Retail Stats Show Hope For Boats

Baird said data from Statistical Surveys show that U.S. powerboat retail increased 3 percent in May, a key month accounting for 16 percent of annual sales.

The data assumes significance for Brunswick Corporation BC, a maker of marine engines and boats, and MCBC Holdings Inc MCFT, which makes recreational sport boats primarily under the MasterCraft brand. The analyst has an Outperform rating on both stocks.

"While the SSI result for May results is significantly better than some earlier indications (one industry source reported an 8 percent decline in new/used volume), slower April/May trends suggest the most optimistic marine scenarios are unlikely to materialize this year," analyst Craig Kennison wrote in a note.

Related Link: MCBC Holdings' MasterCraft Announces Special Cash Dividend Of $4.30 A Share

In addition, U.S. retail by category was relatively mixed in May. Aluminum fishing boats (+6 percent), pontoons (+5 percent) and fiberglass outboards (+7 percent) were areas of relative strength during the month. "However, most fiberglass IO/OB categories underperformed the broader market," Kennison added.

Further, the data shows that the ski/wake category modestly underperformed the broader powerboat market in May, falling 1 percent. Year-to-date, SSI still has the category up 8 percent.

The data indicate PWC sales dropped 5 percent in May, based on preliminary SSI data.

Shares of Brunswick closed Wednesday's regular trading at $48.43, while MCBC ended at $11.14.