July personal watercraft, boat sales trends revealed

BMO Capital Markets analyst Gerrick Johnson has provided a research note to Powersports Business following the release of preliminary data from Statistical Surveys (SSI). The data indicates “July U.S. boat industry retail registrations declined -14% y/y (against a -38% comparison). Registrations also declined -47% on a 2-year basis and -37% vs. 2019. On a sequential basis, vs. June, total registrations declined -25%. In the main powerboat segments (ex sailboats, houseboats, etc) retail registrations declined -9% y/y (-52% on a 2-year basis, -33% vs. 2019).”

“July SSI registration data is based on reporting from 36 states (77% of the market). Key states included were CA, CT, FL, GA, LA, MI, MN, NC, NJ, NY, TX, and WI, while key states not included were MA, MD, SC, and VA. The data will be revised as more states report.

“Key Points

“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 new dealer inventory, using Boat Trader as a guide, increased +39% y/y at end of July, but was still -46% below 2019 levels.

“Pontoon boats, including incremental Sea-Doo Switch units from BRP (DOO, C$100.37, Outperform), outperformed the industry with registrations growing +4% y/y (-23% vs. 2019). Winnebago’s (WGO-NYSE, $63.15, Outperform) Barletta vastly outperformed the industry, up strong double-digits percent, while Polaris’ (PII-NYSE, $119.19, Outperform) Godfrey also grew a solid double-digits percent in the quarter. Brunswick’s (BC-NYSE, $80.35, Market Perform) brands MasterCraft’s (MCFT, not covered) Crest, PII’s Bennington, and DOO’s Manitou, all underperformed the industry, each declining double-digit percent.

“Ski/wake boats saw registrations decline -2% y/y (-27% vs. 2019). Malibu Boats’ (MBUU-NSDQ, $67.19, Outperform) flagship Malibu brand (-HDD%) and value-oriented Axis brand (-MSD%) both lagged, while MCFT’s flagship MasterCraft brand (flat) slightly outperformed the industry.

“Saltwater outboard registrations decreased -8% y/y (-21% vs. 2019). BC’s Boston Whaler outperformed but still declined slightly. MBUU’s Pathfinder (-DD%), Pursuit (-HDD%), and Cobia (-DD%), all lagged the market. MCFT’s Nautic Star, which is currently under a corporate strategic review, also lagged, declining a double-digits percent.

“Registrations of fiberglass runabouts declined -17% y/y (-52% vs. 2019). Registrations for BC’s Bayliner grew y/y, while its Sea Ray brand declined slightly less than the broader segment. MBUU’s Cobalt brand performed better than the industry, though still declined by double-digits percent. WGO’s Chris-Craft significantly underperformed.

“Aluminum fishing boat registrations declined -21% y/y (-43% vs. 2019). BC’s portfolio of brands declined a bit more than the overall segment. DOO’s AlumaCraft brand significantly underperformed the industry owing to a decision to exit the jon-boat business. We note that DOO has high expectations for its new “ghost” outboard engine platform, unveiled at its recent dealer event, which will be incorporated into future Alumacraft fishing boats.

“Sales of personal watercraft declined -28% (-42% vs. 2019). DOO participates in PWC with its Sea-Doo brand which slightly underperformed the broader market in July. We expect Sea-Doo’s performance will improve as DOO accelerates PWC production in its FY3Q23.”