Briggs & Stratton (BGG) Tops Q4 EPS by 6c, Revenues Beat; Offers FY19 EPS/Revenues Outlook Above Consensus

Briggs & Stratton (NYSE: BGG) reported Q4 EPS of $0.47, $0.06 better than the analyst estimate of $0.41. Revenue for the quarter came in at $501.69 million versus the consensus estimate of $500.23 million.

"Ongoing robust shipments of commercial products sustained growth for the quarter and year, and demonstrated the effectiveness of our diversification strategy," stated Todd J. Teske, Chairman, President and Chief Executive Officer. "We are very pleased with the growth in commercial job site products, supported by new customers and channels. Placement of our Vanguard commercial engines powering more applications remains solidly on track. Shipments of Ferris commercial mowers finished the quarter on an upward trend, as weather conditions improved. This growth offset weakness in residential sales, which resulted from a severely delayed mowing season from a prolonged wet and cold spring across much of North America, compounded by inventory reductions among mass retailers in Europe and the U.S. being taken in anticipation of brand transitions. While these issues presented a challenge to achieving our planned sales this season, we are confident in our ability to maintain our market-leading placement in residential engines next season, based on discussions with channel partners. There has been good progress to date with line reviews as consumers continue to recognize the Briggs & Stratton brand for its innovation and reliability. We are well positioned to benefit from recovery to a more normalized environment."

Teske added, "I am pleased with the progress made in fiscal 2018 to position the company for improving performance. In addition to the contributions from the acquisition of assets of Ground Logic and recently Hurricane Power, we are on track with our business optimization initiatives to deliver $30-$35 million in annual profit improvement by 2021. We enter fiscal 2019 ramping up production in our new Ferris mower facility, which provides needed capacity and greater manufacturing efficiency. In addition, we will be increasing domestic production of Vanguard commercial engines, with the on-shoring of engines from overseas and strong customer demand for our expanded line of horizontal-shaft engines. Our upgraded ERP system successfully went live at the beginning of July, and we expect to begin accruing the benefits from a more streamlined platform. Taken together, we continue to expect to drive growth, efficiency and innovation as more people depend on Briggs & Stratton for power to get the job done."

GUIDANCE:

Briggs & Stratton sees FY2019 EPS of $1.35-$1.55, versus the consensus of $1.25. Briggs & Stratton sees FY2019 revenue of $1.93-1.99 billion, versus the consensus of $1.88 billion.

For earnings history and earnings-related data on Briggs & Stratton (BGG) click here.

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