Brunswick is tooling up to build more boats to keep up with unprecedented demand for personal watercraft, CEO David Foulkes told CNBC’s Jim Cramer Friday.
Retail interest in boats has been above usual levels amid the pandemic, he said, contributing to the manufacturer’s double-digit growth in the third quarter.
Since the first half of 2020, both veteran boaters and newcomers have depleted inventory at Brunswick, whose brands include Mercury, Mariner, Boston Whaler and Bayliner, as they found ways to spend time outdoors.
“We did not have enough pipeline inventory to serve that, so the pipeline inventory is down a lot. It’s about half of where it should be typically at this time of year, which means that we are ramping up as fast as we can in all of our production facilities,” Foulkes said in a “Mad Money” interview.
Even with cold-weather months approaching, Brunswick continues to see order numbers than are strong for the boating off season. The company is looking to backfill those orders, while managing to keep some supply on the shelves, Foulkes said.
“Even if we produce at max capacity though, Jim, probably our pipelines will be down at maybe two-thirds of where they should be by the end of the year, possibly even less,” he said.
The comments come after the Mettawa, Illinois-based company posted better-than-expected results for the third quarter. Brunswick’s revenue grew 26% from the year-ago quarter, the first quarter business grew after five-straight quarters of declines, according to Factset.
Brunswick also makes sporting equipment through the Life Fitness and Hammer Strenght brands.
Brunswick on Thursday reported earnings per share of $1.80, a 42-cent beat, on revenue of $1.23 billion, beating a Factset estimate of $1.08 billion.
Stock in the company was at $63.71, up 6% year to date, after trading relatively flat in Friday’s session.