Financial Data and Key Metrics Changes - Brunswick's third-quarter sales reached $1.4 billion, representing a 7% increase compared to the prior year [5][17] - Adjusted EPS was $0.97, impacted by reinstated variable compensation and tariffs, but showed year-over-year growth when excluding these items [5][18] - 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 [6][15] Business Line Data and Key Metrics Changes - The propulsion business saw a 10% sales growth, with all product categories (outboard, stern drive, and controls rigging) performing well [19] - Engine parts and accessories segment sales increased by 8%, benefiting from strong boater participation and favorable weather [20] - The boat segment reported a 4% sales growth, driven by strong performance in aluminum boat brands and Freedom Boat Club, which contributed approximately 13% of segment sales [22] Market Data and Key Metrics Changes - U.S. main power boat industry retail was down over 9% year-to-date, but Brunswick's brands outperformed the industry [12][13] - Mercury maintained a stable market share of 49.4% in the U.S. outboard engine market, with strong share gains internationally [13][19] - Dealer inventory levels remained historically low, supporting steady wholesale shipments [10][40] Company Strategy and Development Direction - Brunswick is focusing on financial and operational efficiencies, including margin-accretive footprint actions and tariff mitigation initiatives [4][10] - The company announced a strategic rationalization of its fiberglass boat manufacturing footprint, consolidating production to improve profitability [10][14] - The introduction of innovative products like the SIMRAD AutoCaptain autonomous boating system reflects Brunswick's commitment to integrated solutions and innovation [26][27] Management Comments on Operating Environment and Future Outlook - Management noted a challenging but improving macro environment, with expectations for continued sales and earnings growth into 2026 [4][29] - The company anticipates a modestly stronger 2026, driven by lower interest rates and stable retail market conditions [10][29] - Brunswick's vertically integrated U.S. manufacturing base positions it well in a persistent tariff environment [11][29] Other Important Information - Brunswick's balance sheet remains healthy, with no debt maturities until 2029 and a commitment to reducing debt by $200 million in 2025 [16] - The company has generated $1.6 billion in free cash flow since 2021, with a record $635 million over the last 12 months [15][16] Q&A Session Summary Question: Retail outlook and SSI numbers - Management indicated that retail performance has stabilized, with premium and core products outperforming value segments [32][34] Question: Inventory levels and wholesale to retail ratio - Brunswick's inventory levels are historically low, with over 80% being less than a year old, indicating a healthy inventory situation [39][40] Question: Impact of U.S. tariffs on competitors - Management noted that competitors are beginning to implement price increases in response to tariffs, while Brunswick continues to gain market share [44] Question: Clarification on 2026 outlook - The company expects mid to high single-digit revenue growth in 2026, driven by market share gains and improved discounting [76][78] Question: Transition impacts from plant consolidation - Short-term inefficiencies during the transition are expected to impact Q4 by a couple of million, but long-term savings of over $10 million annually are anticipated [80][83]