection point and stable dealer sentiment despite previous macroeconomic shocks [42][43] - The company expects to continue generating strong free cash flow and is comfortable with its full-year EPS guidance despite increased tariff impacts [26][35] - Management highlighted the importance of ongoing product development and operational efficiency improvements in driving future growth [68][89] Other Important Information - Brunswick's liquidity remains strong, with $1.3 billion available, including access to an undrawn revolving credit facility [19] - The company has seen significant improvements in gross margins and operational performance through strategic initiatives [25][68] Q&A Session Summary Question: Retail outlook and 2026 expectations - Management noted that retail performance has stabilized, with premium and core products outperforming value segments, and expressed confidence in a flat to slightly up market for 2026 [42][43] Question: Impact of U.S. tariffs on competitors - Management confirmed that competitors are beginning to implement price increases in response to tariffs, while Brunswick continues to gain market share [52][54] Question: Navico's operating earnings and margin expansion - Management confirmed that Navico's margins would have improved absent the impacts of tariffs and variable compensation, with expectations for further expansion as headwinds are lapped [62][68] Question: Inventory levels and market share growth - Management indicated that dealer inventory levels are healthy, with a focus on maintaining fresh inventory as they enter 2026, and expressed confidence in continued market share growth for Mercury [85][86] Question: 2026 guidance and destocking effects - Management clarified that mid to high single-digit revenue growth for 2026 will be driven by a combination of market share gains, pricing actions, and improved discounting, with minimal impact from lapping destocking [94][95]