Commercial Engine Sales Growth Helps Briggs & Stratton in Fiscal Q3
Briggs & Stratton posted $597 million in fiscal third quarter net sales, a decrease of $7 million or 1.1 percent compared to the previous year. Strong sales growth in commercial engines and products was offset by a sales decline in small engines because of OEM customers producing closer to the season, as the company anticipated.
Fiscal third quarter gross profit margin of 22.6 percent for Briggs & Stratton increased from GAAP gross profit margin of 21.1 percent and adjusted gross profit margin of 21.2 percent, primarily the result of a more favorable product mix, including a higher proportion of commercial engines and commercial products. The company also credited the positive impact of innovative new engines and improvements in manufacturing efficiencies.
Third quarter net income for Briggs & Stratton was $35.8 million, an increase from GAAP net income of $26.8 million and adjusted net income of $34.9 million last year.
“Our focus on growing higher margin commercial engines and products has been an important factor in driving our improved profitability over the last few years and we continued to make progress during our fiscal third quarter,” said Todd Teske, chairman and CEO. “The hard work over the past several years to reposition our product portfolio and manufacturing footprint in order to place the proper focus on commercial growth of engines, lawn and turf care and jobsite products is showing results as we have achieved solid growth driven in part by new product introductions. These markets present an attractive opportunity due to their size and anticipated growth rates. We believe that we have the brands, the products and the distribution network to grow our commercial portfolio in excess of the market.
“At the same time, we continue to introduce new innovative residential products and engines that will help homeowners get the job done. Our engine placement on residential lawnmowers again leads the market and positions us well for improvements across the housing market. As we have indicated throughout this fiscal year, both OEMs and retailers have been cautious in their ordering activity, choosing to produce and take inventory closer to the season. We saw this particularly in the most recently completed quarter. We remain optimistic that the upcoming season will reflect market growth in the U.S. of 1 to 4 percent over the course of the mowing season. Together, the base provided by our market-leading residential products combined with the higher margin, higher growth commercial products positions us well for profitable growth.”
For fiscal 2017, Briggs & Stratton expects net sales in a range of $1.86 billion to $1.9 billion.
Briggs & Stratton is based in Milwaukee.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.