Selling boat parts and club memberships has helped empower one boatmaker through a year of high demand and supply shortages.
At the end of January Brunswick Brunswick (BC) posted a top- and bottom-line earnings beat with a strong outlook for the remainder of the year. Boating demand surged throughout the pandemic, even outrunning supply by last summer.
CEO David Foulkes told Jim Cramer on the Mad Money TV show at the time that Brunswick has many growth levers at its disposal. Not only are they gaining market share in engines, its boat business grew by 5% and parts and accessories now accounts for 40% of revenue.
Foulkes told Cramer Brunswick is also benefiting from its Freedom Boat Club, which now boasts over 70,000 members across the country. The club offers a fleet of boats with reciprocal access for members in more than 300 locations in the US, Canada and Europe.
Notwithstanding the positives, Real Money’s Bruce Kamich said at the time that the charts told a cautious story. “Chart-wise, Brunswick is showing us a small upside price target with the risk of further declines," Kamich wrote at the time. “ I would avoid BC as an investment.”
The day after the earnings report, Brunswick closed at $89.92. It traded as high as $97.53 before the Russian invasion of Ukraine and although it traded above $97 one more time in the subsequent days, it has since come back to around $90.
