Braunschweig CEO David Foulkes told CNBC’s Jim Cramer on Friday to build more boats to keep up with unprecedented demand for watercraft.
Retail interest in boats was above normal in view of the pandemic, which contributed to the manufacturer’s double-digit growth in the third quarter.
As of the first half of 2020, both seasoned boaters and newbies to Brunswick, whose brands include Mercury, Mariner, Boston Whaler, and Bayliner, have run out of inventory as they found ways to spend time outdoors.
“We didn’t have enough pipeline inventory to service this, so pipeline inventory has dropped sharply. It’s about half where it normally should be at this time of year, which means we’re ramping up ours asap Production facilities, “said Foulkes in a”Bad money“Interview.
Even as the cold weather months approach, Brunswick continues to see order numbers strong for the off-season. The company is keen to replenish those orders while keeping supplies on the shelves, Foulkes said.
“Even if we produce at maximum capacity, Jim, our pipelines will likely drop to two-thirds of the site by the end of the year, possibly even less,” he said.
The comments come after the Mettawa, Illinois-based company posted better-than-expected third-quarter results. According to Factset, sales in Brunswick increased 26% compared to the same quarter last year. Business in the first quarter grew after five consecutive quarters of declines.
Brunswick also manufactures exercise equipment through the Life Fitness and Hammer Strenght brands.
Brunswick reported earnings per share of $ 1.80 on Thursday, a 42-cent profit on sales of $ 1.23 billion, beating a factset estimate of $ 1.08 billion.
The company’s shares were trading at $ 63.71, up 6% year over year after trading relatively flat on Friday.