U.S. PWC May retail registrations declined vs. May 2021: SSI

BMO Capital Markets analyst Gerrick Johnson has provided Powersports Business with a research note following the release of preliminary data from Statistical Surveys Inc. (SSI).

“Preliminary data from Statistical Surveys (SSI) indicates May U.S. boat industry retail registrations declined -17% y/y (against a -7% comparison). Registrations also declined -23% on a two-year basis and -17% versus 2019. On a sequential basis, versus April, total registrations increased +21% owing to normal seasonality.

“Key Points

“May SSI registration data is based on reporting from 28 states (68% of the market). Key states included were CA, CT, FL, GA, LA, MI, MN, NC, NJ, NY, and TX, while key states not included were MA, MD, SC, VA, and WI. The data will be revised as more states report.

“Lack of inventory continues to be the main headwind for boat industry retail and is the primary reason the industry has transitioned from a ‘sell what you have’ to a ‘sell what you’re getting’ business model. We estimate that new dealer inventory, using Boat Trader as a guide, was up +40% y/y (-51% vs. 2019) at the end of May.

“Pontoon boat registrations declined -16% y/y (-5% vs. 2019). We think pontoon performance benefited from improving weather in Northern markets following cold and rainy weather to start the boating season. Winnebago’s (WGO-NYSE, $52.27, Outperform) Barletta grew in the quarter, while MasterCraft’s Crest, BRP’s (DOO, C$84.73, Outperform) Manitou, Brunswick’s (BC-NYSE, $68.86, Market Perform) brands, and Polaris’ (PII-NYSE, $106.92, Outperform) Godfrey all outperformed the segment. PII’s Bennington brand lagged.

“Saltwater outboard registrations decreased -16% y/y (-17% vs. 2019). BC’s Boston Whaler outperformed in the quarter. MBUU’s Maverick was flat, outperforming in the quarter, while its Cobia, Pursuit, and Pathfinder as well as MasterCraft’s (MCFT, not covered) Nautic Star lagged.

“Ski/wake boats saw registrations decline -17% y/y (+4% vs. 2019). Malibu Boats’ (MBUU-NSDQ, $54.03, Outperform) flagship Malibu brand and value orientated Axis brand, as well as MCFT’s flagship brand, lagged the industry.

“Aluminum fishing boat registrations declined -26% y/y (-28% vs. 2019). BC’s portfolio of brands and DOO’s AlumaCraft declined more than the overall segment.

“Registrations of fiberglass runabouts declined -29% y/y (-42% vs. 2019). Registrations for BC’s Bayliner actually grew y/y, while its Sea Ray brand slightly outperformed, but still declined, as did MBUU’s Cobalt brand. WGO’s Chris-Craft underperformed.

“Sales of personal watercraft declined -17% (-19% vs. 2019). DOO participates in PWC with its Sea-Doo brand but lagged the broader market in May. We expect Sea-Doo’s performance will improve as DOO accelerates PWC production in its FY2Q23.”