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BGG Unveils New Snow Blower Engines

Zacks Equity Research

In order to counter the winter woes, Briggs & Stratton Corporation (BGG) has announced two snow blower engines that can work at temperatures as low as -20 degree Fahrenheit. The new powerful 750 Series and 950 Series engines will enable the homeowners to clear off snow more effectively from their driveways or walkways.

The new engines have inbuilt freeze-resistant recoil starter and a Magnetron electronic ignition. The engines deliver quick and reliable performance every time and are powerful enough to cut through snow.

These new engines further augments Briggs & Stratton’s engine portfolio and are expected to be widely accepted by the customers. The new products will help in driving revenues even amid a difficult macroeconomic scenario.

Briggs & Stratton is facing severe challenges in its lawn and garden products business as certain regions in the U.S. have been hit hard by the drought conditions. The company is experiencing a dearth in demand for lawn and garden equipment as the lawn and garden market in the U.S. has declined more than 33% since 2004.  

Accordingly, Briggs & Stratton decided to shut down production temporarily at its McDonough, Georgia plant to cut down its inventory level. The company, in April, implemented several strategic plans to reduce cost and over capacity to combat challenges of soft demand.  

The prevailing softness in the U.S. as well as the European markets remains a headwind for the company. Moreover, the drought condition in the U.S. is also expected to impact its business, thus reducing its sales. In addition, the company faces tough competition from Honda Motor Co., Ltd (HMC) and other small Japanese and Chinese engine manufacturers.   

Wisconsin-based Briggs & Stratton is a leading producer of gasoline engines for outdoor power equipment. The company’s wholly owned subsidiary Briggs & Stratton Power Products Group LLC produces portable generators and pressure washers, and designs, manufactures and markets home standby generators, along with lawn and garden and turf care.

Briggs & Stratton retains a short-term Zacks #5 Rank (Strong Sell). We have a long-term Underperform recommendation on the stock.


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